[ASK AN EXPERT] Calculating Donor and Donation Retention

Calculating donor retention is different than calculating gift retention.

Also, calculating gift retention is different from determining whether the retained gift is greater than, less than, or equal to the previous gift.

You can calculate all these things, but they are separate math problems. Or, if you have a donor database, they are separate queries you need to run in order to generate a report.

How to calculate donor retention rate

Donor retention rate refers to the number (or percentage) of donors that return to give another gift in a specific time period (usually a year).

To calculate your donor retention rate, divide the number of donors who gave in both periods by the total number of donors from the previous period, then multiply by 100.

As a formula, it looks like this:

Donor retention rate = (Donors who gave in both periods ÷ Total donors in the previous period) × 100

Example:

• Previous year (Year 1): 250 total donors
• Current year (Year 2): 100 of those exact 250 donors gave again

Donor retention rate = (100/250) x 100 = 40%

How to calculate gift retention rate

While donor retention tracks the number of people who return to give, gift retention measures how well your organization retains the actual dollars raised from those repeat supporters. Monitoring this metric helps you spot trends in donor upgrades or downgrades across giving periods.

The formula for gift retention rate is as follows:

Gift retention rate = (Total dollars raised from retained donors in the current period ÷ Total dollars raised from all donors in the previous period) × 100

To calculate your gift retention rate, divide the current-period revenue generated by retained donors by the total revenue those donors contributed in the previous period, then multiply by 100.

Example:

• Previous year (Year 1): 100 donors gave $100 each = $10,000 total revenue
• Current year (Year 2): All 100 donors gave again, but decreased their gift to $50 each = $5,000 total revenue

Gift retention rate = ($5,000/$10,000) x 100 = 50%

And, yes, a 50% gift retention rate is not ideal. However, benchmark data from the Fundraising Effectiveness Project shows that average gift retention has remained below 50% for the past decade. In the most recent full annual report, average gift retention stood at just 48%, while overall donor retention hovered at 45.5%.

Gift downgrade, upgrade, and flat calculation

The reason I like to calculate these numbers is because it gives me a good idea who I need to pay attention to.

1.  First, I’ll look at upgrades and consider who is likely to upgrade again (maybe I’ll put them on a major donor track).

2.  Next, I’ll look at those whose giving has remained at the same level for a number of years, and who may benefit from some special attention this year (maybe they’ll get a donor survey so I can learn what most interests them, how they prefer to be communicated with, and other preferences).

3.  Finally, I’ll look at those who gave less than in previous years, and consider what I might do if I want to keep them (maybe I’ll make a phone call or send a survey to ascertain the reasons for their waning interest).

Again, you’ll need to run separate database queries and reports to arrive at your numbers. You’ll begin with the subset of everyone who gave to you this year who also gave last year. Essentially, you specify a date range to restrict the report to gift transactions within that range. You can also restrict the report based on transaction type (e.g., a specific campaign) or a minimum and maximum gift amount (i.e., you may want to calculate upgrade/downgrade rates for different levels of givers – e.g., small, mid-level, and major). Some databases have canned reports to calculate upgrades and downgrades.

The benefit of digging into your database in this way—up, down, or flat —is you can unearth strengths and weaknesses in your donor stewardship program. Perhaps you’re seeing downgrades in your mid-level donors because you’re not paying them sufficient attention. At the same time, your major donors may be increasing their gift size because you’ve got a strong plan in place to cultivate them. Keep up the good work in the latter case; add a little donor love in the former. Here are 10 ways to upgrade donor gifts.

Other things worth calculating to track your progress year-over-year include:

• First-time donor retention – note that new donors who renew within the first three months have lifetime values nearly twice as high as those who give a year later, so this is a strategy definitely worth focusing on.
• Ongoing donor retention – once a donor gives to you more than once, you know they really dig you and your cause. These folks have potential for high lifetime value, so it’s worth strategizing to boost this number.
• Annual average gift – generally, if this number goes up, it’s a good thing. If it goes up while the total numbers of donors go down, it may mean you’re attracting more major donors. In fact, it’s a trend across all nonprofits to see fewer donors making larger gifts. Of course, you don’t want to lose too many donors. Keep an eye on total contributed revenues to know whether you’ve got a red hot issue or are simply in line with trends.

