Online donations: how to keep more donors for longer

Charities, NGOs, political parties and membership organisations put a lot of effort into growth: signing up new regular donors and members. But churn chips away at that income the whole time. Keeping the donors you have is critical to growing a sustainable organisation, because finding new ones costs far more. On average it takes 18–24 months to earn back what you spent acquiring a first-time donor, once you count staff time, conversations, media, campaigns and events.

What is donor churn, and why care?

Churn is slow. Think of a bike tyre with a slow puncture: at first you barely notice, after a couple of months riding gets harder, and eventually you're not going anywhere. Churn is one part of overall donor retention, and the difference between income that peaks and crashes and income that grows steadily.

What is a churn rate?

Your churn rate, sometimes called attrition rate, is the rate at which regular donors stop giving or members leave. It's usually expressed as the percentage of subscribers who cancel in a given period.

How to calculate your monthly churn rate

(Donors at the start of the month − donors at the end of the month)
÷ donors at the start of the month
= monthly churn rate

For example, if you start the month with 500 donors and end it with 435: (500 − 435) ÷ 500 = 13%. You're losing 13% of your donors every month.

Churn silently kills your income

Churn is a leaking bucket. Unless you add enough new donors to replace the ones you lose, your monthly income heads towards zero, and because churn compounds, it hits future income much harder than it first appears.

Take 1,000 donors giving $12 a month at 13% monthly churn, roughly the average for card payments. After 12 months, 216 are left, and monthly income has fallen from $12,000 to $2,592.

Small improvements, big impact

Now run the same numbers at 2.9% monthly churn, about the average for Direct Debit or ACH. After 12 months, 722 donors are still giving, worth $8,664 a month. That's a 234% increase in monthly income from the same starting point, and over five years or more the gap gets much wider.

Types of churn, and what works

There's no single fix, but there are proven approaches for each of the two kinds of churn.

Voluntary churn

Voluntary churn is when a donor actively cancels, perhaps because they don't see the impact of their gift or would rather support another cause. Many of the fixes are basics, but over time they make a real difference to retention:

• Storytelling and communicationShow donors the concrete results of their giving, so they understand what a regular gift achieves.
• Thank donorsPromptly and often, and get in touch at other moments too: holidays, birthdays and key dates for your cause.
• Community and activitiesGive donors ways to get involved and meet your community, in person and online.
• PersonalisationSegment your audience and send each group the impact stories it cares about most.

Involuntary churn

Involuntary churn is when donors stop giving without meaning to: an expired card that never got updated, a soft decline because a card hit its limit, or a hard decline because a card was lost or stolen or the donor changed bank. Losing good donors this way is especially frustrating, and it can account for up to 40% of all churn. The good news is that it's easier to fix and measure than voluntary churn. The answer lies in dunning, the process that follows a failed payment, where both timing and method matter.

1. Offer Direct Debit or bank debit firstThe easiest and fastest win, and usually cheaper per transaction than cards. 97.5% of bank debit payments succeed on the first attempt. Keep card and mobile wallets as options too, since not everyone can or will pay by bank. SmartRaise offers local bank debit in more than 30 countries, including the UK, the Eurozone, Canada, Australia and New Zealand.
2. Send fewer, better automated emailsDon't ignore failed payments, but time your interventions. Let smart retry schedules, which use machine learning to retry at the best moment without alerting the donor, run first. Decouple your emails from payment attempts so donors aren't emailed after every failure.
3. Skip pre-dunningThe old practice of warning donors 30, 10 and 3 days before a card expires is no longer needed. Modern payment platforms such as Stripe update more than 70% of expiring cards automatically with the issuing bank, so avoid “urgent: update your card” emails.
4. Make updating effortlessUse dedicated, branded card and bank update pages that do just that one job. Pre-fill everything you can and ask only for the card or account details you need. Make the page mobile-friendly with Apple Pay and Google Pay, never require a login, and use SSL.
5. Personalise your messagesPhishing makes donors wary of update links, so brand your receipts and follow-ups so they look trustworthy. Keep images and links to a minimum with one clear call to action, keep messages short and personal from a recognisable human sender, raise the urgency gently with each follow-up, and make it easy for donors to reply.
6. Make sure your emails arriveDeliverability matters even more for failed-payment emails. Use an email service that only sends transactional email, set up your own SPF and DKIM records, monitor deliverability continuously (SmartRaise does this for every client), and check your content for spam triggers with a tool like Litmus.
7. Add a human touchAutomation has limits. If a high-value donor hasn't responded to requests to update their Direct Debit, call them and send a personal email. Set alerts for high-value opportunities, and make sure your team can answer both technical and cause-related questions.
8. Keep following upPeople are busy and often just need a nudge. Don't give up too early: donors tolerate a fair number of follow-ups, especially for a cause they care about. Automate respectfully and send only as many messages as you need.

Summary

Churn may not feel urgent at first, but it steadily erodes your income. Find the solutions that fit your organisation's own workflows.

To find out more, book a demo and see how SmartRaise can help you grow sustainable donation income.