Whether you’ve launched an experimental new fundraising strategy, or you’ve been churning out a tried or trusted formula for years, charities need to know how to measure fundraising success.
What worked, what didn’t and why? Being able to meaningfully measure the success of a campaign will guide future strategies and mean you can plan to use your (often limited) resources more efficiently.
There are several key indicators of how well your fundraising has done. We’ve selected the following 6 metrics to help measure the impact of your campaigns:
1. Donor acquisition
Definition: The number of new donors giving to your charity, who had never donated before.
(New donors/Total donors) x 100 = New Donor acquisition %
e.g. (2,000/10,000) x 100 = 20% new donors
Why is donor acquisition important?
Knowing where your new donors are coming from provides you with valuable insights into which fundraising touchpoints are working well for your charity. Once identified, you can double down and identify where efforts should be concentrated.
This metric can help you understand how much the organisation is growing, though simply having high numbers of new donors is not a clear sign of success alone. The rate at which your charity is acquiring new donors must be looked at in conjunction with donor growth rate, donor retention rate and donor churn (more on these later!) – to build up a complete picture for your metrics.
Psst!
Some strategies for donor acquisition:
- Search Engine Optimisation- drive traffic to your website through using specific, high ranking keywords in your content. Use Ubersuggest or Rankmath for critical insights.
- Digital advertising– Research shows that annual digital advertising is forecasted to grow between 9-13% year on year until 2025, indicating the need for charities to spend smart with this channel.
- Social media- A tip is to use human stories and a more personal tone to build a relationship of trust.
- Email– the trusty email is never to be underestimated! Remember the 3 keys – time your emails carefully, fill them with relevant and concise content and end with a CTA (call to action).
- Direct mail- Understand donor preferences and segment donors according to how they best wish to be contacted by your charity.
2. Donor Retention
Definition: The number of donors who have stuck with your charity makes up your donor retention rate. These are the people who keep coming back to you to give, over and again- whether they every quarter, every year or bi-annually.
Recurring donors (this year)/All donors (last year) x 100 = Donor retention %
e.g. (8,000/21,000) x 100 = 38% retention rate
Why is donor retention important?
Charities actively invest in acquiring new donors, however the real benefit of acquiring new donors is retaining them over the long term. For many charities, donor retention is a priority metric as they provide a good indicator to an organisation’s sustainability.
Most charities are already tuned into how important it is to have a high donor retention rate, with 40-45% being a widely-accepted benchmark. An organisation would calculate this by looking at the number of repeat donors in the current year compared to the previous year. If out of 12,000 donors, 4000 were repeat donors, then your donor retention rate is 33%.
Remember, it is easier and more affordable to retain existing donors than it is to get new ones. Simply retaining donors isn’t the golden bullet however, your charity should be looking at donor retention together with donation growth.
It is possible you have held onto your donors, however they are not being inspired to give more every time they donate. The donor retention rate will tell you how satisfied donors are with your charity-and through analysing their behaviour- help you how to engage with them more.
3. Lapsed Donors
Definition: Lapsed donors are those who have stopped donating to your charity within a specific time. A report for The Civil Society defined a “lapsing donor” as one who donated between 12 and 24 months ago.
Why is understanding lapsed donors important?
Though having a number of lapsed donors are inevitable, organisations should pay attention to the numbers leaving and use it to guide its engagement strategy.
A high lapsed donor percentage can mean several things – infrequent feedback, change of donor circumstances or fatigue. Overall though, it can indicate a broader issue of lack of donor loyalty to the organisations cause.
The Context Charity Benchmarking Report (2016) reported that the average donor database included 34% lapsed donors in comparison to active givers who made up 11%. Organisations should look to measure and reduce this year-on-year whilst pushing donation growth rates.
4. Donation Reactivation
Definition: Donor reactivation refers to supporters who had stopped donating to your charity for a significant business period but are now re-engaged.
This is calculated by identifying donors who donated in previous years (except for last year), and then restarted.
e.g. A donor who donated in 2018 and 2019, but stopped in 2021. They then donated again in 2021.
Why is donation reactivation important?
Donor reactivation is a great opportunity to understand your supporters better and do some detective work. What might your charity have done to entice donors back again – engaging with a new influencer, launched a new fundraising campaign?
Look at and actively track donor behaviour around the times of particular fundraising drives to gauge what may have triggered them to donate to you again.
An effective CRM system will help you build an up-to-date donor profile of your supporters. This will give your charity the most important behavioural data to understand reasons donors originally left, and what your charity managed to do (through comms, direct appeals, general campaigns, new branding, or anything else) that brought them back.
5. Donation Growth
Definition: Donation growth is how much the size of donations have increased over any given period of times. These are often measured from one year to the next but can be broken down into quarterly or monthly analysis. To calculate:
1. Total donations this year/Total no. of donors = Average donation amount this year.
2. Replicate step 1 for the previous year (or years).
3. (Av. donation this year – Av. donation previous year)/Av. Donation this year x 100.
e.g.
1. £3,300,000/15,000 donors in 2022 = £220 average donation
2. £2,700,000/13,500 donors in 2021 = £200 average donation
3. (220 – 200)/220 x 100 = 9% donation growth.
Why is growth important?
Strong donation growth is a clear sign your fundraising strategy is effective, however stagnant or declining rates will require careful analysis to see what is putting donors off giving, or why they are not being inspired to give more.
A quick win to increase this metric is to identify mid-tier or high-net worth donors from your donor database and develop a strong engagement strategy. This may be pitching bespoke higher value proposals/projects, VIP events or targeted communications.
6. Donor Churn
Definition: Donor churn is simply how many of your donors stay or leave within a given year. It is a calculation of your donor acquisition offset again the number of lapsed donors.
No. of new donors (this year) – No. of donors who left (this year) = Donor churn
Why is understanding churn important?
Keeping an eye on donor churn means you can determine and predict the pattern of donor growth.
If your charity had 50 donors in 2021 and in the same year 25 new donors joined and 10 donors left, this means you had an acquisition of 25 donors and a lapse of 10 donors. That means in 2022, you had more donors than the previous year and a donor churn of 15 per year for 2021.
However, if things were the other way and in the same 2021, you had 10 new donors join (donor acquisition) and 25 donors leave (donor lapse), then you would begin 2022 with less donors with a donor churn of -15 per year for 2021.
Always look to see if your donor acquisition is higher than your lapsed donors to understand the rate of donor churn and try to pin this to campaigns that may have triggered support to flourish or dwindle.
