GUEST POST // What to Do About Lapsed Donors: What Nonprofits Should Know
By Jay Love of Bloomerang
Donor lapse (also known as donor attrition) is a common nonprofit challenge, but not an unsolvable one. A lapsed donor is a donor who gave to your nonprofit in the past but hasn’t donated again within a specific time period (typically 12 months).
According to the Fundraising Effectiveness Project report from AFP, recapture and repeat donor rates are decreasing for nonprofits in the U.S. and Canada. New donor retention was down by 21% from the previous quarter to 6.8% for Q1 (Jan. 1-Mar. 30) of 2022. Given that the typical timeline of a new donor (prospect identification to gift close) spans 6-24 months, having a strong donor retention strategy is crucial for nonprofits.
Donors stop giving for a variety of reasons, whether due to a change in financial situation, shifting philanthropic priorities, or because they feel like their donation isn’t needed. However, your nonprofit can still work to improve its retention rate to reengage as many lapsed donors as possible.
In this post, we’ll highlight a few data-driven strategies that help nonprofits re-engage lapsed donors, including:
Improve your donor stewardship approach.
Don’t overlook your “micro” donors.
Mention the donor’s last gift date.
Ask for less than the donor’s previous gift.
Send out a survey to gather donor feedback.
With these tips, you can tackle the root cause of donor lapse at your organization and improve your retention rate.
1. Improve your donor stewardship approach.
First, it’s helpful to figure out how you can prevent donors from lapsing in the first place. Enhancing your donor stewardship strategy can be an effective way to prevent future donor lapses. Ensure you’re stewarding donors using these strategies:
Acknowledge donor gifts with a thank-you note. According to a Bloomerang study, donors who received two thank-you phone calls within 90 days of their donation were retained about 58% of the time, compared to 33% retention for donors who didn’t receive any phone calls. This shows how important it is to acknowledge and thank your donors for their contributions. Phone calls aren’t the only way to do so— you can also use personalized, handwritten letters and emails to show your appreciation.
Describe the impact of donors’ gifts on your ability to work toward your mission. Data from the Millennial Impact Report shows that Millennial donors are interested in hearing about the people and causes the nonprofit works to help, rather than the nonprofit itself. This means that a large group of your donors give because they are passionate about the cause. Emphasizing how donors’ gifts directly helped people in need can make donors feel more fulfilled and satisfied with their donation.
Building strong relationships with donors after they give can increase the chances that supporters will decide to contribute again in the future. When donors feel like their contributions made a tangible difference, they’ll see the value in continuing to give to your cause.
2. Don’t overlook your “micro” donors.
According to the FEP report, the overall drop in donor retention for Q1 of 2022 was led by “micro” donors who gave less than $100. The retention rate for these donors was down 11.1%.
This trend reveals the importance of engaging with donors at all levels to improve your overall donor retention. Since smaller gifts are the largest category of donors across the board, it’s important to steward these donors alongside your larger mid-tier and major donors.
Use the tips mentioned above to show appreciation for smaller donors, such as sending prompt thank-you messages and describing the impact of donors’ gifts, no matter how small. This shows smaller donors that your organization appreciates their involvement and recognizes that their contributions make a difference.
3. Mention the donor’s last gift date.
Reminding lapsed donors of the last time they gave can encourage them to donate again. To implement this strategy into your nonprofit’s lapsed donor outreach, send past gift reminders in email or written appeals. For example, you might send lapsed donors an email that says something like:
“We are so grateful to have you as a part of our Conservation Warrior community. Since your last gift of $80 on December 12, 2020, we’ve been able to plant thousands of new native trees in local parks. Your continued support helps native species in our community thrive.”
This type of message reminds donors how long it’s been since their previous gifts. However, it’s not intended to make the recipient feel guilty — instead, the tone is positive and encouraging, letting donors know that if they were to give again, their funds would be put to good use.
4. Ask for less than the donor’s previous gift.
A NextAfter study found that asking for less than a donor’s past contribution can lead to a greater overall response rate. The study took place during a campaign for Giving Tuesday. The organization asked donors for a smaller amount than their previous gift and acknowledged that they were asking for less. This “downgrade” treatment included a message that read:
“Are you willing to make a special Giving Tuesday gift of $___ to help us reach our goal?
I know that you have generously given to us in the past. With all of the uncertainty in the world, we’re not asking for that same level of support.”
This type of outreach led to a 34.4% revenue increase. It encourages donors to think about making a repeat donation while acknowledging that they might not be able to provide the same level of support as in the past.
However, this strategy should only be used to re-engage lapsed donors, as it can lead to lower average gift sizes when deployed across your entire donor file.
5. Send out a survey to gather feedback.
Asking lapsed donors directly why they stopped donating can provide valuable insights that help you shape your future fundraising efforts. This strategy can give your nonprofit access to personalized data about your unique supporter base. You can identify trends and patterns to understand what types of outreach will work best for donors going forward.
Create a survey for lapsed donors and send it out using your email marketing platform. Start the message by thanking donors for their previous support and letting them know what their donations helped achieve.
Then, ask specific questions that get to the heart of why they stopped giving to your organization, such as:
Why did you choose to stop donating?
What would lead you to give again?
Would you like to receive any communications from us going forward?
Send these surveys to donors who gave larger amounts in the past, such as monthly, mid-tier, or major donors. Re-engaging even a handful of these lapsed donors will help you see a higher ROI for your future fundraising efforts.
Just because a certain donor has lapsed doesn’t mean your organization will never be able to reengage that individual. With these strategies, you can reconnect with your lapsed donors while addressing the core causes of donor attrition. Over time, this can lead to a higher donor retention rate and more successful fundraising campaigns.
This guest post was written by Jay Love.
Co-Founder and current Chief Relationship Officer at Bloomerang
He has served this sector for 33 years and is considered the most well-known senior statesman whose advice is sought constantly.
Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 11 years, which at the time was the leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth.
He is a graduate of Butler University with a B.S. in Business Administration. Over the years, he has given more than 2,500 speeches around the world for the charity sector and is often the voice of new technology for fundraisers.
