And the Single Most Important Fundraising Metric Is…

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Being part of the leadership group for the Fundraising Effectiveness Project had led to many behind-the-scenes email conversations regarding vital topics to the profession of professional fundraising.

The participants range from long term veterans of front line fundraising to top notch consultants to experienced technology providers to highly-regarded research professionals.

Recently, we were debating one simple question: can there be a single most important metric for those involved in fundraising to focus on for long-term success?

As you might guess, the statistical experts were quick to point out a leading metric or two, which lead to the highest outcomes from the extremely large number of databases they routinely work with.

The top metric was this:

Retention Rate for $1,000+ Donors

Why?

This group of $1,000 and up donors literally provides an average of 88% of the revenue for the charity for any year measured in the study! Therefore, keeping this group of donors happy with a high retention rate could positively impact up to 88% of each year’s revenue.

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Seems like a no-brainer, right?

Several others in the email chain chimed in to add some superb color and background to just how do those $1,000 & up donors become just that.

Looking into the Past a Bit Might Shed Light

All of the years of real world fundraising experience provided comments, which boiled down to this insightful question:

Did all of those current $1,00+ donors start at that fairly lofty level?

The answer to that is more times than not is “no.”

The wise fundraisers and consultants then discussed ever so adroitly how today’s $1,000+ donor came in through some sort of donor acquisition method and most likely was giving at a lower level before upgrading to the present level.

Therefore the acquisition strategies should be considered to replace donors of all levels, who even if stewarded by the finest most proven means will eventually fall off even if it is due to death.

In addition, the stewardship and upgrade strategies must be considered because without them the number of high-level donor ranks would have never been achieved in the first place!

Summary

I was reminded of the famous New York newspaper article “Yes, Virginia There is a Santa Claus” when I was perusing each of those wonderfully-crafted replies to the question of whether there is one important fundraising metric that rises above all others.

The reason being that, yes, if taken in one instant of time you could easily prove via math or statistics, that the retention rate of $1,000+ donors has the largest impact on the total dollars raised in any one year. However, like the newspaper reporter’s exquisite reply to little Virginia, there is so much more to the story than just the mere seeing or not seeing of Santa Claus on any given December 24th.

I for one will have to agree with the newspaper reporter, and say there is so much more to achieving successful fundraising results year after year than a single metric!  I would also hasten to add more profound respect for those front line fundraising professionals and consultants who are making such results happen year after year.

Do you think there’s a metric more important? Set me straight if you can in the comments below!

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Jay Love

Jay Love

Co-Founder & Chief Relationship Officer at Bloomerang
A 30+ veteran of the nonprofit software industry, Jay Love co-founded Bloomerang in 2012. He currently serves on the board of the Center on Philanthropy at Indiana University and is the past AFP Ethics Committee Chairman.
Jay Love
By |2017-06-10T18:17:48-04:00August 24th, 2016|Donor Retention, Fundraising|

One Comment

  1. Mark Kordic September 16, 2016 at 1:21 pm - Reply

    Thanks for the valuable post Jay. I appreciate your decades of investment in providing actionable tools for Christian ministry leaders. Our team has discovered the value of a Legacy Team or Ambassador Society at the $1000 level and crafted strategies to discover prospects and reward them for being part of this foundational team for ministries. One retention idea involves personalizing affirmation responses when Legacy Team members engage in some part of the ministry or on their annual anniversary dates of involvement. Keep Looking Up friend. Your service is so valuable and you are impacting millions with your tools. My .02.

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