February 27, 2015 | Read Time: 1 minute
Here are some key measures to consider as you think about how to hold on to your donors.
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Donor-retention rate: The percentage of all donors who give in two consecutive years. This is one of the fundamental measures of how well your organization is holding on to donors. To calculate this figure, determine the number of donors in one year and the number of those donors who contribute again the following year. Divide the second number by the first and multiply the result by 100: (year 1 donors who make gifts in year 2 ÷ all year 1 donors) × 100.
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First-year retention rate: Make the same calculation using the number of new donors in a given year and the number who contribute again the following year.
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Multiple-year retention rate: Make the same calculation, counting all donors whose year 1 gift was not their first to the organization.
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Donor-attrition rate: The inverse of the donor-retention rate, this figure is the percentage of donors who don’t give for a second year. Just subtract your retention rate from 100 to find the percentage of donors who haven’t given again.
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Lifetime value: The total amount of money a donor is expected to contribute over the course of his or her relationship with the organization, subtracting the amount spent to recruit and retain the donor.
Roger Craver, author of the book Retention Fundraising: The New Art and Science of Keeping Your Donors for Life, uses this formula: (average dollar amount of a donor’s gift to your organization) × (the number of repeat gifts per year by that donor) × (average number of years your donors remain on your active file) – (costs of soliciting and servicing the donor over the period measured).