— Charity Clairity

How to track donor retention in your donor database

Most modern donor management systems and CRMs (like Bloomerang) include built-in reporting tools to automate retention metrics. However, if you need to run custom database queries or generate tailored reports, following a standardized filtering process ensures your data remains accurate and consistent year over year.

1. Select your standard reporting period.

Choose a consistent timeframe for both baseline and comparison periods. Most organizations evaluate retention across full calendar years, fiscal years, or specific repeating campaign dates.

2. Filter by unique primary donor IDs.

Query records using unique donor identification numbers rather than names to ensure accurate matching, preventing duplicates or errors caused by alternate spellings and household accounts.

3. Filter revenue types to exclude non-donor transactions.

Exclude transactions that distort donor engagement metrics, such as soft credits, unfulfilled pledges, in-kind contributions, and event ticket purchases, focusing strictly on direct charitable gifts.

4. Segment by donor lifecycle stage.

Break down your query results by lifecycle stages—such as first-time donors, multi-year repeat donors, and major gift donors—to identify specific areas of retention strength or churn.

How to improve your donor retention rate

Improving donor retention requires a shift from transactional outreach to intentional, multi-touch stewardship. Implementing these tactical steps helps protect your donor base, lower acquisition costs, and build long-term support.

1. Thank donors quickly and personally.

Acknowledge gifts within 48 hours. Personalize prompt thank-you notes, phone calls, or video messages based on the donor's giving history to show immediate appreciation.

2. Segment first-time donors.

Separate first-time givers from repeat supporters. Design a tailored welcome email series that introduces your mission without immediately asking for another gift.

3. Build a second-gift strategy.

Focus on converting first-time givers into repeat supporters within their first 90 days. Present a specific, lower-friction opportunity to give again while their engagement remains high.

4. Show impact before making the next ask.

Share real-world stories, progress updates, and outcome reports explaining exactly how their contribution made a difference before launching your next fundraising appeal.

5. Use donor surveys to gather insights.

Send short post-donation or annual surveys to ask supporters why they give, what programs interest them most, and how they prefer to receive communication.

6. Promote recurring giving options.

Encourage supporters to join your monthly giving program. Recurring options create consistent income and keep retention rates significantly higher than one-time gifts.

7. Flag downgraded donors for proactive outreach.

Identify supporters who reduced their giving amount year over year. Reach out directly to reconnect, gather feedback, and understand their changing capacity or interests.

8. Track retention across key segments.

Analyze retention metrics by campaign, acquisition channel, gift size, and donor type to pinpoint high-performing strategies and address areas of donor drop-off.

Donor and donation retention FAQs

What is a good donor retention rate?

Across the nonprofit sector, a "good" donor retention rate generally falls between 45% and 55%, but targets vary significantly by donor type and data source. Retaining more than half of your donor base puts your organization in the top tier of fundraising performance.

How does donor retention impact long-term fundraising costs?

Acquiring a new donor typically costs 50% to 100% more than retaining an existing one. Higher retention rates lower overall donor acquisition costs, increase donor lifetime value, and stabilize cash flow, allowing your fundraising team to focus resources on stewardship rather than constantly replacing lapsed supporters.

What is the difference between a lapsed donor and a churned donor?

A lapsed donor has missed their expected giving cycle (typically 12 to 24 months without a gift) but remains in your database for re-engagement appeals. A churned donor has explicitly canceled a recurring gift, unsubscribed from communications, or remained inactive long enough to be deemed unrecoverable.

How should nonprofit organizations account for donor deaths or relocations in retention metrics?

Natural attrition, like donor death or relocation, is usually included in standard macro retention calculations for consistency. However, for internal stewardship reporting, organizations often filter out deceased or invalid contact records into a separate "unreachable" category to measure actionable retention performance more accurately.

Wrapping up

Understanding both donor and gift retention metrics gives your nonprofit a complete picture of supporter engagement and financial stability. By pairing clear tracking methods with tailored stewardship, you can protect donor loyalty, prevent unnecessary attrition, and maximize lifetime giving value. Investing time in these retention strategies ultimately ensures steady revenue to fuel your organization's mission for years to come.

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