Pursuant Insights Releases Donor Loyalty Benchmarking Study
Sixty-two percent (62%) of donors make only one gift in their lifetime, a new benchmarking study finds.
For years, the nonprofit industry has relied on benchmarking studies to understand how specific channels perform (mail, digital, etc.) and to identify gaps in an organization’s fundraising effectiveness. However, there’s never been a study to establish what donor loyalty means and how it measures across channels, sources, and giving levels—until now.
Pursuant Insights, the analytics division of fundraising agency Pursuant, has released its inaugural Donor Loyalty Benchmarking Study to equip philanthropy leaders with important insights and takeaways around increasing the overall loyalty, commitment, and generosity of today’s donors.
The study analyzed over 10 years of individual giving data from 21 nonprofit organizations across multiple sectors and provides a holistic view into donor loyalty by establishing industry benchmarks around lifetime value and retention metrics.
A few key insights and takeaways include:
- A majority of donors “transact” with participating organizations — 62% of donors make only one gift in their lifetime.
As you consider what donor loyalty looks like— and the connection, donors have over their lifetime—this is an important number to consider. Think about the various ways your organization can improve this number and be more intentional about cultivating that second gift.
- The average retention rate is 34% year-over-year, but overall coverage ratio for participating organizations was healthy because of the number of new donors that came in 2018.
In today’s fundraising landscape where nonprofits are experiencing an overall decline in the number of donors, this is a cause for concern. Relying too heavily on acquisition tactics to make up for poor retention rates could eventually create unhealthy, unsustainable fundraising programs that put our organizations at risk.
- The donors’ overall lifetime value reveals tremendous untapped opportunity. While the average revenue per donor currently benchmarks at $648, the average donor lifetime value was discovered to be $1,068.
If this is the lifetime value nonprofits can expect to generate for each supporter, then it’s important to consider what your organization can do to increase this number. Doing so will help put your organization on a path to continuous growth and improvement.
In addition to establishing benchmarks related to donor loyalty across the philanthropic sector, the study also provides detailed insights into subsectors such as arts & culture, faith-based organizations, healthcare foundations, multi-affiliate organizations, and higher education institutions.
The study included 21 organizations, 20 million donors and $13 billion in revenue. Some of their characteristics included:
- Half the organizations have increasing budgets while the other half are flat or decreasing.
- The majority of organizations spend less than 10% on acquisition. Spending on retention is more varied with the bulk spending between 10%–50%.
- About half of the organizations indicated having a mid-level program and an integrated direct response program, but indicated that both were new or in early stages.
- Most organizations say they measure success through revenue regardless of channel but very few are looking at attribution by channel.
Because of the relatively small number of participating organizations, the findings from this study are not meant to be conclusive, but are intended to be used to create directional hypotheses for testing against larger data sets or in the market.
To learn more, including detailed insights by sector, and to read the full study, please visit Pursuant.com.