Use of Recency, Frequency and Monetary Amount to Reactivate Lapsed Donors

Feb 5, 2022
A lapsed donor is a donor who used to contribute to an organization but who has not donated within a specified amount of time. Usually, that time period is twelve months. However, some organizations consider a donor lapsed after two or three years. The time period is usually informed by a nonprofit’s fundraising plan and the key metrics they track.

According to the 2018 Fundraising Effectiveness Report, for every 100 donors gained in 2017, 99 donors were lost. Numbers like these may be startling to organizations looking to expand their donor base and improve retention but being aware of the likelihood of donor lapse is the first step in preventing it.

There are many reasons for a former supporter to stop giving. For example, their financial situation could have changed, which is out of your control. However, a nonprofit’s actions or inactions can also influence donor lapse.
Most charities now recognize the value of their database. Having been sufficiently motivated to give at least once in the past, with the proper encouragement it is eminently possible that donors will do so again. The problems for many nonprofits lies in deciding which lapsed donors should be selected for contact.

Recency, Frequency and Monetary Amount (RFM) which is now available in most nonprofit database system can be a proper method to reactivate the lapsed donors. Data on Recency look at the time since the last gift was given, data on Frequency look at the number of gifts that have been given and data on Value look at the value of the gifts given. All the data are merged to create a score that a fundraiser can use to decide who to target with a given campaign.

The RFM Analysis is based on the following assumptions;
  • Donors who give frequently are statistically more likely to respond to a communication than those who don't.
  • Higher-value donors are more attractive than lower-value donors.
  • Donors who have given in the last six months are more likely to give than those who have not given for the past three years.
The resulting RFM Score will allow the fundraiser to prioritize donors for contact. RFM can be used effectively in identifying those donors who are likely to lapse, and in determining the patterns of lapsing. A campaign can be developed for those donors who have not given recently or whose frequency and value patterns have been interrupted.

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