What happens when donors stop giving? Often, nothing. They wither on the vine and then vanish without a word. Other times, nonprofits keep communicating with them, and sometimes they give again. When this happens, this is called donor reactivation, and today we’re looking at this metric as part of our ongoing Data Storytelling Series.
Donor reactivation matters a lot because it’s much more difficult, and expensive, to attract new donors than to retain your existing ones. When a donor lapses, if you can reactivate them, you are reducing churn and preserving revenue that is easier to sustain than it is to earn it from new donors.
The donor reactivation KPI enables you to track the effectiveness of your efforts to reactivate lapsed donors.
What Is Donor Reactivation?
Donor reactivation refers to donors who lapsed – meaning they stopped giving – and then resumed giving again. Typically this is measured year to year, but the gap between gifts can be as long as you like. So as long as a donor keeps giving at least once a year, they are not considered lapsed.
But if they go more than one calendar year without giving, they have lapsed. If they give again in some future year, they would be considered reactivated.
How Does Donor Reactivation Get Calculated?
To calculate donor reactivation, you need just two sets of data – both of which can be uploaded to the Fundraising Report Card, which will calculate your donor reactivation data in seconds, along with a horde of other fundraising metrics. The two data categories you need are:
- Donor ID numbers
- Donation dates
You’ll need this information for a minimum of three years in order to calculate donor reactivation figures. Additionally, the app requires one more field, donation amounts associated with each date and donor ID number.
- Donor ID numbers
- Donation dates
- Donation amounts
First, review all the donors who gave three years back. Then, look for donors from that list who did not give the following year. And then, of those, look to see how many gave again in the third year. Take the number of reactivated donors who gave in the third year, and divide them by the ones who stopped giving in the second year.
It’s easier to just do it than it is to describe it. Here’s an example:
Suppose you had 1000 donors in year 1. The next year, 500 of those donors did not give. That would mean you have a lapsed donor rate of 50%. But then, the year after that, suppose 200 of those 500 donors started giving again.
200 divided by 500 means you have a donor reactivation rate of 40%.
The interesting thing about this calculation is that the 1000 figure doesn’t show up in the math, but you need it in order to determine the 500. In other words, you need to know which donors used to give but then stopped. And that does take some work if you do it without the Fundraising Report Card. But once you have that number, you just need to see how many of those donors resumed giving, and then it’s a simple division problem.
It’s also worth noting again that you could consider one year not long enough to be considered lapsed. You might prefer a two-year gap, or even larger, before initiating some sort of reactivation campaign.
What Donor Reactivation Metrics Tell You
You can glean three primary insights from this data, two of which are general in nature and not specific to your data.
Importance of relevant donor communication
If donors respond to your reactivation efforts, this shows you how important it is to send relevant communications to donors. They’re responding because you noticed them and are sending communication that is directly to them. It’s relevant to their situation, and they respond accordingly.
Importance of feeling known and valued
Donors, and all people, want to feel valued. They want to know their giving makes a difference. Donor reactivation communication makes it clear that they matter – as long as you personalize it.
Imagine receiving communication from a charity that says something like, “We noticed you gave to our organization in the past but seem to have stopped. Your support matters and makes a big difference!” Such communication might even include the date of their last gift, and even the amount.
That communicates directly to the person that they are known and important, and their participation has been noticed and is missed.
Effectiveness of your donor engagement efforts
This is the most important thing you learn from this metric – how well you’re pursuing and re-engaging lapsed donors.
The more years you track this metric, the more you learn. For example, are your reactivation metrics changing or staying flat? Are they increasing or decreasing?
If they’re increasing, examine what you’re doing that’s encouraging more donors to start giving again. Are you reaching out personally as in the example above to lapsed donors? Maybe you increased your donor communication across the board and are doing a better overall job of staying in touch, and this is motivating more donors to resume giving – even without a personalized outreach.
If your metrics are decreasing, then something isn’t working and donors are dropping off faster and faster. You need to plug the leak and start retaining more lapsed donors.
What’s a good donor reactivation rate?
This will probably vary for each nonprofit. Studies online show a vast range of reactivation rates, from 4% to 12%, and even higher. Part of the discrepancy is due to variations in how this metric is measured.
Is a donor really lapsed if they don’t give for one calendar year?
Not necessarily in their mind. As long as they remain on your mailing and email list and keep engaging with your content, they haven’t really lapsed in terms of involvement, even if they haven’t donated.
That’s why some studies consider multi-year retention, and lapses of longer than one year. Using the Fundraising Report Card will give you a consistent set of data that you can use to guide your fundraising strategy and communication. It’s better to not compare yourself to other organizations since they might be measuring this with a different approach.
Limitations of the Donor Reactivation Metric
We’ve already touched on one limitation of this metric, and there are a few others too. Let’s take a look at each one.
