Fundraising Metrics Research Stewardship

Reflections on teaching the Fundraising Effectiveness Project’s Donor Retention Self Assessment Workshop

Over a year ago, my friend and colleague Michael Buckley of The Killoe Group asked if I wanted to teach the Association of Fundraising Professionals’ official course on donor retention, powered by data from the Fundraising Effectiveness Project. Since my company is a data partner of FEP, I jumped at the chance.

It takes a few months to officially approve and schedule the course itself but in late January 2019, Michael and I set up in a conference room at the Marriott in Saratoga Spring, NY and readied ourselves for seven hours of data driven discussion. While he and I had spoken about the key performance indicators of FEP’s data before, we had never done an intensive all day workshop around it and were both excited and nervous to see how long we could keep the attention of our participants.

I thought it would be useful to break down the ways that the course itself is structured and the practical realities of putting this vital data set and metrics in front of actual fundraisers. Here’s what I learned from doing this course.


The AFP has put together a stellar set of resources for workshop organizers when it comes to getting the course together. A thick and well organized faculty folder was provided as well as access to a recording on how to properly teach the course. Slides were also provided to help guide both faculty and students through the material.

The Donor Retention Workshop has three primary learning objects, which we debuted upfront:

  • Identify effective practices to retain and upgrade donors to improve fundraising effectiveness
  • Prepare a donor retention plan for the participant’s organization
  • Use data from growth-in-giving reports to develop growth-oriented fundraising strategies

With these three primary objectives serving as our anchor, we started to unpack the realities of working with donations data and how to leverage the free tools that FEP has created and put them into practice.

Section One: Why Organizations Lose Donors and Money

As we kicked things off in earnest, I was nervous that putting tons of charts in front of participants would scare away the less data savvy folks in the room. Yet what was great about the course is that it starts off with a lot of great foundational information on why it’s important to pay attention to retention.

Michael and I stressed that retention is an important metric to pay attention to when addressing donor attrition (or having people stop donating to your organization). It is one of the best ways to stop revenue loss at a nonprofit as well as the easiest path to growth of the organization.

Simply looking at overall revenue profit and loss on a yearly basis is a recipe for disaster down the line, since a few large gifts may mask an underlying issue of support of your organization from your donor base. We reminded the room that their donors are not their donors and unpacked excellent research by Adrian Sargeant on lapsed donor behavior.

Section Two: How Keeping Donors Increases Fundraising Success

This is when the rubber really started to hit the road, where we dove into the harsh reality of donor retention impact on long term growth. Sargeant’s research demonstrated that increasing the level of retention by 10% would improve the net growth in giving for a “typical” charity database by 50%. We stressed that retention was both a short term and long term strategy that would never fail.

The top reason that donors stop giving to a nonprofit is that they feel that the organization no longer cares about them, which is why we stressed the importance of prompt and gratitude focused thank you communication. The ability to thank a donor in an authentic way is well demonstrated as the most effective way to keep that donor and we didn’t let our participants forget that.

Section Three: Measuring the Effectiveness of Your Fundraising Efforts

This is where the FEP data really started to come out and play. While I’m personally used to getting up to date findings from the FEP research team, it was really exciting to see how these have been folded right into the faculty curriculum to ensure that anyone teaching this course would be able to speak about the most up to date data possible.

Key findings from 2018 that we related were:

  • Larger nonprofits perform much better than small ones
  • New gifts / donor generate the largest growth in gift dollars / donors
  • Lapsed new gifts / donors represent the greatest losses in gift dollars / donors, particularly for the lowest performing organizations

One of the most effective tools that we were provided were the Kirkwood Case Studies, which were targeted discussion items around a fictional children’s education nonprofit that allowed nonprofits to identify with the issues raised in a way that they could relate with yet not feel defensive about comparing themselves to a “more successful” organization. Kirkwood was designed to be the perfect strawman, creating insightful discussion that generated some of the most exciting discoveries I’ve experienced.

Section Four: Developing a Successful Donor Retention Plan

After an excellent lunch, we got down to the business of unpacking the case studies and seeing what we could actually do with them. One area that was not included in the faculty guide but helped us greatly was the concept of developing Donor Personas.

