From the Desk of: Steve Elliott

What is the most important metric for your donor development program?

Here are a few metrics that may have come to mind:

• Demographics of the database
• Average gift per donor
• Cost per donor acquired
• Attrition rate
• Program costs percentage
• Average number of gifts per year
• Percentage of recurring donors
• Percentage of major donors
• How many people it takes to send out an email or make a donation page

The correct answer is...

None of the above.

Actually, some of the above!

The most important metric for your donor development program is one you may not know right now but by the time you finish this, you'll be able to calculate. 

So what is it?

Drumroll please...

Here's the metric you need to know.... today....

Average Lifetime Value (LTV) of your donors.

All your decisions should be made with your LTV in sight.

• How healthy is your database? Look at your LTV trend.
• How much should you spend for a new donor? Can't even begin to decide without knowing your LTV.
• How about investing in donor retention? Check your LTV.
• Is our major donor program working? You can't know without knowing your MD LTV.
• What's our donor revenue going to be next year? Your best guess starts with LTV.

+ + Chick-fil-A knows this...

How can major companies spend millions on advertising? They know the LTV of their customers and they spend accordingly to, a) find new customers, and b) increase the value of their existing customers.

By one report, the average Chick-Fil-A customer spends about $20 per visit (30% higher than other fast food shops) and makes 11 visits in a year. I'm guessing this data undersells what Chick-Fil-A actually sees. So when you order from Chick-Fil-A and they say "It's my pleasure," you are a multi-thousand-dollar customer, not a $20 transaction.

Same with your donors. But how much are your donors worth in LTV?

+ + Calculating your LTV

I would offer that you should have an average LTV number in mind for your organization right now. Most non-profit leaders I've worked with couldn't tell me their donor LTV. They'll say it's very difficult to calculate. Too many variables.

True. But false. Here's why...

Every LTV calculation is an estimate. So my suggestion is to start with the most simple calculation for an LTV estimate, and then refine as you move forward.

Here's the simplest way to calculate LTV of your donors:

Average Gift * Number of Gifts Per Year * Average Years = LTV

The first two you can ascertain from your data pretty quickly. For "average years," calculate or estimate your attrition rate and use the inverse (25% attrition is 4 years on file).

Here's an online LTV calculator for you. Again, start with your most simple estimates and refine. 

My team at Grassroots Action has been acquiring donor and donor prospect data for organizations for more than two decades. We don't sell "programs" or websites (although we can build both for you). We create channels for donors and data for you.

I'd love the opportunity to help you grow your constituency and enhance the lifetime value of your donors with strategies, campaigns and messaging that fit your vision and mission. Give me a call or set up a time to chat below.

Steve Elliott
[email protected]

P.S. Next week: "How much should I spend on new donors?"

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Source: Business Insider on Chick-Fil-A donors (numbers inflation adjusted)

© 2025 Steve Elliott. Grassroots Action, Inc.