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4 Donor Metrics Every Nonprofit Should Start Tracking Annually

11/04/2024

Data-driven fundraising has many layers, just like the myriad of individuals who support your cause. But we’ve been conditioned to use the same day over and over (think RFM) in our analysis and decision making.

We know there is real growth, success, and relationships to be gained by collecting stronger and more nuanced nuggets of data about the people (and potential audience) in your giving circle. It’s exciting to see that these data layers lead to new discoveries about who, what, where, when, why, and how people engage with your organization.

By expanding the data you collect and combining that with assets like Ai and Machine Learning as part of the VeraData toolbox, we can uncover unique patterns and pioneer more effective fundraising campaigns by incorporating this layered data, which is what takes your antiquated data-driven fundraising to the next level.

In this piece, we’ll share four powerful performance metrics you should start tracking each year that we’ve seen empower other organizations like yours. These metrics supercharge how you segment, highlight areas of donation opportunity, and guide your fundraising campaign strategy.

1. Donor Retention Rate

The donor retention rate measures the percentage of donors who continue to give to your organization year after year. A high retention rate indicates that your donors are very loyal to your organization not only financially but also as brand ambassadors.

On the other hand, a low retention rate can signal a need for improved donor engagement strategies. Modern fundraising approaches like Donor Science™ offer revolutionary opportunities to develop deeper connections with your donors. We use Ai and ML to dissect the underlying factors contributing to that low retention rate so that we can use that intelligence to craft targeted messaging that will resonate and help prompt additional giving.

Another tool to consider putting into place—feedback mechanisms. Annual interactive surveys, donor feedback forms, and invitations to dialogue sessions can provide invaluable insights directly from your donors about why they are or are not donating and offer them a voice that could guide your nonprofit’s strategy.

2. Average Gift Size and Growth Rate

The gift size tells you how much, on average, each donor contributes to your organization every year. The gift growth rate metric, on the other hand, offers a dynamic view of the growth or decline in donation amounts over time.

We look at the average gift size to help us understand your donors’ capacity and willingness to give. It helps us shape your fundraising strategies and set realistic goals. When paired with the gift growth rate, we can identify trends and anticipate future giving patterns. Together, they illuminate the effectiveness of your fundraising strategies and provide a clear indicator of donor satisfaction and engagement levels.

Remember, a higher average gift size isn’t always better. It’s more important to have a consistent and sustainable level of giving from your donors. It’s also vital to understand and take outliers into consideration. Single, large donations or smaller yet numerous text donations can be statistical outliers that artificially inflate or decrease metrics like average gift size. Recognizing and rewarding growth in individual donor contributions can also foster a culture of continued generosity and commitment.

3. Monthly Donor Growth Rate

The monthly donor growth rate measures the increase in the number of people providing recurring donations over the year. It differs from the donor retention rate in that it measures individuals who have opted into recurring, often automated, donations each and every month, while the donor retention rate monitors individuals who have given more than once. Additionally, it’s different from Conversion Rate to Monthly Giving, which we’ll dive into below because of the fundraising strategies behind them. Monthly donor growth can be a part of an acquisition strategy, while Conversion Rate to Monthly Giving is usually a part of an upgrade strategy.

A positive growth rate indicates a healthy sustainer fundraising program. It shows that your efforts to lock in donors are working. A positive growth rate demonstrates that your narrative is compelling, your mission aligns with their values, and your donors feel deeply connected to the cause.

However, a declining growth rate may signal a need for strategy adjustment—that it’s time to pivot and rethink. Rather than viewing a decline as a setback, we see it as an invaluable opportunity to leverage VeraData’s cutting-edge technology and data analytics.

Regularly monitoring recurring, monthly donation growth rate equips you with the agility to respond to changes with precision and creativity. It encourages a culture of continuous improvement and adaptation, essential qualities for navigating the dynamic waters of nonprofit fundraising.

VeraData has masterfully crafted a sustainer model and campaign strategy, shaping the future of fundraising across hundreds of organizations. By leveraging two decades’ worth of data as well as Ai, VeraData boosts sustainer files time and time again.

4. Conversion Rate to Monthly Giving

The conversion rate to monthly giving shows the percentage of one-time donors who become monthly donors. The transition from one-time acts of generosity to a sustained commitment through monthly giving is a journey of trust and belief in your mission—a journey that is captured in the conversion rate to monthly giving. Briefly mentioned above, a key differentiator between Monthly Donor Growth Rate and Conversion Rate is the target audience and fundraising strategy. Conversion Rate factors in existing donors and targets those most eligible to become to a sustainer or monthly donor.

A high conversion rate is a good sign. The average conversion rate from one-time donations to monthly giving typically ranges between 3% to 15%. Celebrate a high conversion rate as a triumph of connection, a testament to the dedicated relationship work with your supporters. It means your outreach is striking the right chord, your engagement strategies are hitting the mark, and your donors feels anchored to your cause.

But a low rate may suggest a need for improvement. We see it as a call for a bold reimagining of your communication, a deep dive into the essence of your audience selection and messaging, or implementing a fresh approach like Donor Science™ for your donor analysis. Could there be a more impactful way to share the stories of lives transformed by your work? Is there a way to deepen the sense of shared purpose with your donors? Is there an audience yet to be reached?

The answer is ‘yes’ to all of those questions.

From identifying and segmenting your prime audience to crafting more personal narratives and exploring newer, more creative forms of recognition and reward, myriad ways exist to stoke the flames of commitment among your supporters. We’ve seen organizations successfully use incentives, exclusive updates on projects made possible by monthly gifts, and even tier systems that celebrate the cumulative impact of sustained giving.

Leveraging Donor Metrics for Impact

By collecting and integrating new metrics into your strategic planning and partnering with VeraData who uses advanced tech like Ai and ML for deeper intelligence, your organization can look forward to not just achieving but exceeding its goals, powered by data-driven decisions and a profound connection with its supporters. The future of nonprofit success lies in harnessing the full potential of donor data, paving the way for a world enriched by thoughtful, impactful contributions.

Remember, data is only as good as how you use it. So, use these metrics to make informed decisions and drive your nonprofit’s mission forward.