Donors: how much do they give in a lifetime?

Authors

  • Nigel Magson

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    1. Talking Numbers Data based solutions Ltd, Lorraine House, Market Place, Cirencester, GL7 2NW.
    • Talking Numbers Data based solutions Ltd, Lorraine House, Market Place, Cirencester, GL7 2NW.
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    • Nigel Magsonfounded Talking Numbers Data based solutions Ltd under the Target Direct umbrella in 1996. Talking Numbers work with a number of commercial and nonprofit organisations in providing database consult ancy and data analysis services. Prior to this Nigel spent many years working as an employee or consultant for British Gas developing database marketing within the industry and producing strategic marketing analysis. Nigel is a regular contributor to magazines and a speaker on database-related topics at conferences.


Abstract

In a relational approach to fundraising, nonprofit-making organisations have the task of developing profitable relationships with their supporters. This approach requires the definition of ‘lifetime value’ in order to assess its performance.

Yet the paradox of calculating a lifetime value is that the only accurate definition of any particular individual's value can be made once they are no longer a donor – when they have died or have stopped giving. At this point they may appear of no use. However, it is by understanding past donors that present donors can be understood in terms of their existing and potential ongoing value.

This paper, building on recent debate and research within the sector,[Sargeant, A. and McKenzie, J. (1998) ‘An Investigation of Donor Lifetime Value’, Paper presented to ICFM Conference, University of Warwick.] refers to the practicalities of creating and using not one, but a variety of measures from information sources that exist within such organisations. The paper specifically explores the way measures can be created and used. It raises a number of the practical issues involved in terms of accounting definitions and information availability. Understanding and using the value measures of supporters are key to ensuring that this relationship is dealt with in the most effective way for the organisation. Copyright © 1999 Henry Stewart Publications

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