Like you, I do my best to stay on top of the latest sector data. One of the organizations I follow- Center for Effective Philanthropy- published their annual State of Nonprofits 2026 study and analysis. They survey nonprofit leaders to get a feeling for what’s going on out there.
Lots of great data and info in their study. One chart specifically caught my eye. Here’s the chart from page 23:
The first thought I had? FFS!
Engaging existing funders/donors SHOULD BE 100%, not 77%! And that should be the case whether you’re dealing with a financially challenging climate or not!
Sorry but needed to get that off my chest.
I’ve said it many times before: Acquisition costs 5-10 times MORE than retention. So if you’re having money flow problems, it makes sense to steward and engage existing donors rather than spend all that money, time and effort on finding new donors (first time donor retention is only 18%- you’re wasting tons of money prioritizing acquisition over retention!!!).
Look: The sector’s average retention rate is only 40%. So if you’re always losing 6 out of 10 donors year over year, I understand why you have to prioritize acquisition (look at the above chart: More leaders chose acquisition over retention!)
Heck, there’s a part of me that gets it: You’re hoping to find MacKenzie Scott and she’ll drop $50,000,000 in your bank account. So of course it “makes sense” to prioritize acquisition.
Benefit of the doubt: Maybe the leaders in this survey have high retention rates and they need to open new avenues to bring in supporters. If that’s the case, fine.
But let’s not kid ourselves. Right now it’s VERY tough out there. Federal funding is down. Fewer people are donating. Foundations are inundated with applications.
Which is why for the next 161 days (and beyond that obvs), you and your team should put an emphasis on engaging, stewarding and relationship building with existing donors.
But hey, don’t take it from me. Time for a quick math exercise.
Do the math!
I’d like you to take ten minutes TODAY and do the below math.
- What is your current donor retention rate? To calculate: Number of returning donors in 2025 / total number of donors in previous year (2024) x 100 =
- What is your average donation amount?
- How much more would you have brought in if you had raised your retention rate in 2025 by 5%? 10%? (Both of which are VERY attainable with a good fundraising strategy that plans out stewardship and engagement)
Now please do the following calculations with your first time donors from 2024.
- What was your first-time donor retention rate in 2025? (What percent of first timers in 2024 gave again in 2025)
- Wat was their average donation?
- How much more would you have raised in 2025 if you had raised the first-time donor retention rate by 5%? 10% (Again, VERY attainable!)
Look at your answer to both number three’s. It’s not $100. My guess is it’s way more. And it would be even higher for each donor you retain.
See my point?
From the CEP chart, I’m ok with reducing programs/services. Yes it’s painful but sometimes you have to go “back to the basics” before expanding.
I’m not a fan of reducing salaries or reducing staff. That’s a knee jerk reaction which simply puts a much larger burden on the staff left behind and it means they’re gonna start looking for other work which may compensate better.
I’m a former CEO who was a leader during the global financial crisis of 2007-2009. I get the pain points all of you are facing.
It’s not magic. When you properly thank, engage, steward and communicate with supporters, they will stick around longer. That means you spend less and raise more. Win win.
Only 161 days left till year’s end. It’s coming. Put an emphasis on retention this year and you won’t just hit but you’ll surpass your fundraising goals.
