You’re determined to Go Big with your cause, but there’s a challenge: limited resources. Where should you focus your precious fundraising dollars?
According to renowned fundraiser Roger Craver, here are the probabilities:
- 60-70% chance of securing additional gifts from existing donors.
- 20-40% chance of re-engaging recently lapsed donors.
- Less than 2% chance of converting a new prospect into a donor.
Given this, the question becomes, Where should you invest?
It might seem obvious—focus on existing donors with the highest likelihood of giving again. But while retention is critical, if you solely rely on current donors, your organization will likely shrink over time due to natural attrition. Some donors will inevitably stop giving due to changing circumstances.
On the other hand, if you invest all your resources into new donor acquisition, the cost can be overwhelming, especially when only 2% of prospects typically respond.
The Power of Donor Lifetime Value (LTV)
The real key is understanding your Donor Lifetime Value (LTV). This metric helps you balance your investment between acquisition and retention, showing you how much a donor is worth over their entire relationship with your organization—not just their first gift.
LTV transforms your approach. For example, let’s say a donor initially gives $100, but over the course of several years, they continue to give, ultimately contributing $1,000. Suddenly, the investment in acquiring that donor looks a lot better.
How to Apply LTV to Fundraising Strategy
Consider this: Would you be willing to spend $100 to acquire a donor who might contribute $1,000 over the next 10 years? Understanding your Donor Lifetime Value gives you the confidence to invest strategically in acquisition while retaining valuable existing donors.
The path forward is a balance—acquiring new donors to grow, while keeping your current supporters engaged and loyal.
So, do you know your organization’s LTV? If not, it’s time to calculate it. Once you do, you’ll have a powerful tool to make smarter decisions about where to invest your fundraising dollars.
Ready to Go Big?
Knowing your Donor Lifetime Value will empower you to allocate resources wisely, maximize your fundraising potential, and truly Go Big with your mission.