A Donor Persona is a way of articulating messaging and strategy around a particular subset of donors. For simplicity, we had our groups work on three primary donor personas that we then crafted a strategy matrix around:

  • New Donors: one of the worst retention rates industry wide is around new donors to an organization, with the average organize losing 25% or so of their first time donors. The group came up with a great matrix to unpack strategy, tactics, and metrics around new donor engagement.
  • Lapsed Donors: this is where retention really starts to come into play, since it costs $1.25 to acquire a new donor yet can be significantly less costly to bring a recently lapsed donor back into the fold. The group came up with several strategies around how to bring a lapsed donor back into the fold that focused on providing a personalized touch.
  • Recaptured Donors: the unicorn of the retention world and the one that can cause the most stress and aggravation is trying to bring donors who have lost interest for several years in a row back into the fold. The group had some excellent strategies and tactics to address these types of donors, with a particular focus on individual and personalized outreach.

We encouraged all groups to think about how they would track this information in an effective way. What types of metrics mattered and what were simply vanity metrics with no bearing on outcomes? And in one of the most important growth points in the FEP data, we also encouraged the participants to think about retention in an omni-channel way.

The reality is that the most effective donor engagement strategies are ones that empower donors to give through a wide variety of mediums, yet with only so many hours and resources at our disposal we encouraged the group to be effective in how they would implement any of the strategies they thought of.

Section Five: Review and Apply What You’ve Learned

As we geared up for the end of the workshop, we wanted to ensure that each and every single participant would be able to walk out of the workshop with something actionable specific to their nonprofit. We encouraged each of them to come up with a goal around retention that they could work on, asking them to be SMART about their planning.

The results were fantastic. A few highlights:

  • One participant had run her actual data through the free tools provided by FEP and brought her print out of the results. We were able to sit down and develop a plan that focused on her top level donors with a realistic stewardship plan that involved personalized outreach through phone and direct mail
  • A participant who came up from New York City (!) stated that his organization focuses heavily on email campaigns that were crisis based in their messaging. As he worked through the data in the case study, he began to realize that adding another messaging layer around and educationally based outcomes report to donors would be an excellent way to create a long term relationship
  • We discussed how creating a culture of philanthropy is a two way street, where many times our organizations may be the first exposure an individual has with giving and our ability to steward new donors right away could mean the beginning of a long term relationship
  • We also discussed the importance of using data to demonstrate our own value as fundraising professionals to our stakeholders, especially as it relates to the salaries we draw. Being able to use data strategically will have an immediate effect on morale and burnout in our industry.

The workshop was one of the best educational experiences that I’ve been a part of and hope that others invest the time and very reasonable resources into implementing this course in their own communities.

Fundraising Metrics

Keeping A Finger On The Pulse Of Your Organization’s Health

We all know that fitness is important to stay healthy, focused, and to overall enjoy our lives. Yet have you ever approached your nonprofit’s fundraising data the same way as you would your own health? When you’re first starting a training program, you don’t immediately jump into the heaviest weights or the highest incline on the treadmill. Today, we’re going to help you dust off those data skills, stretch your analytical mind, and put that brain to work.

What is the Fundraising Fitness Test?

In collaboration with PSI/Adventist, the Fundraising Effectiveness Project has developed the downloadable Excel-based FEP Fundraising Fitness Test (#1). It allows nonprofits to measure and evaluate their fundraising programs against a set of over 150 performance indicators by five donor giving levels. The fundraising performance reports are generated by inserting gift transaction data into the Fundraising Fitness Test Excel template.

However, we are going to concentrate on the primary items to review when first getting started with the Fundraising Fitness Test. Having data is important but we want to focus on the primary indicators that are going to be actionable and informative when you are planning your appeals and campaigns.

What are the standard reports to focus on?

Having over 150 performance indicators can be overwhelming if you’re just now getting into deep data dives that the Fundraising Effectiveness Project analyzes in its own work. That’s why we’ve put together this handy training guide so you can start getting ready for your own fitness test. Let’s look at some of the most interesting indicators that your nonprofit should pay attention to.