Hard to know for sure who has lapsed
As just mentioned, one year may not be enough for a donor to be truly lapsed.
Picture a donor who gives one year in December. Then, they don’t give the following year, but they give in February and in December again the year after that. From the donor’s perspective, they never really lapsed. They’ve been a continuous supporter who gives occasionally.
If you sent this donor a reactivation campaign wondering why they’ve stopped giving and expressing how much you want them to stay engaged, they might get confused, and possibly offended.
So how you measure lapsed donors and when you decide to send a reactivation-style campaign are two very different decisions.
More effective if paired with engagement
One way to help with those two decisions is to pair up donor reactivation data with engagement data. A donor who gave in the past and who still opens and clicks on your emails, participates on social media, and responds to surveys but hasn’t given for a while is not really a lapsed donor.
A truly lapsed donor would be someone who has reduced their overall engagement, or ceased it completely. This person has disengaged. Something may have changed in their life – finances, place of residence, family situation, values and priorities – and there may be no way to reactivate them. But it’s also possible they just got busy or overwhelmed, and a personalized outreach will reactivate them and win them back.
So if you can align lapsed donors with engagement data, you’ll have a better idea of who to target for reactivation.
Doesn’t show giving amounts or ROI
Reactivation data also doesn’t show you giving amounts, which means you don’t know the ROI of your efforts to reactivate lapsed donors.
For example, if you spend $2000 on a reactivation campaign that gets 20 lapsed donors giving again, you might consider that a success. But if these donors give an average of $50, you just lost $1000. Of course, it’s not necessarily that simple. If any of them became monthly donors, there will be ongoing revenue. If they continue giving again in any context after this, that would add to the ROI of your reactivation efforts.
But the fact remains – just looking at donor reactivation rates doesn’t tell you how profitable your efforts are.
That’s why it works better to pair up donor reactivation data with donation reactivation data. Now, you’re also considering the amounts given, and can track the revenue coming in from reactivation efforts.
Percentages can be misleading
Suppose one year you have a 10% reactivation rate, and the next year you have the same thing. Does that mean your data is the same?
No!
What if in the first year you had 100 lapsed donors and reactivated ten of them, but then in the second year, you had 20 lapsed donors and reactivated two of them?
Both years have 10% rates, but you had far fewer lapsed donors the second year. So, that would mean the real story isn’t a flat reactivation rate. It’s the dramatic reduction in lapsed donors. You kept more of them from lapsing at all, and didn’t need to reactivate them!
This is why, in general, just looking at one fundraising metric in isolation from all the others isn’t usually a good idea. And this is why the Fundraising Report Card is so valuable. You get all the data for a trove of metrics, all at your fingertips at the touch of a button – including charts and graphs for data visualization to help tell the story of your data.
How to Turn Donor Reactivation Data into Stories
There are two aspects to this – the data itself, and the people behind the data. If you want to improve your donor reactivation efforts, pay attention to both.
Look at your data and tell its story
If you want to talk about this data in a meaningful way with your staff, leaders, or board, examine data from several years and see what’s happening.
Are your reactivation rates getting better? This is a story. Figure out what’s working. Are you targeting lapsed and inactive donors? What are you doing to reach them?
Or, maybe you’re not targeting them at all but your data is still improving. What else might you be doing differently in the last few years to explain that data?
Maybe your data is getting worse. If that’s the case, then something needs to change. Look at what hasn’t changed since the data started trending downward, and figure out a new strategy to reduce lapsed donors and reactivate more of them.
Your data might also be unchanging, or inconsistent. This indicates you’re not really doing anything to improve reactivation, and the randomness of data is showing up in your metrics.
Whatever the case, you can turn data from several years into visuals that tell the story of what’s happening, and your board, staff, leaders, and volunteers will understand and appreciate being so well-informed.
Find a reactivated donor
Another approach to telling the story of this data is to find a reactivated donor or two. Find someone who stopped giving, preferably for at least two years if not more, and who then resumed giving and is now a faithful donor.
Call them up. Talk to them. Find out their story to gain insight into why they stopped giving, and why they restarted. Did your communications and outreach have anything to do with either? If so, how? Let the donor tell their story, and you can then share it during your presentation to the board about donor reactivation.
Calculate Your Donor Reactivation Data in Seconds
By uploading just three categories of data to the Fundraising Report Card, you will acquire all the data and the graphs, charts, and other data visualization you can imagine, for a whole host of fundraising metrics including donor reactivation.
All you need are the donor ID numbers, donation dates, and donation amounts. That keeps everything anonymous. And with just those three sets of data, our system will calculate all sorts of metrics in seconds.
The hundreds of hours your staff would spend doing this on your own with spreadsheets can now all be devoted to more productive uses.
