How to Calculate Donor Retention Rate (With Formula and Example)
TLDR
Donor retention rate = (donors who gave this year who also gave last year) / (total donors who gave last year) x 100. The sector average is 43-46%. Best-in-class is 60%+. Under 35% signals a retention problem that acquisition spending cannot fix.
The Donor Retention Rate Formula
The formula for donor retention rate is:
(Donors who gave in the current year who also gave in the prior year) / (Total donors who gave in the prior year) x 100
Written as variables: if you had 150 donors give last year, and 65 of them also gave this year, your retention rate is 65 / 150 x 100 = 43.3%.
The denominator is always the prior year’s total donor count, not the current year. This is the number you are trying to retain.
A Worked Example
Your organization closed 2024 with 150 donors who made at least one gift.
You pull your donor list for 2025 and identify which of those 150 also gave in 2025. The answer is 65.
65 / 150 x 100 = 43.3% retention rate
That means 85 donors from 2024 did not give again in 2025. To maintain your 2024 revenue level without growing it, you needed to acquire at least 85 new donors in 2025 just to replace the ones who lapsed.
New Donor Retention: A Separate Calculation
Overall retention rate masks an important sub-problem. First-year donors retain at much lower rates than multi-year donors.
Calculate new donor retention separately: (first-time donors from last year who also gave this year) / (total first-time donors from last year) x 100.
If 40 of your 150 2024 donors were first-time givers, and only 9 of them gave again in 2025, your new donor retention rate is 9 / 40 x 100 = 22.5%. That is in line with the sector average of 19-26% but well below your overall 43.3%.
Tracking new donor retention separately tells you whether your onboarding and second-gift strategies are working.
Industry Benchmarks
The Fundraising Effectiveness Project publishes annual sector benchmarks based on data from thousands of nonprofits:
- Sector average overall retention: 43-46%
- Best-in-class retention: 60%+
- High-risk threshold: below 35%
- New donor (first-year) retention: 19-26%
- Recurring (monthly) donor retention: 80-90%
Online donors tend to retain at the lower end of or below the sector average. Major donors (typically $1,000+) retain at higher rates when they have an active relationship with development staff.
If your retention rate is below 35%, acquisition spending is unlikely to solve the revenue problem. At that lapse rate, you are replacing more than 65% of your donor base each year.
What to Do With the Number
Once you have your retention rate, three actions follow in order.
Segment by year of first gift. Multi-year donors retain at higher rates than first-year donors. Calculate retention separately for donors in their second, third, and fourth+ years. This shows where donors are falling off, which determines where to focus retention investment.
Identify your LYBUNT list. Pull every donor who gave in the prior fiscal year but has not yet given in the current year. This is your re-engagement priority. Donors within 12 months of their last gift are more reachable than those gone two or more years.
Calculate what a 5-point improvement is worth. If you had 150 prior-year donors with an average gift of $250, moving from 43% to 48% retention means retaining 7.5 more donors annually. At $250 average gift, that is $1,875 per year, compounding over multiple years as those retained donors continue giving. For organizations with hundreds or thousands of donors, this math scales quickly.
How CRM Software Affects This Calculation
Calculating retention rate requires a database that tracks individual donor giving history by year and can query which donors gave in two consecutive periods. In a spreadsheet, this is a manual VLOOKUP across two year-end export files. It works but takes time and is error-prone at scale.
A donor management CRM should generate this query in seconds. If your current system cannot produce a LYBUNT report or calculate retention rate directly, that is a tooling gap worth addressing, because you cannot improve a number you are not regularly measuring.
GrantPipe includes donor management with giving history tracking, LYBUNT segmentation, and retention reporting starting at the Foundation tier ($20/month). The Growth tier ($49/month) adds the grant compliance side, so program impact data from your grants can feed directly into donor impact communications.
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- Donor Retention Rate
- The percentage of donors from a prior period who also gave in the current period. The primary measure of how well an organization keeps its existing donor base active.
DEFINITION
- New Donor Retention Rate
- The percentage of first-time donors from last year who gave again this year. This metric tracks separately because first-year retention is consistently lower than overall retention and requires different strategies.
DEFINITION
- Recurring Donor
- A donor who has set up automatic recurring gifts on a defined schedule. Recurring donors retain at 80-90% annually, far above the sector average.
DEFINITION
- LYBUNT
- Last Year But Unfortunately Not This Year. Donors who gave in the prior fiscal year but have not yet given in the current year. The primary re-engagement segment.
DEFINITION
“Most organizations do not calculate their retention rate because they do not have a CRM that makes the query easy. The first step is knowing the number. You cannot improve what you are not measuring.”
What is the formula for donor retention rate?
Donor retention rate = (number of donors who gave in the current year who also gave in the prior year) divided by (total number of donors who gave in the prior year), multiplied by 100.
What does a 43% donor retention rate mean?
A 43% retention rate means that for every 100 donors who gave last year, 57 did not give again this year. Those 57 lapsed donors represent fundraising investment, relationship-building time, and future revenue that was lost. The organization must acquire 57 new donors just to stay even before adding any growth.
Why does retention rate matter more than acquisition rate?
A donor retained for multiple years gives more in total and costs less to maintain than a new donor acquired to replace them. Acquisition costs five to ten times more than retention per dollar raised. Organizations with strong retention can grow revenue without proportionally increasing acquisition spending.
Frequently Asked Questions
What is a good donor retention rate?
How do you calculate new donor retention rate?
Should online donors be calculated separately?
How often should I calculate donor retention rate?
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