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Is Your Average Gift Too High? Questions to Ask About Donor Retention

Is Your Average Gift Too High? Questions to Ask About Donor Retention

As a nonprofit, it should always be celebrated when you receive a major gift. Whether it’s in monetary form or through a noncash gift, a large donation – especially one that is potentially record-setting for your organization – is something that absolutely should be highlighted.

But let's pause for a moment and ask ourselves, what if we could do more? It might seem counterintuitive, but the higher the gift amount from your current group of donors may not entirely translate into a long-term funding solution.

Here's why.

According to the Blackbaud Institute Charitable Giving Report for 2021, the average gift to a nonprofit in 2021 was $813. The average online gift is now up to $204 according to the same report.1 That is a 15% increase from $177 the year before for the average online gift. 

At first glance, any fundraising metric trending up 15% in a year is generally celebrated. But maybe we should step back to further analyze what a dramatic increase in an average gift COULD mean. 

Before we celebrate an increased average gift, we need to determine what is causing the increase. If your donor count is the same or higher and your average gift is increasing, then you have reason to celebrate for sure. That combination indicates that you are retaining donors AND providing them a reason to give at higher levels. This is a great predictor of future revenue growth

Unfortunately for many organizations, the increased average gift is a function of fewer donors giving and their major donors being more loyal, so the overall revenue is the same or higher. If that is true for you, rather than celebrate your increased average gift, you need to be concerned about your donor engagement and how you can retain more donors from year to year. 

How To Make It Better

Answers to the questions below will help you evaluate how you can potentially engage more donors. The result may be a lower average gift but could lead to a healthier overall donor file and lead to long-term revenue growth

  • Is your donor segmentation limiting the number of donors you are cultivating?
  • Is your messaging clear and compelling?
  • Is your gift array appropriate for the audience? 
  • Are you offering the opportunity to engage in various giving channels?
  • Are you acquiring new donors at an effective rate?

Certainly, a loyal group of major donors is a good thing, but long-term revenue growth will come from engagement of donors up and down the donor file. That may mean your average gift will decrease over time as you engage with more donors.

Just like in any business, keeping your customers happy and engaged is top priority for them to come back. Having regulars walk through your door on a consistent basis is a great feeling, but to sustain yourself for the long haul, acquiring new customers is key to your overall growth.

Keep the above questions and thoughts in mind as you start moving into a new, and greater, period of growth for your organization.

1 Blackbaud Institute: Charitable Giving Report

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