In fundraising, the size of your average gift amount is more than just a number. This metric can tell you a lot about your donors’ capacity to give. Letโs explore average gift amount and its significance in building a robust fundraising strategy.
What is the Average Gift Amount?
Average Gift Amount represents how much your donors typically give to your cause. It can serve as a proxy for two crucial data points:
- Capacity to Give: How much are your donors financially able to contribute?
- Conviction in Your Cause: As fundraising expert Tim Kachuriak puts it, are donors saying “yes” or “heck yes” to your gift asks?
Focusing on this metric can unlock big opportunities. By optimizing the initial gifts your donors make and steadily upgrading their contribution levels over time, youโll see increases in donor lifetime value, which can significantly increase your organizationโs revenue. Increasing your organization’s revenue means you can further the mission and continue to serve your community.
How to Calculate Average Gift Amount
The formula for the average gift amount is simple:
Amount Given ($) / Number of Gifts
However, it is essential to exclude exceptionally large gifts (like $10K+) from the calculation. These outliers can skew the data and give you a misleading picture of your typical donorโs behavior.
Why the Average Gift Amount Matters
Increasing the average gift amount from existing donors is far easier than acquiring new donors. These supporters are already committed to your cause and, with the right encouragement, are often willing to increase their contributions. This shift can have a tremendous impact on your overall revenue.
Letโs consider a five-year growth plan: If you donโt make any changes to your average gift amount, revenue stays static at $4.2 million annually. However, by focusing on increasing your average gift amount by just 10% in the first two years and 5% in the following years, you could see a 33% revenue growth by year fiveโup to $5.6 million.
Tactics to Increase Your Average Gift Amount
- Use dynamic gift ask arrays: Customize gift asks based on a donorโs past giving and capacity. This tailored approach encourages them to give more.
- Connect gift asks to specific program outcomes and stories: Show donors what their increased contributions can achieve. For instance, if youโre encouraging a donor to move from $1,000 to $2,000, explain exactly what that extra $1,000 will do for your cause.
- Special gift asks during off-cycle giving periods: Present unique opportunities that feel exclusive to the donor and encourage them to give at a higher level.
How to Increase the Average Gift Amount with Virtuous
Itโs understood that motivating existing donors to contribute a little more is both cheaper and easier than trying to acquire new donors. The challenge lies in determining the right motivation for each audience segment, ensuring that your approach resonates with their specific interests and encourages them to increase their support.
When considering segmentation, especially when using a platform like Virtuous, the key is identifying the donors most suited to receive a specific message or strategy. Itโs about understanding which individuals will be most responsive to the tailored communication, ensuring that the right message reaches the right person for maximum impact.
See What Virtuous Can Do for You
Additionally, understanding the online average gift amount is crucial, and the tools in Virtuous can help improve it. This can be done with dynamic gift arrays, which show the impact of donations and include pop-up suggestions for special projects. If your current CRM doesnโt stack up, reach out to Virtuous for a demo.
Final Thoughts
By understanding and optimizing the average gift amount, you can improve your fundraising efforts and create a more sustainable future for your organization and those you serve. Whether focusing on major donors or core supporters, tailoring your approach to average gift amount will lead to growth and a stronger connection with your donor base.