Donor Retention RateThe number of donors who gave last year and gave again this year, divided by the total number of donors last year.

New Donor Acquisition Rate – The number of new donors this year, divided by the total number of donors last year.

Net Gain of Donors – The net of gains in the number of donors minus losses in the number of donors from last year to this year, divided by the total number of donations last year.

Average Gift – The total dollars received divided by the total number of gifts received.

Growth In Giving – The net of gains and losses in giving from last year to this year, divided by the total value of gifts received last year.

Lapsed Donors (or Attrition Rate) – The number of donors who gave last year but not this year, divided by the total number of donors last year.

As mentioned, these are just the beginning of the key performance indicators that your nonprofit should be paying attention when loading data into the Fundraising Fitness Test. But why are these important in the first place?

The importance of fundraising fitness

Health is important. And just like our own health care system, your nonprofit’s health can be complicated and frustrating if you aren’t sure what to do with the information you’re given. The above metrics are a great start to understanding what is going on with your donors, but what exactly should we do about it?

We’ve heard from Ben Miller before on the importance of some of the metrics outlined here. Consider that a great starting point if you’re looking for concrete details on what to do when you have the data run through the fitness test. We have also gotten a deep dive from Jay Love on retention—one of the best starting points for understanding how your organization is doing—with some particularly exciting insights into household giving.

Yet why does any of this matter? What happens if you’re bringing in enough money to cover the bills, perhaps even exceeding last year’s revenue goal? What is the Fundraising Fitness Test going to actually do for your organization?

Let’s take a concrete example and unpack it. Let’s say your organization’s overall donor retention rate is at 59%, so you’re keeping a majority of your donors. However, you can’t just look at retention rate for a full understanding of your fundraising health. For instance, what happens if you have a high donor retention rate but have high losses in the number of donors? What story might that tell?

Simply looking at the percentages isn’t enough; your organization must look at the actual people and amounts that are being retained, lost, etc. A high retention rate of small gifts may be completely wiped out by the loss of one or two major gifts. Diving into the people behind the gifts is a vital part of completing the fitness test itself.

How can I act on the information I learn?

Once you’ve taken the test, you need to lay the information out and connect the dots together. Taking the standard reports we’ve outlined above, your organization will begin to identify holes in your donations strategy and should work to plug them. Just like if you went to the doctor and might be hitting your weight goal but have high cholesterol, your nonprofit needs to look at the full picture and create a plan to identify what to do.

Let’s break out a short overview of what can be done for each of the primary reporting items we identified above. Check to see if you see that there are issues when you run your own report.

Retention – Work on your stewardship program, creating processes to communicate with donors in a clear and meaningful way.

Acquisition – Create outreach events that are designed to introduce your nonprofit to new people in your community, such as having a board member host a party where you highlight your mission to the board member’s network of friends that have been personally invited.

Donor Gains – Ensure that any outreach efforts made, such as the board member event, are followed by solid stewardship procedures with a personal touch by appropriate staff and volunteers.

Average Gift – Review the copy of your appeals and see if they either are suggesting too little or if you provide too many options for donors to give. They’ll gravitate toward the lowest ones if you give them too much time to think about it.

Growth In Giving – Segment your donors into giving levels and try to understand the percentage gains in each level. If you’re seeing significant lag or dips in one particular level (especially the highest) then take time to create a specialized outreach plan for those types of donors.

Lapsed Donors – Check the appeal lists you’re sending out. Are you giving special attention to donors who gave at a certain point when you’re doing your appeal but haven’t yet? Spot check your lists for prominent donors and ensure you haven’t missed something.

The above is just the beginning. There are deeper metrics that the Fundraising Fitness Test can showcase, such as the Pareto Principle (80% of your revenue comes from 20% of your donors) or six-year trends of giving. When running your data through the fitness test, approach it as something that must be acted on and you’ll be on your way to a healthy check up year after year.


Why Donor Retention Is A Game Of Musical Chairs

During many of the presentations I give around North America, I often share research data from the Panel Philanthropy Study regarding the number of charities supported annually and year after year by households in the United States.

