If you haven’t already, check out mydonorvalue.com, our lifetime donor value calculator. In four simple steps, this online tool will show you the average value of your donors for your nonprofit organization in terms of donations.
Before you plunge in, you will need to gather several statistics to plug into the calculator to determine the value of your donors. They are:
This is the average amount a donor gives in one donation. Let’s say you have five donors. Their annual donations are:
Donor 1: $50
Donor 2: $100 twice a year
Donor 3 $25
Donor 4. $75 twice a year
Donor 5. $30.
To calculate the average single donation, add all donations ($455) and divide by 7 (the number of gifts made). The average single donation is $65.
This is the average number of gifts donors make each year. To calculate frequency, add the number of times your donors make a gift each year and divide by the number of donors. We’ll use an example of 5 donors again. Donors 1, 2 and 4 give once a year; Donor 3 gives 5 times a year and Donor 5 gives twice a year. The total of 10 gifts is divided by 5 donors. 2 is the average frequency.
This does not mean how long your donor lives, but rather how long a donor gives to your organization. The industry average is 2.5 years, but this can be adjusted based on your donor history.
This is the percentage of donors that continue to financially support your organization each year. The industry average is 43 percent. If you know your organization’s donor retention rate, you can replace the industry average.
This number is a calculation of what you spend to acquire a new donor. Let’s say your recent fund-raising letter, which cost $7,500 to write, design and mail, resulted in 100 new donors. Divide the cost of the letter by the number of new donors. The cost of acquiring a new donor was $75.
The average value of your donors would be $245.15.
Go ahead and give it a try for your organization. Happy calculating!
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