Soapbox Engage Blog

Tracking and using the right data to assess the performance of your fundraising strategies is essential for all development professionals. To improve your donor care, build relationships, boost your retention rate, and raise more money, you need to understand your donors!

Fortunately, with the correct data, you can get a good grasp of donor behavior and measure the success of your fundraising efforts. The key is to know which data points to pay attention to. Have no fear. We gathered the top metrics every nonprofit should track to understand your donors, care for them well, and ensure you’re getting the most out of your fundraising.

Table of Contents

1. Donor retention rate
2. Donor acquisition costs
3. The lifetime value of a donor
4. Event conversion rate
5. Number of donors who increased giving
6. Monthly and yearly donor growth
7. Recurring gift percentage

Donor Metrics Basics

In short, donor metrics are the statistics that help you measure your fundraising, marketing, and donor care performance. Depending on what kind of CRM or donor management system you use, many of these critical data points should constantly update so you have access to up-to-the-minute insights into your work.

Really, the best way to gather this kind of information is to have a personal conversation with every single donor to find out what resonates with them, inspires them to give, what they know about your organization and cause, and so on. But those hundreds or thousands of conversations would just take too much time.

Donor metrics are a second-best option that helps take some of the guesswork out of your donor care and fundraising. The key is to know what metrics actually tell the right story.

7 Metrics Every Nonprofit Development Professional Should Track

Every nonprofit is unique, and fundraising looks a little different. Therefore, every organization should find the right set of data points or success indicators that track what’s most important to you. Still, some donor metrics apply to most--if not all--nonprofits. Here are the top donor metrics most industry experts believe development professionals should track.

1) Donor retention rate

The first gift is the most expensive and challenging donation to obtain. Still, the second donation is probably the most important. Many studies show that 3 out of 4 new donors do not give again, yet 60 percent of donors who give a second donation will continue to give.

Your donor retention rate is the number of donors who gave last year and this year, divided by the total number of donors.

The goal here is to get your retention rate as high as possible because that means you’re doing an excellent job of connecting with donors and really engaging them in your mission. It’s also cheaper to maintain recurring donors than it is to find new donors.

2) Donor acquisition costs

As we mentioned above, it’s more expensive to bring in new donors than retain your current supporters. However, attracting new donors is an ongoing and critical part of the fundraising process. Therefore, it’s essential to know how much it costs to bring in each new donor so you can allocate resources effectively and identify any areas that you can improve the process.

Your donor acquisition cost is the amount of money you spend on attracting new donors divided by the number of supporters you acquire.

For example, if you run a Facebook campaign that costs $1,000 but you bring in 500 new donors, your donor acquisition cost for that campaign was only $2 per donor! Now, if your average gift is $10 per donor, then you’re really doing well here, and you’ve got a pretty high return on investment (depending on who you ask).

On the other hand, if your donor acquisition costs were $8 per donor and the average gift of each donor is $10, you might want to look into lowering your donor acquisition costs to increase your profit margin.

The real goal is to help each new donor become a recurring donor and loyal supporter of your mission!

3) The lifetime value of a donor

Just like smart business owners track the lifetime value of a customer, nonprofits must know and track the lifetime value of a donor.

The lifetime value of a specific donor is the sum of all the donations from that individual or household. The average lifetime value of a donor is the average donation amount multiplied by the average lifetime of a donor (the number of years a typical donor stays involved in your nonprofit). In short, the lifetime value of a donor is a prediction of how much money you can expect to receive from an individual throughout the time they’re connected to your nonprofit.

If you have a sense of the financial value each new donor brings to your nonprofit, then you can find ways to boost that value and make more informed decisions about how to allocate resources.

When the lifetime value of a donor is much greater than your donor acquisition costs, then you should feel confident that your nonprofit is financially in a good place.

4) Event conversion rate

Your donor event conversion rate is the number (or percentage) of people who become new donors or increase their giving after attending one of your events. While other metrics like the cost per dollar raised or the return on investment are valuable, the event conversion rate indicates how well your team performs on follow-up and engagement activities.

Really, the event conversion rate points to how well you’re leveraging interactions at an event and turning those into genuine relationships. People are far more likely to invest their time, energy, and resources to feel valued and believe the organization brings value and meaning to their personal lives.

5) Number of donors who increased giving

Some nonprofits call this an “upgraded donor” or someone who gave more this year than they did the previous year. This indicates your supporters like the work you’re doing, trust you, and want to invest more of their hard-earned money into the mission!

Implementing strategies to increase donor giving is a huge boost to your overall fundraising! And, by tracking each donor’s giving history, you can find the trends that prompt those increases. Perhaps their giving increased when you invited them to join the monthly giving program. Or maybe you notice that quite a few donors increased their giving after attending the same event.

Identifying these commonalities and trends can help you expand them across your entire donor database and really boost your fundraising!

6) Monthly and yearly donor growth

It’s always important to see how you’re doing monthly and annually. How many new donors did you get? How did that number compare to last month and last year? How much money did you raise, and how does that compare to the previous month and this time last year?

Being attentive to these performance metrics can help you understand where you are compared to your fundraising goals, so there are no financial surprises. It can also help ensure you’re growing year over year and offers information to measure performance, and helps set realistic goals going forward.

7) Recurring gift percentage

Tracking the percentage of your donations that are recurring gifts from supporters who give throughout the year is very helpful. This statistic can help you predict how much of your current revenue you can confidently expect to receive going forward.

Many nonprofits also leverage this information to help them create targeted campaigns to increase those gift amounts or the frequency of giving. Other nonprofits use this metric to help them increase the number of recurring donors overall.

No matter how you gather and apply these donor metrics, it’s critical to have a clear and accurate understanding of how your fundraising efforts are working for you. Once you understand where you are now, you can begin to analyze each metric more strategically and identify things you’re doing well and areas that have room for improvement. All of this will help you continue to grow and accomplish your mission!

Here are three more resources to help boost your fundraising efforts.

• Ladder of Engagement: Nonprofit Fundraising Strategies: A ladder of engagement is made up of different levels of interest and involvement in your organization. It’s a tool to help you grab followers and move them toward becoming donors. This blog will help you develop or improve your ladder of engagement to grow your donor base from your followers.
• 3 Ways to Revamp Your Fundraising Strategy with Matching Gift Appeals: Employer matching gifts are a great way to engage donors and revamp your current fundraising strategies. However, it can be tough to know exactly where to start with matching gifts. This blog includes three strategies to incorporate matching gift appeals into your strategies.
• Why Nonprofits Should Use Fundraising Infographics: Infographics have become very popular across most social media platforms because people are more interested in scanning and scrolling than in reading dense text. There are loads of benefits nonprofits can enjoy with the right infographics, too! Head over to this blog to get some of the top reasons you should add them to your fundraising content.