Among the many key points of the research study are two sets of data points that every single fundraiser should know about and utilize in their strategy for donor retention:

  1. Dollar Amounts Given By Household Income Level
  2. Number Of Charities Supported Annually By Household Giving Level

The first set of data points revolves around the amount given in dollars annually by each of three household income levels:

The household income levels shown are under $50,000, $50,000 – $99,999 and over $100,000. The study outlines both the average and median giving. Please bear in mind the average can be buoyed upward by extremely large gifts. During our presentations we focus in on the median levels to show just how few dollars there are up for grabs by the over 1.4 million registered charities in the United States.

Notice that the median total amount gifted is $540, $1,000 and $1,850 for the three respective groupings. When any charity analyzes their database to see just how many donors are being retained year after year and multiply that number times some portion of the household giving level can you realize the potential “Lifetime Value” of each household.

This provides a vivid introduction into just how important it is to have a strategy to retain those donors from one year until the next. Only by improving your organization’s donor retention strategy can you obtain your fair share and higher of the household dollars being granted to charitable giving as well as being in position to garner larger gifts and legacy gifts. (Those larger gifts and legacy gifts are most often made after consecutive years of giving to your charity…)

The second set of data points hones in on the number of charities supported annually:

  • Income $50K – 2-3 organizations supported
  • Income $100K – 3-4 organizations supported
  • Income >$100K – 4-5 organizations supported

However, in each income bracket, one of the supported orgs is usually a church (that they attend), and another is most likely a school (that they attended, that their children/grandchildren attend).

The actual number of charities supported annually truly surprises most fundraisers. My guess is that it would horrify most nonprofit board members if they were made aware!

Yes, the number of charities supported annually on the average in the United States is not what anyone of us deeply involved in the nonprofit sector would like to see. With the average donor retention rate being below 50%, in fact closer to 40% in our country we can see just how special year after year donors are!

Digging into the caveats mentioned above provides even more alarming insights. Of the charities supported annually by the various household giving levels, one is usually either their church or some other religious organization, and another is often either their school of some nature. The latter would include a member of the household’s high school or college and/or their children or grandchildren’s schools.

Once those caveats are taken into consideration you can easily see the number of annual giving slots decreases dramatically to either 1 or just 2 or maybe 3 slots for the households above $100,000! (There are often actual gasps when professional fundraisers attending our presentations see this information for the first time.)


Hopefully, the insights and data above provide the impetus for taking a deep dive into your organization’s donor retention strategies. This dive should include evaluating and comparing your donor acknowledgement processes and your donor stewardship processes. As we have outlined in numerous previous blog posts just moving your overall donor retention level up 10% can increase the lifetime value of your donor base by 100% to 150% or more.

Based upon proper strategies for donor stewardship and retention you can win at the game of “musical chairs” being played by all of the charities in our country vying for those extremely valuable year after year annual donors.

Fundraising Stewardship

The 3 Step Crash Course in Winning Back-Lapsed Donors

Nonprofits are constantly facing the problem of annual or recurring donors lapsing into inactivity.

Unfortunately, far too many organizations make the mistake of not distinguishing their lapsed donors from other donor groups.

They’ll send these lapsed donors the same correspondence as their active donors or, even worse, prematurely mark them as inactive and ignore them altogether.

But giving up on your lapsed donors is a huge mistake. Considering the high value of donor retention to nonprofits, why wouldn’t you focus on donors who have consistently given to your organization in the past?

First of all, these donors have already shown their affinity for your organization and that they’re willing to give to your cause.

Secondly, it’s more cost-effective for your organization to win back-lapsed donors than it is to acquire new ones. Because you’ve already built relationships with these donors, your organization can forgo much of the initial stewardship process, which will cut your costs (both money and time-wise) significantly.

So, in the spirit of Fundrasing Effectiveness Project (FEP) and our focus on increasing fundraising results as quickly as possible, I thought it might be appropriate to give a crash course in winning back-lapsed donors.

Step 1: Choose the right donors.

To launch a lapsed donor program, first you have to define exactly who your lapsed donors are.

While the definition will vary from organization to organization, the general consensus is that a lapsed donor is someone who hasn’t made a gift in over a year and has given to your organization at least twice.

This definition will probably apply to a good chunk of your base, so it can be helpful to narrow the requirements of your program even further.

For example, it’s probably not worth the money to focus on donors who have made gifts under $10.

You only want to focus on the donors whose contributions will bring you a return on the resources you spent winning them back.

Step 2: Choose the right channels.

When it comes to winning back your donors, some communication channels will be more appropriate and effective than others.

Lapsed major donor prospects definitely warrant an in-person visit or a phone call, but it’s likely your organization won’t have the resources to approach all of your lapsed donors through these channels.

While email appeals and typed letters might appeal to some, I can’t recommend handwritten letters enough.

Handwritten letters provide a personal touch and show donors that you really took the time and effort to win them back.

Make sure to include a handwritten return envelope and a first class mail stamp, too, in case your lapsed donors want to give again!

Step 3: Be personal and heartfelt.

The very best way to show lapsed donors that your organization cares about them, however, is by personalizing your outreach and making it as sincere as possible.

Always, always address your lapsed donors by their first name. Use any information you have on hand that will help you individualize your outreach. (Bonus tip! This is done much more easily with the help of a nonprofit donor database.)

For example, if you know exactly when and how much a donor has given in the past, you should reference the time since their last contribution and suggest the same gift size in your correspondence.

This lets your lapsed donors know you care about them personally, instead of thinking of them as merely a dollar sign.

But above all: be transparent and genuine. Tell your lapsed donors that you miss them. Compliment their kind and giving nature! Don’t be shy in letting them know just how much you value them and don’t want to lose their contributions.

What strategies for winning back-lapsed donors have worked for your organization in the past? Let me know in the comments!


Confessions of a Fundraiser

Being a fundraiser for over 20 years and living in a community with a professional fundraisers organization not affiliated with AFP International, I thought I was doing a great job keeping up with the trends in the field.  After all, I have an advanced degree, attend professional development workshops and webinars, read books and articles, and, I always make my fundraising goals.

Then about five years ago, a small group of professionals started a local AFP chapter.  Still, I didn’t bite.  I didn’t know much about what AFP had to offer and it seemed expensive compared to the other local non-affiliated organization.

Last year, a colleague asked me to get involved in planning our local AFP National Philanthropy Day conference, which lead me to join the chapter’s board, become a Chamberlain Scholar and attend the International AFP Conference for the first time.
I went early to the AFP conference to attend a workshop on donor retention.

It was at this workshop on donor retention that I learned about AFP’s Fundraising Effectiveness and Growth In Giving Projects and the incredible information gleaned. That proverbial light bulb went off along with a little knot in the pit of my stomach.

While I always make my fundraising targets, have I done everything possible to build a strong, sustainable fundraising program for the organizations I served?  The truth is, I did, based on intuition though and general theories and best practices.  I was lucky.  Still in the back of my mind, could I have done even better had I possessed this new knowledge? I think so.

What I didn’t do as well, however, was educate staff, board members and volunteers based on hard facts and research, on the strategies and resources I was implementing.  Herein lies the problem.  I don’t think I’m so different from a lot of my colleagues.  Particularly when I hear so many colleagues are struggling with getting the right resources to fundraise effectively, or are questioned or even prevented from initiating better fundraising strategies, or unable to get rid of those sacred cow events that don’t produce.

Thanks to the tangible, concrete information gained through the Fundraising Effectiveness and Growth In Giving Projects as well as other research projects, the field of fundraising has evolved and achieved a higher level of sophistication and so have I.  My analytic, strategic planning, and creativity have all sharpened and improved my decision-making.  As a member of AFP, with this research under my belt, I know I am more effective as a fundraiser and as a leader in my nonprofit community.


The 80/20 Rule Is Alive And Well In Fundraising

We have all heard some form of the 80/20 rule as it is mentioned so many times in our daily lives. Some examples heard over the years include:

  • 80% of the crops harvested come from 20% of the farms
  • 80% of sales come from 20% of the sales force
  • 80% of TV is viewed by 20% of the viewing audience