Donor Analytics: The Sweet Spot of Fundraising

Fundraising plans that include data analytics are like chocolate and peanut butter—both are good on their own, but they are so much better together. 

The development staff is currently pouring over their fundraising results from last year. The average gift rate, response rate, and number of new donors are top of the list in terms of metrics. But wait! What if there was something even better that you could do to assist your nonprofit organization’s donor data analytics? 

Many fundraising plans I have reviewed have great, lofty goals but lack the numbers to use as a benchmark. Sadly, like chocolate and peanut butter, sometimes donor data and fundraising strategies are kept apart. 

The sweet spot of fundraising is using the strategy to guide, and donor data to inform, the process. 

Target the right donors, in the right way

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6 Donor Metrics That Can Positively Impact Your Nonprofit’s Fundraising Strategy

I like to think of donor data as the way every donor in the database is collectively speaking to me. For example, donors speak very loudly when they only give one gift. What are the one-time donors saying? 

The answer may be different for each one of them. Some may have given a donation to your organization’s walk event that their friend participated in last summer. 

Some donors may have given to celebrate a friend’s birthday with a gift to their local humane society. If we are not analyzing second-gift conversion, we may not know that our database includes, for example, 55% of donors who have only given one time!

1. Second Gift Conversion

When drafting a fundraising plan, including a second gift conversion is a wise move. When you are analyzing this metric, second gift conversion provides the opportunity to strategize on ways to engage those donors that have only given one time. The word that next comes to mind is segmentation. 

You may know 55% of your donors in the database have given only once, but you want to know even more about the characteristics of these donors. The next step is to pull the data for a specific time frame. A minimum of three years or up to five years seems to work well. 

Typically, you want to know; how many donors are event donors. How many are tribute or in memoriam donors? How many gave to a peer-to-peer initiative? 

But if you eliminate these groups for a minute and focus on online gifts and direct mail gifts, you may find that originally you had 10,000 donors only giving one gift, and once the segmentation is done, this number may be reduced to 6,000 donors giving only once. Now you can focus on this group of donors for lapsing strategies such as a ‘miss you’ campaign or phone appeal. 

I don’t want to give you the impression that the other 4,000 donors in the peer-to-peer, event, or tribute categories are not important. Traditionally, these donors are hard to engage in additional gifts outside of the original way they contributed in the first place. 

So, by reducing your list from 10,000 donors to 6,000, your ask for the second gift can be segmented even deeper. You are more apt to see success with this strategy. 

I love testing! The next step I recommend is to take 25% of the file or 1,500 donors and appeal to them for a second gift through creative storytelling. 

Measure the result of soliciting this group of 1,500 donors. If you successfully raised money and engaged donors from this small group, you can appeal to the remaining 4,500 individuals. 

Now your fundraising plan includes second gift conversion data to inform strategy. 

Some ways to inspire second gifts from a stewardship perspective are a welcome call, a gratitude report, an appeal-specific thank-you letter, or a handwritten note.

2. Active Donor Rate

Checking on how many active donors you have is another metric often overlooked. Yet, it is the most obvious. Fundraising professionals tend to know the number of records in their database but are shocked to see how many are active. 

The definition of active donors is a long-debated question in fundraising circles. Three years is what I tend to use for active donors. Yes, your donor database may have 100,000 donors, but if only 30% are active, you may be in for a shock! 

I often use the phrase “fish in your own pond” when it comes to donor database analytics. One of the most challenging parts of fundraising is striking the perfect balance between attracting new donors and cultivating current donors. 

Inserting the ‘active donors’ metric into your fundraising plan with a benchmark and a goal is a great way to see if you are moving the needle on engaging your current donors. 

I often use the phrase “fish in your own pond” when it comes to donor database analytics. One of the most challenging parts of fundraising is striking the perfect balance between attracting new donors and cultivating current donors. 

Inserting the ‘active donors’ metric into your fundraising plan with a benchmark and a goal is a great way to see if you are moving the needle on engaging your current donors. 

Any gifts from this lapsing group would then contribute to another metric you need to measure: reactivation! 

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3. Reactivation 

Reactivating donors is so rewarding and usually the most cost-efficient way to raise funds. To identify and reengage this group, you didn’t have to rent a list, hold an event or send unaddressed admail. You simply went back into your database and inspired lapsed donors! 

Can we celebrate for a minute? We often don’t take time to celebrate another important metric: the renewal rate. 

4. Renewal Rate

Renewing donors from one year to the next is the key to sustainable fundraising. Many senior leaders take this metric for granted when the truth is this is a huge amount of work! 

Consistent, meaningful, and strategic stewardship can positively influence your donor renewal metric. If you have a low donor renewal number, invest in a donor survey or a focus group. Freshening up your stewardship plan is a great team collaboration opportunity too! 

5. Donor Attrition

When we engage new donors, the goal is for every donor to stay donating to our organization forever! Sadly, this is not realistic. Reviewing your donor attrition or how many donors you are losing every year is imperative. 

Donors stop giving for so many reasons, including financial challenges, death, new interests, or lack of communications from your organization. Measuring your donor attrition typically results in a negative number, meaning you are losing more donors than you are acquiring. If you are on the plus side when you calculate this metric, you have another reason to celebrate! 

6. Long-term Donor Value

Long-term donor value (LTDV) is one of those metrics that provide insight into future giving and assist with building a case for an acquisition campaign. From a senior leader perspective, LTDV can help establish what resources are needed to ensure stewardship strategies are in place. You want to engage as many donors as possible, so they give for the longest time possible.