Although every donor is valuable, not all donor value is created equal. It’s time to challenge some long-held assumptions about donor value. Here we unravel three recurring myths and reveal truths that can help you focus on the donors who genuinely make a difference.
For years, fundraisers have viewed multichannel donors as fundraising gold, and the logic seems sound: More ways to give must equal more value.
At first glance, the lifetime value (LTV) of multichannel donors looks staggering. Data shows direct-mail–only donors with an LTV of $95, online-only donors at $238, and multichannel donors at $840.
But here’s the catch: Multichannel donors are incredibly rare. Only 2% of offline donors have ever made an online gift, and just 11% of online donors have ever given offline. These exceptional donors are also, by definition, supporters who have given two or more gifts. This means that frequency, not channel, drives their value. When we control for frequency and initial gift size, the LTV differences between single and multichannel donors virtually disappears.
Focusing your efforts on creating multichannel donors may not deliver the ROI you expect. Instead, prioritize facilitating giving in a donor’s preferred channel and making their chosen journey as frictionless as possible.
Growth at any cost can be tempting, especially when acquisition is tough and donor files are shrinking. Nonprofits may hope that recruiting lots of low-value donors will eventually pay off with upgrades and transformational gifts.
A donor’s initial gift amount, however, is astonishingly predictive of long-term value. More than half of donors come in with gifts under $25, yet very few ever upgrade to higher giving levels. For example, only about one-half of 1% of donors who start with gifts of $10 to $25 ever make a gift of more than $250. Although you may occasionally hear of the unicorn donor who gives $10 for 20 years and then drops a $10,000 check, these stories are statistically insignificant.
The takeaway? Proactively reduce the volume of low-value donors you acquire. Use modeling to find rare diamonds in the rough, but don’t build strategies around wishful thinking. Accept that most low-dollar donors will remain low-dollar donors, and conserve your resources for strategies that move the needle.
Improving donor value: Should you focus on upgrading gift amounts, or is there a better path?
When a donor upgrades the gift amount but reduces frequency, their LTV actually decreases. Conversely, if a donor downgrades the gift amount but increases frequency, their LTV goes up. The data is clear: Getting donors into a repeat giving habit — regardless of the amount — is more effective for growing value than chasing upgrades.
This insight has big implications for strategy. Forget the myth that bigger gifts are the holy grail. Instead, build programs that encourage repeat giving, nurture loyalty, and reduce friction. Sustainer programs are always worthwhile.
The numbers don’t lie: Focus on what’s true about donor behavior, not what you wish were true. These approaches should be part of your next fundraising strategy: