How do you know if you need new donors?

The number one question I get asked is: “Jess, how do I find new donors?” 


…and I GET IT. You are right to be thinking about donor acquisition - it’s an important part of the pie, but it’s not the only part. 


The problem I see with 99% of nonprofits who come to me for help is that they are 99% more concerned with finding new donors than keeping the ones they already had. So, I thought - let’s answer the question: how do you know if you need new donors? Here are four things to consider: 


Are you having meetings with donors?


Pulse check. Are you meeting with donors? Coffee meetings, lunch meetings, phone calls, or even over Zoom? If the answer is “yes” - keep going. If the answer is “no” - this is your reminder that to-date, I’ve never met a thriving nonprofit or nonprofit leader who raises money behind a computer screen. 


Fundraising is relational meaning it’s built off relationships and if you aren’t building meaningful relationships with your donors - you will always be swimming upstream. 


How do you know if you are having enough donor meetings?


Great question! This is different for everyone, but you can set your own goal and work your way up or down depending on what works for you. For example, when I was an in-house fundraiser, I would challenge myself to have five to ten 1:1 donor meetings per week. I know other leaders that have the motto, “never eat alone” and strive to have a meeting with a donor every breakfast, lunch, coffee break and dinner that they can. 


You make your own rules, but if you are reading this thinking, “I can’t remember the last time I had a 1:1 meeting with a donor,” you know where you need to begin.

Are you getting regular introductions?

If your answer to the above question is “yes”, then just like before - keep it up. If the answer is “no” - this might be a good place to start. 


I’ve written about this before, but what I call the “Inside Out” Method is the easiest place to start. The concept is that you start with your donors closest to the mission and work your way. Traditionally, this looks like:


  1. Your board of directors

  2. Your volunteers and advisors

  3. Your major gift donors

  4. Your staff


If you are looking for introductions, ask the people closest to you first to introduce you to someone they know who has similar interests, passions or lived experiences and who could want to become involved with your organization. 


What is your retention rate?

Have you analyzed your 2021 revenue numbers yet? If you need help getting started - you should check out my Quickstart Guide


One of the most important numbers to track is your year-over-year retention number - the rate at which you are retaining (and losing) donors. Unfortunately, the nonprofit sector as a whole is notoriously bad at retaining donors with on average only 51% of donors making more than a one-time gift. 


Do you know your retention rate? To calculate, you’ll need to pull a list of all of your last two years of donors and calculate how many of donors in Year 1 also made a gift in Year 2. 


For example:


Year 1: 458 donors

Year 2: 361 donors (note - it’s important to calculate year-over-year donors vs just the total number of donors)


Year 2 Donors/Year 1 Donors = 361/458 = 78%


Again, you’ll need to know your retention rate to know if you actually need new donors in the next step. 


What is your average donation amount?

To calculate your average donation rate, you’ll need to take the total sum of all of your previous year donations and then divide it by the number of gifts made (note: this is a different number than the number of donors in a year because some donors can make multiple gifts in a year). 



For example:



Total revenue/total gifts = average donation amount.



$758,471/444 = $1,708.29



It should be noted that if you had a gift that skews your average donation amount (for example, if you had an extra large, one-time gift from a major gift or foundation - you might want to exclude that data from your calculations. For an even more specific example, let’s say that a majority of your donations fall under $5,000, but you received a $75,000 grant - you might want to exclude that data from your calculations). 



Now - using the information above, you can now make a data informed decision about needing new donors. 



In the example above - we know that this organization has a really good retention rate at 78%. 



That means that they should expect 78% of their previous year revenue ($758,471) to come back: $591,607.38.



Although I’ve never worked at a nonprofit that isn’t trying to grow their budget annually, this is a good starting place. 



In my next post - I’ll share how you can mathematically calculate how many new donors you need to gain to meet or exceed your previous year’s budget, but in the meantime, I want you to go back to the four points above: 



  1. Are you having meetings with donors?

    1. If the answer is no - you need new donors

  2. Are you getting regular introductions to new people?

    1. If the answer is no - you probably need new/more donors

  3. What is your retention rate?

    1. This is a super important calculations for many strategic decisions in your nonprofit

  4. What is your average donation amount for the previous year?

    1. Another important calculation for you to know