measure fundraising success n3o 1

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. We need to know 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 in the future.

Fundraising success is not always simply about how much money came in, however. There are several key indicators of how well your fundraising has done, and sometimes they might even be hidden in plain sight.

A holistic and useful way to measure the impact of fundraising campaigns includes carefully considering the following areas:

1. Donor acquisition

Definition: The number of new donors giving to your charity, who had never donated before.

Why is it important?

Knowing where your new donors are coming from provides you with valuable insights into which fundraising touchpoints are working well for your charity, and therefore where more efforts should be concentrated. However, simply having high numbers of new donors is not a clear sign of success alone, it is the beginning of future research to be done. Looking at donor acquisition will help you understand how much- and in which direction- your organisation is growing

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
  • Digital advertising– Advertising through search engines requires an allocated budget, but digital adverts exposes your charity’s work to the most wide and varied audiences
  • Social media- Effectively use social media profiles through putting together engaging, meaningful content that will keep audiences coming back. Use human stories and a more personal tone to build a relationship of trust.
  • Email the trusty email is never to be underestimated! Time your emails carefully and fill them with relevant and concise content that is easily digestable- and with a direct action.
  • Direct mail- Some may be surprised how many donors still rely on direct mail over digital communication. 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, year or bi-annually.

Why is it important?

Charities actively invest in acquiring new donors, however the real benefit of acquiring new donors is retaining them over the long term. Charities must focus on ways to retain donors to stay up and running, otherwise they’ll lose out on much of the investment it took to acquire new donors.

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%.

As the flip side to lapsed donors, donor retention gives you an insight into what is working for your donors, how productive your strategies are and what kind of donor behaviours you are observing.

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. Once you have successfully acquired new donors, your donor retention rate will tell you how satisfied donors are with your charity- and through analysing their behaviour- hopefully even more.

3. Lapsed Donors

Definition: Lapsed donors are those who have simply stopped donating to your charity and so have effectively stopped supporting your work. A report for The Civil Society defined a “lapsing donor” as one who donated between 12 and 24 months ago.

Why is it important?

Though having a few lapsed donors are inevitable, organisations should pay attention to the numbers leaving and use it to guide strategic development.

Charities cannot afford to let their rate of lapsed donors go unchecked, since fundraising relies on regular donations for growth and future planning. Having less lapsed donors, means higher donor retention.

The more donors you have retained, the more energy you can put into increasing the donation growth rate.

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.

Why is it 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?

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.

Why is it 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. The overall success of your charity should be reflected with steady upwards donation growth.

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.

Why is it 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.

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