…But how many new donors do you need?

In my last blog post, I asked the question: How do you know if you need new donors?

I put you through a series of questions and calculations to help you figure it out. Spoiler alert - you may NOT need new donors. Wonderful! If that is you, I encourage you to get wildly generous and creative with your thank-yous and touch points this year versus trying to acquire new donors only. 

But let’s say you found yourself saying, “Yes, based on my answers - I need to acquire new donors.”

Cool - but how many?

In fundraising - more is not always more and this blog will help you figure out the exact number of donors you need to be successful in your fundraising goals. Additionally, this will help give you a North Star so that once you meet your goal or put systems in place to meet your new donor goal - you can focus on OTHER things in your nonprofit. 

How to figure out how many new donors you need:

In this blog post, I covered how to calculate your retention rate and your average donation rate. You’ll need both of these numbers to figure out how many new donors you’ll need this year. 

Step 1: Calculate your annual retention rate

Year 1: 458 donors

Year 2: 361 donors (note - it’s important to calculate year over year donors vs just the total number of donors ie: donors who gave in BOTH years)

Year 2 Donors/Year 1 Donors = 361/458 = 78%

78% is the annual donor retention rate.

Step 2: Calculate your average donation AMOUNT

Total revenue/total gifts = average donation amount.

$758,471/444 = $1,708

$1,708 is the average donation amount.

Step 3: Calculate the amount of revenue you can expect for this year based on your retention rate

Previous year revenue ($758,471) x Retention rate (78%) = $591,607

You should expect to raise at least $591,607.

Step 4: Calculate how many new donors you need to make up the revenue gap

Because we know in this example that the average retention rate is 78%, we know that there is a 22% revenue gap (100%-78%=22%). 

Now, I want you to take your previous year total revenue amount ($758,471) and multiply it by your retention rate gap (22%). 

$758,471 x 22% = $166,864.

Now, because you know your average donation amount from before is $1,708 - you do some simple math: 

Take the retention rate gap amount ($166,864) and divide it by your average donation amount ($1,708) which equals: 98 new donors (when you round up the decimal). 

$166,864/$1,708 = 98 new donors

This means that if you are trying to raise just as much money this year as you did last year - you need to go find 98 new donors giving at least your average donation amount. 

What is cool about this very specific number is:

• You know you need 98 new donors - not 10, not 900, but 98. It’s very specific

• How you decide to split up your gap revenue amount is up to you. You might decide to work hard to find one donor who can give you $166,864 OR you might try to find 98 monthly donors giving $150/month. 

There are a million ways to split up the data, but what I like about this exercise is that it gives you a specific focus rather than always trying to acquire new donors for the sake of it. When you know what goal you are aiming for, it’s easier to build out 2-3 strategies that support meeting that goal. 

Have questions? Or want help calculating your numbers? Shoot me a comment below and I’ll do my best!