Key Metrics for Measuring and Improving Retention in Charitable Organisations

For charitable organisations, donor retention is critical to sustaining long-term success. While many charities focus on acquiring new donors, it's often more effective (and cost-efficient) to keep existing supporters engaged and coming back year after year. Understanding and improving retention requires tracking the right metrics – data points that provide insights into how well your organisation is maintaining its donor base.

In this blog, we’ll break down the key metrics charitable organisations should focus on to measure and improve donor retention. These metrics can help you identify trends, refine your strategies, and ultimately foster stronger relationships with your supporters.

1. Repeat Donation Rate

What it is: The percentage of donors who give more than once to your organisation within a specified time period.

Why it matters: This is one of the most direct indicators of donor retention. A high repeat donation rate shows that your donors are committed to your cause and are willing to continue supporting your work over time. A low rate may indicate that you’re losing donors after their initial contribution, signalling a need to improve engagement or communication efforts.

How to calculate it:  

*Repeat Donors ÷ Total Donors × 100*

For example, if you have 500 total donors and 200 of them have donated more than once, your repeat donation rate is 40%.

How to improve it:  

- Strengthen follow-up communication after the first donation, such as sending personalised thank-you notes or impact updates.

- Implement recurring donation programs to encourage regular giving.

- Use targeted campaigns to reach first-time donors and invite them to contribute again, showing the value of their continued support.

2. Donor Lifetime Value (LTV)

What it is: The total amount of money a donor is expected to give over the entire duration of their relationship with your organisation.

Why it matters: LTV helps you understand the long-term financial impact of each donor. By focusing on increasing donor lifetime value, your organisation can better plan for the future and allocate resources to retention strategies that have the highest potential for return.

How to calculate it:  

*Average Donation Amount × Average Number of Donations Over Time*

For example, if the average donor gives $100 per donation and makes 5 donations over their lifetime, the LTV is $500.

How to improve it:  

- Focus on building deeper relationships with donors through personalised communication, regular updates, and exclusive events.

- Encourage higher-value donations by offering matching gift opportunities or explaining the specific impact of larger contributions.

- Promote recurring donation programs to increase the number of donations over time.

3. Donor Churn Rate

What it is: The percentage of donors who stop giving to your organisation over a certain period of time.

Why it matters: A high churn rate indicates that many donors are leaving after a single gift, or after a short-term commitment. Reducing churn is essential to improving overall retention and ensuring your donor base stays strong and engaged.

How to calculate it:  

*Donors Lost ÷ Total Donors at Start of Period × 100*

For example, if you start the year with 1,000 donors and lose 250 of them, your churn rate is 25%.

How to improve it:  

- Develop a donor stewardship program that includes regular communication, appreciation, and engagement efforts.

- Use data to identify donors at risk of churning (e.g., those who haven’t engaged in a while) and implement re-engagement campaigns.

- Focus on creating meaningful donor experiences, such as connecting their contributions to specific projects or sharing success stories.

4. Engagement Frequency

What it is: The number of times a donor interacts with your organisation over a specific period. This could include donations, attending events, opening emails, or volunteering.

Why it matters: Frequent engagement is a strong indicator of donor interest and commitment. Donors who engage with your charity regularly are more likely to continue supporting you. Measuring engagement frequency helps you understand which activities or communications resonate most with your donors.

How to calculate it:  

Track all forms of donor interaction (e.g., donations, event attendance, email opens, volunteer work) and calculate the average number of engagements per donor.

How to improve it:  

- Diversify your communication channels to include emails, social media, direct mail, and events to engage donors in various ways.

- Create opportunities for non-financial engagement, such as volunteer work, surveys, or advocacy efforts, to keep donors involved in your mission.

- Offer regular updates on your projects and invite donors to participate in or attend events related to their interests.

5. Retention Rate

What it is: The percentage of donors who continue to give to your organisation year after year.

Why it matters: Your retention rate is a clear indicator of how successful your charity is at maintaining long-term relationships with donors. Improving retention rates means more sustainable income for your organisation and less reliance on acquiring new donors.

How to calculate it:  

Donors Retained ÷ Donors at Start of Period × 100

For example, if you had 1,000 donors last year and 750 of them donated again this year, your retention rate is 75%.

How to improve it:  

- Acknowledge and thank donors promptly after every contribution.

- Keep donors informed about how their donations are making an impact through regular updates.

- Personalise communication to reflect each donor’s history and preferences, making them feel valued and appreciated.

6. Average Gift Size

What it is: The average dollar amount given per donation.

Why it matters: This metric helps you track changes in donor giving behaviour over time. An increase in average gift size suggests that your donors are becoming more invested in your organisation, while a decrease may signal a need to adjust your messaging or engagement efforts.

How to calculate it:  

*Total Donation Amount ÷ Number of Donations*

For example, if you raised $50,000 from 200 donations, the average gift size is $250.

How to improve it:  

- Highlight the specific impact of larger donations, showing how an increased contribution can make a bigger difference.

- Offer suggested donation amounts in your appeals, with descriptions of what each level will help achieve.

- Use targeted campaigns to encourage higher-value donations, such as matching gift opportunities or special appeals for major projects.

Conclusion: Measuring and Improving Donor Retention

Focusing on the right metrics is key to understanding how well your charity is retaining its donors and where improvements can be made. By tracking metrics such as repeat donation rate, lifetime value, churn rate, engagement frequency, retention rate, and average gift size, your organisation can gain valuable insights into donor behaviour and develop strategies to enhance retention.

Ultimately, improving donor retention is about building stronger, more personal connections with your supporters. By keeping your donors engaged, appreciated, and informed, you can cultivate long-lasting relationships that benefit both your charity and the communities you serve.

‍