Certified Nonprofit Professional Practice Exam

Is it typically more expensive to retain existing donors than to acquire new ones?

1. True

2. False

3. Depends on the organization's size

4. Only true for large nonprofits

The correct answer is: False

Retaining existing donors is generally seen as less expensive than acquiring new ones due to several factors. Establishing a relationship with a donor—through trust building, engagement, and ongoing communication—pays off over time, as existing donors are more likely to continue contributing to an organization that they feel connected to. The cost associated with donor acquisition often involves marketing expenses, outreach efforts, and resources dedicated to building awareness among potential donors, which can add up significantly. Moreover, once a donor has made contributions, the likelihood of repeat donations increases because they are already familiar with the organization’s mission, values, and impact. Research in the nonprofit sector consistently shows that the cost per donation increases when targeting new donors due to necessary promotional efforts and the need to establish credibility. Therefore, the assertion that retaining existing donors is typically more affordable than acquiring new ones is supported by industry data and trends, affirming that maintaining relationships with current supporters can lead to long-term financial sustainability for nonprofits.