Donor Retention vs. Acquisition: Why Retention is More Cost-Effective

February 2025 / Amanda Stonerock

For many nonprofits, donor acquisition often feels like the primary goal. More donors mean more funding, right? While growing your donor base is important, what many organizations overlook is that retaining donors is far more cost-effective than constantly searching for new ones. Let’s explore why donor retention should be a top priority and how it can save your nonprofit time, effort, and money.


The Cost of Acquiring vs. Retaining Donors

Studies show that acquiring a new donor costs anywhere from 5 to 10 times more than retaining an existing one. Why? Because donor acquisition requires heavy investment in marketing, outreach, and relationship-building from scratch. On the other hand, keeping a donor engaged requires consistent communication, appreciation, and meaningful impact updates—efforts that cost significantly less than acquiring someone brand new.

Additionally, first-time donor retention rates are alarmingly low. According to the Fundraising Effectiveness Project, only about 23% of first-time donors give again. Compare this to the 60-70% retention rate for repeat donors, and it’s clear that focusing on keeping donors engaged yields a higher return on investment.


Why Retention Matters More Than Acquisition

  1. Higher Lifetime Value - A retained donor contributes more over time than a one-time donor. When donors feel connected to your mission, they are more likely to give regularly, increasing their lifetime value to your organization.
  2. Stronger Community and Advocacy - Long-term donors aren’t just financial supporters; they become advocates for your mission. They share your cause with their networks, encourage others to donate, and can even transition into major donors or legacy givers.
  3. More Predictable Revenue - Having a reliable donor base allows for better financial planning and sustainability. Unlike one-time donations, recurring giving programs provide nonprofits with a stable source of funding, reducing financial uncertainty.
  4. Lower Marketing and Outreach Costs - Since existing donors are already familiar with your organization, you don’t need to invest as much in costly advertising or outreach campaigns to get their attention. Instead, nurturing relationships through email updates, personalized messages, and impact stories helps maintain their commitment.


How to Improve Donor Retention

  • Show Impact: Regularly update donors on how their contributions make a difference. Use storytelling, testimonials, and visuals to make it personal.
  • Express Gratitude: A simple thank-you email, a handwritten note, or a personalized video can go a long way in making donors feel appreciated.
  • Engage Beyond Donations: Invite donors to events, volunteer opportunities, or exclusive behind-the-scenes updates to keep them connected.
  • Make Giving Easy: Set up recurring donation options and ensure that the giving process is seamless and user-friendly.
  • Communicate Consistently: Keep in touch with your donors, but not just when you need something. Share success stories, upcoming initiatives, and ways they can get involved beyond just financial support.

While acquiring new donors will always be necessary, nonprofits should prioritize retention strategies to build a more sustainable, engaged, and cost-effective donor base. A well-nurtured donor is more likely to stay, give more over time, and champion your mission to others. By focusing on retention, your nonprofit can achieve long-term success without the constant uphill battle of acquisition.