The Value of New Donor AcquisitionAn analysis of more than 35,000 donors over a 20-year period
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Tomorrow’s capital campaigns demand new donors today. While major giving totals are up to record levels, donor participation has declined for years. In fact, every year the average institution has to replace 6,300 donors who do not renew.
Given the expense of donor acquisition, however, many institutions are questioning if it is worth the cost. A new analysis of 35,000 donors shows that the cumulative gains from donor acquisition are significant, with substantial gains in just the first five years.
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The cumulative results: Growth from $3 million to $64 million in 20 years
RNL researchers analyzed the giving totals of 35,000 donors over a 20-year period, starting with donors who first gave in 1995. Figure 1 shows the cumulative results at five-year intervals for the entire group.
Notice that these donors started small, with a median first gift of $100, but built up to a large cumulative total over time. These results illustrate the compounded benefit of cultivating new donors.
The return on new donors is nearly 20x over 20 years
There are many factors that go into calculating the long-term value of new donors, but our research of industry trends shows that institutions realize substantial cumulative gains for new donors.
Figure 2 below shows the estimated cumulative dollars raised over a 20-year period by acquiring 500-5,000 new donors. Notice that even at five years, the cumulative amount increases by four times over the initial year. While many of the new donors dropped off, those that continued in their giving ramped up and provided incredible return to the institutions.
Ruffalo Noel Levitz provides a customized Value of a New Donor Calculator that takes an institution’s existing data to show: