The BIG 5 in fundraising performance metrics

By Reinier Spruit
On May 8, 2014 At 2:00 pm

Category : acquisition, Best posts Q2 2014, database, Latest posts, loyalty, research, retention

Responses : 10 Comments

You might love it. You might hate it. But if you respect your donors and your work as a fundraiser you are likely to spend a few hours per week looking at reports. Those reports will tell you all sorts of things about the behavior of your donors, a.k.a. your fundraising results. But, in general, what are the most important fundraising performance metrics you should monitor? Keep reading and get your free download at the end of this post.

What I’m about to share seems somewhat simple perhaps. This is in fact not simple; these are the basics! Unfortunately too many fundraisers out there still don’t respect the basics.

We’re in the relationship building business, so we need to measure and register every response.

Ironically, we must quantify the relations with our donors, so we can improve the quality of the contact we have with them.

I am a strong believer of prioritization being the key to successful fundraising. There are a ton of metrics we can track, and should track, like email open rates, sign-up rates per hour, one-off cash donations and appeal response rates. But there are 5 that are simply much more important. Mainly because they are the building blocks for making sensible decisions for the longer term. I call them the Big Five.

The Big Five are Volume, Expenditure, Income, Retention and Return on Investment. Let me explain.


The “Big Five” animals are the lion, African elephant, Cape buffalo, leopard, and rhinoceros. In Africa the term big five game (sometimes quoted as “Big Five”) was coined by big-game hunters and refers to the five most difficult animals in Africa to hunt on foot and the degree of danger involved, rather than their size. Subsequently the term was adopted by safari tour operators for marketing purposes. (source: Wikipedia).

Acquisition is the life blood of your fundraising program, but Retention is the heart of the operation. Both areas can’t life without the other. Retention starts at the point of acquisition. Retention provides the resources for more acquisition. And more importantly, if done well, retention lessens the pressure to do massive acquisition. And because acquisition is more costly and less profitable than retention   w-e    m-u-s-t       h-a-v-e    a longer term perspective. In our quest for the most important performance metrics we must include both sides of the fundraising coin.

Let me also add that the “12M ROI” explained below is not to disregard Lifetime Value (LTV). In fact, it’s the very same LTV metric expressed in a different language! LTV talks about value per recruited donor, where ROI talks about value per invested euro. As long as we project these metrics in the future they’re fighting the same fight and have the same purpose.

1. Volume
How many new donors do you sign-up or recruit? The continuous risk of acquisition is always that we look solely at volume. Don’t! The number of donors means nothing without additional information of how much income they generate, what resources are involved to get (and keep) them on board and how long they will stay with you. However, looking at volume is definitely not useless because it’s a very strong influencer of the size of your program.

2. Expenditure: cost per sign-up
Your total acquisition expenditure divided by number of new sign-ups. How much do you need to spend on average per new sign-up. I deliberately say sign-up, and not yet donor, because anything can happen from the point of sign-up to the point when the first donation is deposited in your bank account.

3. Income: average gift per donor
What is the average donation per specified period? The higher the better, I would say in general. Because the first donation sets the tone. Normally the follow-up donations will also be high. Research shows that the initial gift is one of the most important variables that influence ROI (and Lifetime Value).

4a. Retention: pre-debit attrition rate
How many donors never make a first donation? This is what I meant before. This percentage of recruits sign up to become a donor but never make the first donation (for whatever reason).

4b. Retention: post-debit 1st year retention rate
How many donors stay in the first year? Every month people cancel their donation. Every month that percentage declines. It’s a sliding curve. Why do we look at the first year? Simple: year one contains the biggest exodus of donors, and the 12 month point is a good indicator for longer term retention rates. But obviously “12 months”, can also be any other point in time.

5. Return on Investment after 12 months
I like to call this one “12M ROI”. This is not your ordinary ROI calculation. Yes, it looks at your standard acquisition expenditure (2), but then it looks at your projected income in the 12 months after recruitment (3+4a+4b). So for donors recruited in January that means January-December. But for donors recruited in February that means February-January next year. And for March donors from March-February next year. So for a campaign that runs throughout the year you will need 24 months to project the calculation. This way we exclude possible seasonality or campaign peaks. And obviously, most importantly, we take all attrition and retention rates into account.

Perhaps best to illustrate with a fictive example.

Let’s say we recruit 1,200 new sign-ups throughout the year in 2014 via your Direct Dialogue campaign. The average cost per sign-up is 80 euro, total 96,000 euro (1,200 x 80). The average gift is 7.50 euro per month, so 90 euro per year. Pre-debit attrition is 5%. The Post-debit Retention after 12 months is 70%. The 12M income is shown below in the green shaded cells, which is, as I’ve tried to explain above, spread out over 24 months. The total is 83,021 euro.

12m income

The 12M ROI is therefore 0.86, which means that for every 1 euro we have spent, we will get 0.86 euro in return (83,021 / 96,000 = 0.86) in the 12 months after each batch of recruitment (Jan-Dec).

I understand this may sound like Abracadabra, so I’ve prepared a simple excel sheet for you guys with the example included: 

[FREE DOWNLOAD: 12 month ROI calculation].

(Note: in the excel sheet, instead of going for an annual variable, you can also input monthly variables. After all, you want to improve your metrics throughout the year, right? If you change the volume throughout the year, the ROI in the calendar year will change, but the 12M ROI will not. The 12M ROI will only change if you change the Income, Expenditure or Retention variables.)

Do email me or comment below if you have questions.

You will need to repeat this exercise for every recruitment channel. By the end you will know which channel is most effective in the first 12 months. The logic of the model can also be expanded beyond 12 months of course. But more advanced features should then be added as well, like upgrade or reactivation campaigns, and ongoing cost for donor communication and care. But this exercise will give you a very good starting point.

Next step is to combine this calculated knowledge with your volume (the number of donors coming from that channel). A channel can perhaps have an incredibly high 12M ROI, but if the volume is incredibly low, it may not be the solution in your search for enough funds.

I hope The Big 5 can help you focus on Acquisition & Retention. I hope you allocate your resources in the best possible way.

By the way, did you know there is a scary comparison with the real Big 5?

The buffalo represents our acquisition volume. Extinction-wise they are labeled in the category ‘least concern‘. Indeed, fundraising wise, volume is often considered first.The lion and the elephant are ‘vulnerable‘. They represent the income and cost. The leopard is ‘near threatened‘. Retention is too often overlooked; quantity too often wins from quality. And finally, the black rhinoceros, your 12M ROI, is ‘critically endangered‘.

Let’s just hope we’re not too late. Save the rhino. Save the 12M ROI.

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Reinier Spruit (36 blogs on 101fundraising)

Reinier is in love with fundraising since 2001. Ever since he's trying to improve his own fundraising skills and those of others. He founded 101fundraising back in 2010. At the moment working with amazing clients through his one-man fundraising consultancy. Loves running and baseball.

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  1. Great stuff and even though I’m not into hunting I shoot for these all the time. I would add a 5b: 5 year ROI

     — Reply
    • Thanks Chris, and I agree on the hunting part! And you are right, a longer term ROI calculation is also very valuable. I do think however that the 12M ROI in many cases will steer you in the same direction.

       — Reply
  2. Great! This is a really accessible explanation of the metrics that should underpin EVERY regular giving programme. And with a free XL tool too – what’s not to like?!
    I’d just like to highlight 2 points here:
    1. Pre-debit attrition – this is a really important figure which often represents one of the best opportunities for a quick improvement in 12M ROI. Review your processes carefully here, especially in light of new technology, etc.
    2. Monthly attrition variables are much more accurate than annual ones. You lose most regular givers in the early months, so avoid using a flat rate or applying a fixed value to the total income.

    Great work. Thanks, Reinier

     — Reply
    • Thanks David. You are making a good point which I actually haven’t mentioned, that this model has a focus on regular giving programmes.

      I agree with both your points. Improving payment processes and new (e.g. tablet) technology can help a great deal in the Pre-Debit Attrition area. The post-debit retention curve in any program, in any country around the world, shows that you lose most in the early months, so a breakdown in months is indeed the best way to go. In the excel tool you can break it down on that monthly level.


       — Reply
  3. HI Reinier, this is excellent!! There’s really not much out there for monthly giving calculations (I’ve had to prepare my own over the years) so this is great stuff!
    cheers, Erica

     — Reply
    • Thanks Erica!

      The excel download is a fairly simple one. Like I mentioned in my post, you could make it much more detailed if you add other features, more channels, but also other payment frequencies (and retention rates), and additional follow up campaigns who also generate income and cost that could be allocated per acquisition channel, etc. etc.

      Nirvana for excel fanatics 😉

       — Reply
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  5. Hey Reinier, great post! This is where the communication-oriented ‘marketeer’ is separated from the data-loving marketeer.

    Just a note between you and me :-). Those who understand your sheet probably already created one themselves. Those who haven’t created one themselves will probably not understand (nor use it). But there’s always something to learn, right?

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  6. LOVE the KPI !! so many miss this critical evaluation step. Kudos for calling it out.

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  7. Hi Reiner,

    Bit late on this convo.

    How do bank rejects play a part in the above? And more importantly how do you see the best way that is measured?


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