By Alan Sharpe, CFRE
How long do most of your donors contribute to your organization before they walk away? One year? Five? Ten? You should know.
Direct mail fundraising, like all effective fundraising, is about raising friends rather than raising funds. Raising a friend is always more important in the long term (the only term worth considering in fundraising) than raising a dollar. And losing a donor is always worse than losing a dollar.
Which means you must pay as much attention to your donor numbers as you do to your donation numbers. Response rate, average gift and cost-to-raise-a-dollar are donation numbers. They tell you how you are doing as far as funds are concerned. But donor attrition rate, renewal rate and average tenure are donor numbers. They tell you how well you are doing as far as your friendships are concerned.
Average donor tenure is a vital number to watch. Simply put, your average donor tenure is the length of time, measured in years or months, that your average donor gives to your organization before stopping. The for-profit world watches this number. You should, too.
Learn from the for-profit world
A lady at my church described to me her work as an insurance sales agent. She explained that most agents make a commission when they sell an insurance policy and make another commission when their customer renews that policy, usually a year later. “Clients, on average, buy a policy and renew it six times,” she said, “which means one sale delivers seven years of residual income.”
This lady knows her average tenure. Most of her customers stay with her firm for seven years and then go elsewhere. What about your not-for-profit organization? How long do most of your donors stay with you before going elsewhere? Find out today. And watch that number every year.
Naturally, you want to attract donors who stay with you for a lifetime. For many organizations, the lifetime value of a donor is about five years. That’s not a very large number. But at least you can start improving it once you know what it is.
You are in trouble if your donor base is shrinking each year. You are also in danger if most of the donors you acquire give you one gift and never give again. But remember that average donor tenure is just one button on your calculator. You also need to watch how much your donors give each year. Some may stay with you for decades but contribute little. Others may stay with you for a few years but donate enough to build a new wing on your facility.
You’d be disappointed if you lost all the friends you made each year, or if they hung around but showed no sustained interest in you. So measure and watch your average donor tenure. Then take whatever remedial action you think is necessary to keep your friendships with your donors healthy—and lengthy.
If you need help boosting your average donor tenure using direct mail, give us a call at 1 877 742-7732.
You might also be interested in…
 Handbook Number 16Direct Mail Fundraising Arithmetic Demystified. Master 14 common formulas that help you measure—and improve—your DM fundraising results. |
 Handbook Number 17How to Convert Your Once-Only Direct Mail Donors into Repeat Givers. Proven direct mail fundraising techniques for renewing your new members and first-time donors—year after year. |
 Breakthrough Fundraising Letters.How to write direct mail donation request appeals that attract more donors, raise more money, and build stronger relationships. Available in paperback and as an e-book. |
