By Ally Smith
Donor engagement is vital to nonprofit success. By donating, volunteering, and spreading the word about your organization, donors fuel your nonprofit mission.
As a fundraiser, you need to increase donor engagement, and the only way to do that is by tracking engagement metrics and monitoring your success. This article will show you four metrics for measuring donor engagement and tell you why they’re important for your fundraising team.
Why is Measuring Donor Engagement Important?
Every phone call, donation, and click on your website is a part of your nonprofit’s donor engagement strategy.
Effective donor engagement increases donor retention. Retaining donors is one of the best ways to increase fundraising efficiency because it’s much cheaper than acquiring new donors. In fact, acquiring a new donor costs about ten times more than retaining a donor.
Additionally, nonprofits retain about 52% of their engaged repeat donors. Increasing donor engagement can motivate a donor to give a second gift and keep them donating.
However, before you improve your donor retention, you need to track metrics that tell you the effectiveness of your engagement strategies. These metrics will help you understand how engaged your donor base is and help you identify areas for improvement.
Four Key Donor Engagement Metrics
- RFM Analysis
The RFM analysis model is a method of measuring engagement levels by scoring donor contributions across three dimensions: recency, frequency, and monetary value.
Recency of Donations
The “recency” dimension is the amount of time that’s transpired since a donor’s last gift. First, you’ll need to determine what “recent” is for your organization. Many organizations assign their highest scores to donors who have given within the last six months.
Having too short of a “recent” period would pressure fundraisers to solicit donations too frequently, which would result in lower donation amounts and higher donor turnover.
Frequency of Donations
How often does a donor give? The more often a donor gives is a great indicator of how engaged they are. For example, someone who gives monthly would likely be more engaged than someone who gives sporadically every few years. The highest frequency scores are assigned to your most consistently active donors.
Monetary Value of Donations
How much money is a donor giving? The more a donor contributes to your nonprofit, the higher the monetary score they’ll receive. Similar to how every nonprofit has a different definition of a major gift, every organization will have a different threshold for its monetary scores.
Once you have scored your donors’ contributions across each dimension, you need to combine their scores and consider the results.
For example, if you only look at monetary value, you may think that someone who donates $500 is more engaged than someone giving $20. However, if that person gives $20 every month for a few years, they are likely more engaged. RFM analysis helps you develop a holistic understanding of donor engagement.
To help you create your own, here’s an example of what an RFM analysis scorecard should look like:
Once you’ve developed a scorecard that’s right for your organization, you can score each donor. For example, a donor that’s given in the last six months, given four gifts in a year, and given an average of $150, would receive a score of 5-4-4.
Then, you can group donors with similar scores to create donor segments. This will allow you to tailor your engagement efforts to specific donor groups. For example, you can send more frequent appeals to the donor group’s frequency score that you want to increase.
Additionally, you can observe how the distribution of your segments changes over time to determine if your engagement strategies are working.
- Fundraising Participation Rate
There are many ways to measure donor engagement beyond just tracking donation activity.
For example, donors can participate in campaigns by becoming a fundraiser themselves. This engagement is important to measure because peer-to-peer fundraising is becoming more popular. Facebook fundraising grew by 14% in 2021!
Fundraiser Participation Rate tells you the percentage of donors who fundraised on your behalf by doing things such as being sponsored in a charity run, soliciting door-to-door, or accepting donations as birthday presents.
You can measure this metric using the following equation:
(# of P2P Fundraisers ÷ # of Donors) x 100 = Fundraiser Participation Rate
The higher you can make this percentage, the better. A high fundraising participation rate tells you that your donors are highly engaged because they are willing to take time out of their busy days to grow support for your cause.
- Social Media Metrics
Social media engagement does not always mean donor engagement, just look at Unicef Sweden’s ad calling out “slacktivism”. Very bold!
But, if you are tracking the right social media metrics, they can help you measure donor engagement. We recommend focusing on conversion rates that tell you when social media engagement actually leads to donations.
A great place to start is by tracking how many donations come directly from social media. Luckily, most social media platforms will be able to tell you your conversion rate.
However, you’ll also want to know how many people get to your website’s donation page from a social media post. You can track this using Google Analytics.
To get started, there are lots of helpful Google Analytics resources for monitoring traffic that comes from social media. For example, check out Whole Whale’s video, which gives a great overview of Google Analytics for nonprofits.
- Major Donor Contact Frequency
Measuring contact frequency tracks your touchpoints with a major donor or major donor prospect. Many interactions need to occur between meeting a potential donor and receiving a donation. These donor interactions are a part of donor relationship building and should be tracked to help you understand your progress towards a gift.
You can track this as a metric by determining how many touchpoints you have with a donor in a given time period, such as a year or six months. Then, in your donor database or spreadsheet, track every communication you have with your major donor prospects, whether it’s a phone call or an email blast with a donation form attached.
Not all contact efforts are created equal, so you may want to score communications differently. For example, if you have lunch with a donor, it may be worth five touchpoints, compared to an e-blast worth one.
You can measure this metric using the following equation:
(# of Touchpoints ÷ # of Months) = Major Donor Contact Frequency
While there’s no clear benchmark for Major Donor Contact Frequency, use your most engaged major donors’ scores as targets for success. And as always, don’t forget to use your fundraising common sense; if a donor doesn’t want to be contacted a lot, don’t contact them.
As a fundraiser, you understand the value of building a deep and meaningful relationship with each donor. However, you can only tell how strong a relationship you’ve built is by tracking engagement indicators. Hopefully, these four metrics give you a good place to start!
Ally Smith | Content Writer at KIT
With a passion for nonprofit innovation, Ally has spent her career helping build community capacity and supporting social innovation as a customer success manager turned, youth worker, turned social researcher.
After leaving the tech start-up landscape, she pursued a Master’s in Philanthropy and Nonprofit Leadership and has since supported nonprofits to innovate and grow. A Canadian ex-pat and social entrepreneur based in Edinburgh, she enjoys hiking, baking bread in a panic, and pursuing the full Scottish experience- rain and rugby included!