Stop! Before Changing Strategies Make Sure You Understand Your File and Program Health.

2022 was an incredibly chaotic and uncertain year. We began to think of COVID as “the new normal.” There was uncertainty in the stock market, inflation, the Ukraine war, and talks of a recession. And, of course, the volatility of direct mail, which rose in costs, dramatically extended timelines, and forced us to find new ideas as materials were scarce — if they were even available. (I’m looking at you labels!)

Any one of these things could have impacted our fundraising efforts. All of them together, meant fundraising was incredibly difficult. Some organizations fared well. Many did not, as they saw their results and revenue drop back to 2019 levels after the fundraising boom of 2020 and 2021.

Before you add new strategies — or keep the ones you have — make sure that you understand your file health and the drivers behind your 2022 performance. Uncovering these fundamental metrics will help you prioritize your efforts and make sure you’re putting your resources in the right place.

1. Donor churn. Did you bring in enough new donors to cover those lost by attrition? If your organization is in a growth mindset, you need to see if you acquired enough new donors to both cover donor losses and meet your file size growth goals.
2. Average gift. Or, rather, the median, mode, and range of your contributions. Average (or mean) can be incredibly misleading. One or two large outliers can distort your average — and change findings, next steps, and strategies. An increase of low-dollar gifts could lower your average, but there may be no impact on the number of higher-dollar gifts you received. Many programs are evaluated on average gift; you need to be sure that it is telling you the right information.
3. First-year retention. Always a perennial metric, you need to understand if you’re bringing on quality donors or just acquiring one-time only donors. A strong acquisition program that is identifying donors who share your values will always result in lower attrition rates. Confident about your new donor quality but still seeing low retention rates? It’s time to evaluate your first-year donor journey.
4. Multi-year retention. Once you’ve secured the second gift, are you losing donors because you’re not asking enough? Or are you asking too much? Many organizations move donors into fundraising programs that are driven by organizational priorities and messaging, as opposed to where the donor is on their journey within the organization.
5. Sustainer program growth. Nearly all organizations know that growing the sustainer program is one of the best ways to increase retention and long-term value. If you didn’t see growth here or realized high attrition rates, this should be a priority strategy.
6. For years, our industry has been able to raise more money by upgrading donors: larger gifts from active donors often hid underlying issues like soft donor acquisition and lower retention.
7. Email deliverability. Poor email deliverability continues to plague our industry, and most organizations do not have a way to measure how many emails are reaching a supporter’s inbox instead of being sent to spam (or even worse . . . missing).
8. Donation page conversion rates. When someone reaches your donation page, how many people are making a gift? We suggest taking it a step further and looking at conversion rates by channel. Over this last year, we’ve seen a significant drop in conversion rates, especially from email. Are you bucking the trend and seeing high conversion rates from your digital advertising? Then it might be time to expand that budget.
9. Long-term value. Donor acquisition is generally a loss leader — in any channel. But knowing how quickly you will recoup your investment (particularly by channel) is the best way to determine budget allocation and create a business case for increased acquisition investment.
10. Impact of direct mail on digital efforts. By now, doing a matchback of online gifts to your direct mail donors should be standard operating procedure. Direct mail has been proven to increase overall digital outreach — and quantifying this is critical to illustrating the need for a cohesive, multi-channel program. (We’ve seen $0.16–$0.86 in digital revenue for every direct mail acquisition piece mailed.)
11. Analyzing digital revenue attributed to direct mail. (Basically, #9 — but in reverse.) No one can say that 100% of the digital revenue matched to direct mail is the result of direct mail. However, analyzing your direct mail program (especially acquisition) and adding in a percentage of the matched digital revenue may change your calculation on the importance of that program. Take it a step further and look at results by package and list. We’ve seen list plans change when evaluating list performance with the digital matchback included.
12. Impact of digital efforts on all revenue streams. Just as direct mail can impact other income streams, your digital efforts play a crucial role in lifting all your online revenue and other revenue lines. We’ve seen that email can account for 20% of general web revenue. Depending on your digital advertising strategy, it will positively impact general web, email, and direct mail revenue as well.

There are hundreds of other metrics that are useful in evaluating your program. Analysis can also lead us down a lot of rabbit holes. We’ve given you a start on what to review before creating — or rebuilding — your 2023 plans.

Need help with these KPIs? Give us a ring and we can share the best ways to calculate these metrics for your file or provide the extra resources your team needs to make sure your 2023 is on track for success!