4 Takeaways from the Q4 2017 Fundraising Effectiveness Project Report

I have been proud to be a part of the Fundraising Effectiveness Project every since its inception more than a decade ago. In case you are not familiar with FEP, a little background might be in order to help you realize just how important the four comparison metrics noted below are.

FEP began at the urging of the Urban Institute in order to provide a much more accurate picture of all of the key drivers of philanthropy in America. I assisted in recruiting most of the early technology vendors who provide the ability to store and process donations for registered nonprofits to share the anonymous transaction summaries. This sharing became a nationwide database of extremely useful information that becomes even more comprehensive each year.

This database now encompasses 7,749,293 donors and over 7.6 billion dollars!

4th Quarter 2017 Results

The most recent edition was just released for public consumption. The complete quarterly report can be found here.

I urge you to peruse the entire report, but as a prelude to that here are four key metrics you can compare with your organization’s results.  

1. Overall Donor Retention Rate of 46.3%

This is the bellwether benchmark for most fundraising efforts since it ultimately illustrates how well your team is building relationships over time with donors. Even though the metric above means the average nonprofit engaged in fundraising LOSES more donors than they RETAIN each year, it is a 1.5% improvement over last year!

Comparing your results each quarter to the national average is a superb way to help your team achieve superior results. We have seen many of our customers achieve donor retention rates of 70% or higher.

2. New Donor Retention Rate of 31.8%

The only way to truly improve your organization’s overall donor retention rate is to make sure new donors are retained!   

Once a new donor becomes a repeat donor their retention rate will double and become the core foundation of your fundraising results year after year. If your charity can come out of the gate with a new donor retention rate above 31.8% there is a strong chance your overall rate will improve over the new few years.

3. Major Donor Revenue is Up 4.2%

Major donors in the FEP report are those giving $1,000 and up.  

Obviously, this group has the largest impact on your fundraising results year after year!

If you improve the results from this key group by 4.2% over the last 12 months you have enlarged their impact and set the stage for the future. Using the $1,000 minimum as a segmentation marker for your communication and relationship building efforts can allow the extra attention this segment should merit.

4. Recapture Rate Dropped Slightly to 5.06%

This metric represents the percentage of previously lapsed donors who have made a gift in the last 12 months. Although this metric is down slightly from 5.34% nationally — perhaps illustrating that not enough attention is paid in reaching back out to this group — it is still a key metric to compare to.

Every lapsed donor recaptured can be just as vital as retaining new donors because once again their retention rate going forward is usually quite higher than your overall donor retention rate, thus raising the benchmark metric!

Summary

Now you know the most recent quarter’s national average of four extremely useful fundraising metrics.

Just the mere fact that your organization is embarking upon comparing itself to these metrics will raise the awareness of them. Perhaps, it will be the first time you have ever compiled and shared such metrics with your team and your board. Even if it is, and you fall short of the national averages, take heart as improvement will most likely follow for one or all four of these.

The old adage of what gets measured gets improved could be just what your fundraising efforts and results needed!

If you did compare your results to the four metrics above please let me know how you did in the comment area. I would love offer you a virtual high five!