11
Donor Lifetime Value (LTV): how much
money, calculated over all donors and
donations, a donor will give to your
organization from the rst donation to the last
This must-know metric is crucial to your development budget, as it
determines how much money you should invest to acquire a new donor
or keep a donor for the long term.
This is how it works using our example gures and increasing retention
rate from 40 percent to 60 percent (which reduces the attrition rate
from 60% to 40%):
→ Lifetime of donor = 1÷0.4 = 2.5 years
→ Lifetime value = 2.5 x $500 = $1,250.00
The impact of your donor retention rate is dicult to ignore. For
example, if you can increase your retention rate by just 20 percent,
your donor LTV increases by 50 percent. Although that seems like quite
a feat, a monthly giving program can help you achieve even greater
retention quite easily.
CALCULATE YOUR GIFT RETENTION RATE
→ The higher your retention rate, the greater the donor LTV
Lifetime
of Donor
Lifetime
Value
1 Your Retention Rate
Lifetime of Donor $500