Measuring Donor Participation by Giving Levels

Gift reports provide total dollars raised, a valuable summary.  But, how much can we learn about donor participation from total dollar raised?  Important clues can be found in two gift report areas from 2015-1016 research data provided by AFP’s Fundraising Effectiveness Project (FEP).

1. Donor Renewal Levels: 

Donor retention studies include measuring how many new donors acquired in 2015 renewed their first gifts in 2016.  These results were combined with returning donors from prior years for an overall donor retention rate of 45% according to AFP FEP data (see Exhibit 1).  Continued acquisition of new donors will be essential to replace the 55 percent who failed to give in 2016.  Further, a review of 2016 donors by giving levels shows a healthy rate of first-time donors at the three highest giving levels ($250 and above) at 47%, 60% and 56%, which suggests continued investment in acquisition at these levels also will be rewarded with positive gift revenues.

2. Donor Giving Levels: 

Donor participation also measures revenue from donors whose giving levels were the same as last year, gave more, or gave less (see Exhibit 2).  Upgraded donor participation between 2015 and 2016 was 42%, a   62% increase in revenue and a one-year growth rate of 108%.  Donors who gave the same (27%) were 13% of total revenue, while donors who gave less (30%) caused a revenue loss of over $1 billion (-53%) from 2015 giving, resulting in an overall 2016 increase in revenue of only 5% from these three key donor groups.

Source: http://afpfep.org/wp-content/uploads/2017/04/FEP2017Report4212017.pdf

Summary:

Donor attrition harms every nonprofit with the loss of loyal contributors and their valued gift support.  Greater understanding of how often donors give and their giving levels is essential to preserving their generous commitment.  For questions and comments on interpretations of these FEP analysis reports, contact Jim Greenfield at: fundrazer@gmail.com

To improve your donor retention results, increase revenues and receive detailed donor giving trends, submit your data to the Fundraising Fitness Test at: http://afpfep.org/tools/

AFP FEP Glossary of Terms

In 2006, the Association of Fundraising Professionals (AFP) and the Center on Nonprofits and Philanthropy at the Urban Institute established the Fundraising Effectiveness Project (FEP) to conduct research on fundraising effectiveness and to help nonprofit organizations increase their fundraising results at a faster pace. The Growth in Giving Initiative (GIG) was formally established in January of 2013 with funding commitments by these three founding sponsors, Association of Fundraising Professionals, DonorPerfect Fundraising Software, and the Center on Nonprofits and Philanthropy at the Urban Institute. GIG is based on a unique, real-time, detailed gift-transaction data collection and analysis process and is designed to track several years of results for multi-year analysis of donor acquisition, retention, upgrading and other fundraising metrics within a variety of giving levels.

The AFP Fundraising Effectiveness Project (FEP) has made significant progress since inception in 2006 to define a comprehensive variety of performance criteria for detailed measurement of nonprofit fundraising performance summarized annually in the Fundraising Effectiveness Survey Report. The Growth in Giving Initiative (GIG) now provides the most comprehensive data set of its kind. This data set is transaction-based allowing unique research into donor behavior not previously available. It is now possible to research specific donor retention activities in multiple categories and terms in various FEP and GIG reports to identify separate donor and donor database responses, such as average gift, donor recapture, donor gain/loss rate, etc. The combined FEP and GIG results are the subject of a variety of studies and reports, including the 2015 FEP Donor Retention Supplement (January 8, 2016) and the special Spotlight report “Benchmarking Giving to Human Services Organizations” by the GIVING USA Institute (Issue 2, 2016).

The FEP Glossary of Terms Appendix has been prepared to help ensure clarity in nomenclature, consistency, and broad usage of terminology used in these reports and other donor giving statistical analysis. This new FEP Glossary has been added as an Appendix to the AFP Fundraising Dictionary 2002 (online) and also can be found here.

Examples of the 68 terms in the Glossary are listed below to illustrate the measurement categories included in AFP FEP and GIG studies and reports. In addition, 21 Donor Retention Rate Formulae are listed on pages 6-8 of the Glossary to aid these calculations.

  • donor attrition rate, the number of donors who gave last year but not this year, divided by total number of donors last year.
  • donor participation rate of growth, the increases or decreases in number of donors from one or more years, divided by the number of donors in the initial year.
  • donor recapture rate, the number of previously lapsed donors who renewed this year, divided by total number of donors last year.
  • donor retention rate, the number of donors last year who gave again this year, divided by total number of donors last year.
  • overall rate of growth in giving, the net of gains and losses in giving from last year to this year, divided by total value of gifts received last year.

The AFP Fundraising Effectiveness Project and Growth in Giving Initiative will continue to provide results analysis and comparative benchmarks to aid nonprofit organizational leadership and their fundraising staff to better understand their own performance and, armed with adequate details on their donors’ performance, to increase their overall fundraising results.

AFP FEP Glossary of Terms

The AFP Fundraising Effectiveness Project (FEP) has made significant progress since inception in 2006 to define performance criteria for measurement of nonprofit fundraising results.  The Growth in Giving Initiative (GIG) was added in 2012 to track several years of results for multi-year analysis of donor acquisition, retention, upgrading and other fundraising metrics and statistics within a variety of giving levels.

Because a variety of specific categories exist to identify differing donor actions, such as acquisition, retention, upgrades, etc., these categories are used throughout FEP and GIG reports.  The FEP Glossary of Terms has been prepared to ensure clarity in nomenclature, consistency, and broad usage.

This new FEP Glossary of Terms is now being released as a “Exposure Draft” (January 22, 2016) for public comment, after which it will be added as an Appendix to AFP FEP and GIG reports and to The AFP Fundraising Dictionary Online.

If you wish to offer comments and suggestions on the terms and their definitions in the FEP Glossary of Terms, please do so on or before April 12 to Cathlene Williams, AFP Coordinator to the AFP Fundraising Effectiveness Project, at: Cathlenewilliams@cox.net

The FEP Glossary of Terms is divided into four sections in order to correspond directly to the metrics included in FEP and GIG reports that define the analytics used and performance formula described:

  • Group A:  Terms Relating to Donor Retention Strategy
  • Group B-1:  Terms for Donor Retention Rates
  • Group B-2:  Formulas for Donor Retention Rates
  • Group C:  Terms Relating to FEP Gain/Loss Reports

A few examples of FEP Glossary terms illustrate the separate measurement categories and the formulas used:

  • Group A:  donor acquisition, the process of identifying and acquiring new donors.  AFP Fundraising Dictionary (2002); and
  • Group A:  donor upgrade, the activity by which a donor increases his or her level of giving.  AFP Fundraising Dictionary (2002)
  • Group B-1: includes a variety of comparative analysis terms, such as new donor acquisition rate, new donor retention rate, repeat donor retention rate, etc., along with the mathematic formula for each in Group B-2.
  • Group C: captures a variety of terms for gain/loss measurement, including: lapsed donors, recaptured donors, repeat donors, same donors, downgraded donors, and more.

The AFP Fundraising Effectiveness Project and its related reporting units (see “Reports” section of this FEP  website), Fundraising Fitness Test (in the “Tools” section) and the overall Growth in Giving Initiative are designed to aid nonprofit organizations and their fundraising staff to better understand their own performance and, armed with adequate details on donor retention performance, to increase their results.