Let’s start by giving Lifetime Value (LTV) a basic definition. Simply put, it’s the total value of gifts a supporter will give to your organisation over the lifetime that they donate. Easy right?
From this, it’d be logical that all fundraising programs have a strategy focused on maximising the LTV from each supporter.
Surprisingly, that’s not the case. It’s pretty rare because by their very nature, not-for-profits are challenged to create an operating environment that supports a focus on LTV. Budgets are often set with many fundraisers raising money to fill immediate shortfalls. They do this within known organisational expense requirements and under a pressure to make fundraising investments pay back in very short timeframes.
To be successful in delivering a fundraising strategy focused on LTV, an organisation needs the following in place:
- An organisational operating model that supports investment in fundraising over programs, in the short term – it will result in more funding in services/programs in the mid-term;
- A long-term planning process that links fundraising goals to programmatic goals;
- Fundraising targets set over 3-5 years;
- A board and leadership team with a shared vision of their service strategy and a sustainable funding model that supports it.
What if you don’t have that? How can you employ an LTV focused strategy if you’re going year to year with your fundraising programs?
Focus on what activities you can do in the next 12 months that increase the level of giving across your entire supporter base, start by:
- Upgrading regular givers – if a supporter is already in your regular giving program, invite them to give a little more each month. Test them in your appeal program so they are giving in multiple ways.
- Converting other types of supporters – ideally, get as many event participants and appeal donors into your regular giving program. It is very likely that they will carry on supporting via appeals and events at the same time as giving on a regular basis. This will significantly increase their LTV.
- Take a look at the ‘back-end’ of your fundraising program. It is critical you have a robust retention program in place to contact supporters when committed gifts don’t come through. Increasing the number of successful gifts from each donor will have a positive impact on the LTV.
- Break down the silos – create shared KPI’s to encourage your team to bring donors in and out of different activities.
There is a lot of evidence that the more a supporter does for an organisation the more tightly bonded they become and the more they will do, increasing their interest in your work, their loyalty and their LTV. So even if your board or leadership team are not thinking beyond the next 12 months, there’s a lot of ways you can immediately start increasing the LTV of your fundraising program.