Is Lifetime Donor Value still relevant?
By Dirk Rinker MOST NONPROFITS that pursue fundraising through mass media rely on basic analysis to measure the effectiveness of acquisition programs. Straightforward ROI computations (e.g. cost per dollar raised, cost per new donor, etc.) might be compared to a Corolla—not flashy, but reliable. Such measures as Lifetime Donor Value (LTDV) analysis are like a Prius hybrid—taking you farther, but with a higher initial investment. Quite simply, LTDV compares lifetime income with long-term costs, before you know what the lifetime income will actually be. Where ROI can only provide an immediate assessment of whether an acquisition or renewal effort makes money, LTDV offers a more complete picture of the donor’s potential lifetime value. It accounts for such impacts as the cost to acquire a donor, the cost to maintain the relationship, and even inflation—forecasting two-, five-, and even 10-year lifetime values. With the intense struggle for donor dollars, the need to identify the best acqu
