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The 2017 race has begun, and for fundraisers, January should be a time of assessment. No matter when your fiscal year ends, because so many gifts come in during December, it is a great time to see whether you are on pace to meet your goals.
So, how did you do? Did you meet your goals for December and for 2016?
If you met your goal, congratulations! But, just looking at the total dollars you raised is not enough. It is like going for a checkup that consists only of having your temperature taken. Lots more could be going on that one measure alone doesn’t reveal.
Here are some assessments you should consider running on your 2016 results.
Donor Retention. According to AFP’s Fundraising Effectiveness Project, the national average donor retention rate is 46 percent. How does your organization stack up? Every fundraiser knows how difficult it is to acquire new donors. The cost of acquiring new donors nearly always exceeds the value of their gifts, so keeping your existing donors is critical to improving your Return on Investment. But, unless you calculate your Donor Retention, how do you know where you stand? It also is important to examine the donor retention rate across your different segments. This way, you can adjust your messaging for groups that are underperforming. You can segment your donor file in many ways – by source, by geography, by age, etc. What segments are your best performers and which ones need work?
Giving Trajectory. Believe it or not, you can be winning and losing at the same time. What do I mean by this? Let’s say that you raised more money than last year. Great, right? Well, was that because you had more people giving, people giving more, or both? It is easily possible that you raised more money because you added lots of new donors, but existing donors are decreasing their giving. Or, your existing donors may be giving more, but you are losing donors at an alarming rate. A Giving Trajectory Analysis will tell you what the trends are for your file.
Lifetime Value. What is that donor worth to you? Sounds crass, doesn’t it? However, it is important to know what the average length of time a donor stays active and the average amount given over that time. Why is this important? It helps you spend your acquisition dollars more effectively. If your donor lifetime value is only a few dollars, you need to focus on improving donor retention before you spend money on donor acquisition.
Top 10. Not the Letterman list, but the characteristics of the top 10 percent of your givers. If you can identify the characteristics of this important group, you are a long way toward finding more donors who have potential.
Doing these assessments takes time and that is always one commodity that most fundraisers lack, especially in smaller organizations. If you can’t get this work done in-house, you may want to consider having an outside person do it for you. However you do them, it is important to get them done.
Catalyst Fundraising is a consulting firm dedicating to helping nonprofits improve their return on their fundraising investment. Contact us for help in assessing your fundraising results.