Three Fundraising Metrics to Obsess Over Right Now

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Apr 23

Ariel Glassman

Three Fundraising Metrics to Obsess Over Right Now

by Ariel Glassman



Behind every great fundraising team is a great development plan. And every great development plan includes strong evaluation, including the right metrics. Staying ahead of the curve in fundraising requires continuous monitoring and improvement. If you don’t measure something, you can’t manage or grow it.

Because fundraising looks a little different at every nonprofit, you’ll use a unique set of success indicators to track what’s important to your organization. Still, there are three metrics that apply to most nonprofits’ fundraising work, regardless of size or sector. This trio is the foundation for analyzing your fundraising outcomes and the overall health of your development program.



Metric #1: New Donor Retention Rate

The percentage of first-time donors who make a second gift.

Acquisition and retention are broadly-used indicators of fundraising health. Many organizations track total donor retention as well as the number of new, first-time donors they acquire each year. But, there’s another retention metric worth obsessing over: the new donor retention rate.

While a donor’s first gift is the most difficult and expensive gift to obtain, their second gift is the most important. Nationally, more than 3 out of 4 new donors disappear into thin air, never to be seen again. Yet, 60 percent of donors who make a second gift will continue to give. Getting new donors to that critical second gift is the key to growing short-term revenue and increasing the lifetime value of your donor base. This metric can tell you how well your donor stewardship efforts are working. If you don’t see progress year-over-year, it’s time to focus on stewardship.

 

New Donor Retention Rate = 

(# of Year 1 Donor Households that Gave in Year 2) ÷ (# of Year 1 Donors)

 

Metric #2: Event Donor Conversion Rate

The percentage of event donors who convert to or add other giving methods and opportunities.

Fundraising events can be expensive, time-consuming, unpredictable, and stressful. They can also spike public interest in your organization and give you an opportunity to woo donors to more reliable and efficient donor engagement and fundraising activities. Many organizations track their event’s return on investment (ROI), cost per dollar raised (CPDR), number of new donors acquired, strict event donor retention rates (how many event donors give again at an event in the future), average gift size, zero-giver rates, and many more. All of these metrics tell us, in one way or another, how well that particular event performed, but they don’t reveal how well your event fulfills its purpose in the grand scheme of your fundraising ecosystem. Enter donor conversation rate.

This metric is a strategic indicator of how well your follow-up stewardship and engagement activities drive event donors towards a second gift (the pure retention rate of event donors, also worth tracking) and towards deeper mission engagement. It’s the measure of how well you are leveraging transactional event interactions into actual relationships with your donors –an indicator of the value and meaning you bring to their lives.
 

Event Donor Conversation Rate =

(# of Multi-Gift Households Since Event) ÷ (# of Event Households)

 

Metric #3: Number (or Percent) of Loyal Donors
How many active donors have given for 5-10+ years

Loyalty is one of the key indicators of propensity to give a major gift – right up there with volunteering. It’s also one of the only easily trackable indicators for propensity to make a planned gift. Many nonprofits have experienced the classic bequest scenario – a donor who gives $50 annual gifts for 25 years passes away and leaves a significant gift in their will. This leads staff to ask: who could have seen it coming?   

While no one can predict a surprise bequest, a loyal donor metric can help you understand how fertile your donor base is for planned giving. If you can identify how many donors meet your loyalty criterion, you can go one step further and identify who they are – which means you can focus specific cultivation steps on them or even send them more information about bequests for your organization. This isn’t just a metric – it’s actionable strategy.

Before you can calculate your loyal donor metric, you need to establish what “loyal” means to your organization. For some older organizations, it could be 25 years of giving or more. For younger organizations, perhaps the criterion is a donor who has made gifts in 7 of the last 10 years.

 

Percent of Loyal Households =

(# of Loyal Households) ÷ (# of Active Households)

 

Let’s keep this conversation going. We want to hear about your favorite fundraising metrics! Want to chat with us about evaluating your fundraising program? We are here to connect.
 



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