Check this out! This graph shows the the five-year value of a donor based on how quickly an organization converts a new donor into a second gift donor.
The correlation is astounding.
New donors that give a second gift within the first 3-months have LTVs nearly twice as high as those who give at the 12-month mark. This demonstrates that it is worthwhile to spend money cultivating a second gift early in your relationship with a new donor.
What’s also surprising is the value of donors who convert 13-24 months after their initial gift. This is encouraging. Don’t give up on a new donor than didn’t convert in their first year.
However, less surprising, new donors who wait 25+ months to convert have much lower LTV rates.
All this indicates the need to have strategies in place encouraging the second gift ASAP for your newest acquisitions.
I run a data science consultancy for non-profits in Canada and was interested to see if I could not only replicate the results you got here, but also examine the levels of other metrics post-second gift.
I used a gift file from a mid-sized academic institution and grouped donors based on weeks since first gift. The metrics I then examined were based on the following 5 years.
Like you, I found that donors who gave their second gift within 3 months were the most valuable. In terms of their post-second gift behaviour, their median donation total was $640. Compare that against those whose second gift was given from 4-6 months after the first gift, and their median donation total was $250. Big difference, over 2.5 times! But the value per donor doesn’t continue to decrease with second gift timing as it does with yours.
The reason for this value difference in value isn’t really in loyalty (years on file) but actually in number of gifts given. In the data I examined, the median # gifts overall was 18 in that 0-3 month group and the median # gifts per year was 8.5. Quite a bit higher than donors whose second gift was given later than 3 months.
Anyway, I’ll paste the summary table of my results and hopefully it doesn’t look horrible. Let me know if you have any questions! 🙂
Time_Since_Buckets Med_Num_Years Pct_5yrs_Loyal Med_Num_Gifts Med_Num_GPY Med_DonTotal Num_Donors
1: 0 – 12 Weeks 3 0.3180428 18 8.5 640 654
2: 13 – 24 Weeks 2 0.1733871 8 3.4 250 248
3: 25 – 36 Weeks 2 0.2385321 8 3.0 240 545
4: 37 – 48 Weeks 3 0.2483157 8 3.0 250 1039
5: 49 – 72 Weeks 3 0.2654430 8 3.0 280 2833
6: 73+ Weeks 2 0.2139253 7 3.0 200 991
Please share the underlying data. Thanks!
Very interesting, can you give more details around the data you used?