The Hidden Cost of Donor Acquisition

Every nonprofit wants new donors.

Every nonprofit wants new donors.

New donors bring fresh energy, expand your network, and often introduce others to your mission. Acquiring new supporters is an important part of every fundraising strategy.

The problem begins when acquisition becomes the priority and stewardship becomes an afterthought.

The Association of Fundraising Professionals’ Fundraising Effectiveness Project (FEP) continues to show a troubling trend. In 2025, charitable giving increased by 5%, yet the number of donors declined by 3.6%. Overall donor retention remained only 43.3%, meaning most organizations lose more than half of their donors each year. Perhaps most concerning, first-time donor retention remains below 20%. In other words, roughly four out of five first-time donors never make a second gift.

Think about the investment required to acquire a new donor. Marketing campaigns, events, grant-funded outreach, social media advertising, direct mail, and staff time all come with a cost. When a first-time donor never gives again, much of that investment is lost.

Retention is far less expensive than acquisition.

Existing donors already know your organization. They have demonstrated they believe in your mission. They simply need to feel valued and understand the difference their gift makes.

• Strong stewardship is not complicated, but it does require consistency.

• Did the donor receive a prompt thank-you?

• Have they seen the impact of their gift?

• Do they hear from your organization when you are not asking for money?

• Do they feel like a partner in your mission rather than another name in your database?

These simple actions build trust, and trust builds loyalty.

This doesn’t mean nonprofits should stop seeking new donors. Healthy organizations do both. They welcome new supporters while investing in the relationships they have already earned. The most successful fundraising programs understand that acquisition fills the pipeline, but stewardship creates sustainability.

Before increasing next year’s marketing budget, take a close look at your retention numbers.

• How many first-time donors gave a second gift?

• How many donors have lapsed in the past two years?

• How often are you communicating impact instead of asking for another donation?

The answers to those questions often reveal the greatest opportunity for fundraising growth.

A larger donor file does not always mean a stronger fundraising program. Organizations that consistently thank donors, report impact, and build authentic relationships create something far more valuable than a growing mailing list.

They create loyal supporters who stay with the mission for years.

Cheers,  

Michelle Crim, CFRE 

Dynamic Development Strategies can help. We offer coaching, program design, grant writing, and fundraising services for our nonprofit clients. We specialize in small to mid-size organizations because we understand your challenges. Please contact us for more information.