Learn more about analytics and research best practices, as well as real world examples and solutions for nonprofits.

RECENT POSTS

Mar 28, 2017

Net Dollars Not Donors Part 2

This may sound heretical, but counting donors isn’t as important as counting dollars.

Here’s why: donors are not of equal value.

For far too long in fundraising, there has been this assumption that “more donors are better.”

This would be true if (and only if) all donors have equal value. But they don’t.

I think I know we got here. Once upon a time an analyst figured a donor’s long-term value. Let’s say that value was $225.

Then the DD thought, “Hey, all I need is more new donors. The best way to get more new donors is to lower my acquisition ask string.”

Then 5-years later, the analyst recalculates the LTV and finds it’s only $100.

The DD is angry with the analyst. They just spent $100 acquiring these donors. So the net value after 5-years is $0. “You said each donor was worth $225!”

You know how the what happened. LTV Is tied to first gift amount. Lower the ask, you lower the LTV.

Yet still, I talk with Development Directors who think 1,000 donors with an AGS between $10-24.99 are better than 10 donors with an AGS of $25-49.99. But when you take both acquisition and cultivation costs into the equation, as the table below shows, that’s just not true.

Acquiring 1,000 donors with an AGS between $10-24.99 will yield a negative net revenue of $24,000 after 5-years. Whereas just 10 donors with an AGS of $25-49.99 will yield $490 in positive net revenue.

If you want to change the direction of your fundraising programs, you first must change what you are measuring.

Right Tools for the Right Job

Goodness gracious. Are you serious? Apparently in UK, COVID19 cases were under reported due to an Excel limitation on the number of cases in a database. Lives are at stake people! Use the right tools of the trade. And even when lives are not at stake, use the right...

read more

Fall Forecast 2020

I’ll start with the obvious: No one knows how this fall’s fundraising campaigns will do. We are at in a turbulent time. Global pandemic. Rising unemployment. Stimulus checks. Divisive election. World powers butting heads. Us analyst rely heavily on past data to give...

read more

The People Behind Nonprofits: Part Three

Interested in pursuing a career in nonprofit operations management? Here’s what experts in the field think you should know: It’s not enough to just be passionate about the cause. The nonprofit sector also needs business-minded people who excel at their jobs and are...

read more

ARCHIVES

© 2020 Analytical Ones