Donor Acquisition Cost
What is Donor Acquisition Cost?
Donor Acquisition or DAC is the price you pay to convince a potential donor to make a gift to your organization.
The cost to acquire a new donor and donor lifetime value
go hand in hand. These two metrics combined can be used in analysis to determine if your fundraising department is financially viable or not.
For example, low DAC and high LTV would look something like this:
Where as high DAC and low LTV would look more like this:
How is it calculated?
To determine the cost to acquire a donor (DAC) you would sum all costs of appeals and marketing over a given period, including salaries and other employee-related expenses, and divide it by the number of donors that you acquired in that period.
As donations are increasingly made online, it is also useful to look at donor acquisition cost without the employee-related overhead expenditures.
= Total costs ÷ Total # of acquired donors