Itโs easy to think that more donors equals more donations when youโre in the throws of fundraising. While acquiring new supporters is always a win, one of the best ways to grow your fundraising efforts might actually be with the donors you already have. Thatโs where donor expansion, sometimes called net donation retention, comes in.
What Is Donor Expansion?
In simple terms, donor expansion is all about getting your current donors to give a bit more than they did before. Instead of focusing solely on bringing in new donors, donor expansion looks at how to increase the contributions of the people already supporting you.
If donors havenโt increased their donations over the years, are there ways to encourage larger or more frequent donations or recurring gifts?
Some strategies for encouraging this kind of growth include:
- Look for potential among current donors: If you have a small donor with the financial capacity to give more, they could become a mid- or even a major-level donor with the right kind of engagement.
- Offer varied donation options: You can set up donation options with specific impact targets, inspiring people to give a little more to reach a visible goal.
- Add special giving opportunities: Going beyond the regular calendar of appeals, special asks at unique moments in the year can create new chances for donors to contribute. For example, a nonprofit might launch a fundraising campaign tied to the anniversary of its founding, while an education-focused nonprofit could leverage the back-to-school season to boost donations.
- Recurring giving: Encouraging existing donors to change to a recurring giving model can increase both their donation amount and giving frequency. Someone might give a one-time $50 gift, but a $10 monthly donation more than doubles the one-time gift.
How Is Donor Expansion Calculated?
Calculating donor expansion is fairly straightforward and gives you a helpful snapshot of how much your existing supporters are increasing their contributions.
Some key metrics to understand when calculating donor expansion include:
- Active two-year donors: Donors who gave between 25 and 12 months ago and also gave between 12 months and the present.
- Last yearโs average giving: Average gift of active two-year donors between 25 and 12 months ago
- This yearโs average giving: Average gift of active two-year donors between 12 months and the present.
Donor Expansion = Percentage difference between this yearโs average giving and last yearโs average giving
This metric tells you if your existing donors are stepping up to contribute more over time, whether thatโs through larger or more frequent donations.
Why is It Important?
Getting existing donors to give more is often easierโand less expensiveโthan bringing in new ones. These donors are already invested in your missionโthey know your organization and feel connected to your work.
With the right inspiration, many will be open to increasing their support. Even a modest boost in the average gift size can make a big difference. Itโs all about making a more significant impact without the heavy lifting of constantly searching for new donors.
To give you an idea of whatโs possible, the top-performing nonprofits reach a donor expansion rate of around 18.34%, according to the 2024 Virtuous Nonprofit Benchmark Report. Thereโs real potential to make a big difference by focusing on donor growth.
Tactics to Increase Donor Expansion
An effective donor expansion strategy begins with a strong focus on donor retentionโboth keeping current donors engaged and maintaining their existing giving levels. A key component of this approach involves cultivating and stewarding relationships with LYBUNT donors.
Organizations can use tools like Virtuous to streamline this process and immediately identify donors who gave last year but have yet to give this year.
Two simple ways to increase donor expansion include:
- Dynamic Gift Arrays: Offer varied donation amounts with specific impact goals for each level. Showing donors how their donation will make a difference can encourage them to stretch their gifts.
- โSpecialโ Gift Asks: Consider reaching out during unique times outside your regular giving cycle. Special events or campaigns can motivate donors to give more without interfering with your standard appeals.
With donor expansion, you grow without adding more people to your listโand without the cost of attracting new donors. By focusing on your existing supporters and helping them increase their impact, youโll build stronger relationships, increase revenue, and amplify the difference you can make.
Read more: 5 Takeaways from the 2024 Virtuous Nonprofit Benchmark Report
