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Donor profitability measurement

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Abstract:

Research in this paper examines, through analysis and a case study, the profitability of individual donors.The purpose is to examine these questions: What can we learn about the range and distribution of donor profitability from case studies?Who counts the most, profit-wise?What are the implications for fundraising management?The main conclusions are: Profitable and unprofitable donors: About half of donors are profit making and half loss making in a year. Donors show a very wide range in their annual net profitability.It is down to a few: A very few donors create the annual net surplus in a programme. In the case study shown, three quarters of net profit was generated by just one tenth of the donors.Strategy: A strategic focus on the few profit generators seems obvious, and a new approach to fundraising management is strongly indicated.Changing fundraising practice: Discussions with charities, agencies and consultancies suggest that cultural factors and a reluctance to change ‘the way we do things’ impede the take-up of a profit-based donor strategy.Journal of Direct, Data and Digital Marketing Practice (2007) 9, 47–66. doi:10.1057/palgrave.dddmp.4350075

Document Type: Research Article

DOI: http://dx.doi.org/10.1057/palgrave.dddmp.4350075

Publication date: July 1, 2007

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