Fundraisers should be "measuring the donor" in addition to the basic details of campaigns, according to Roger Lawson, a fundraising consultant.
Lawson told delegates at the Institute of Fundraising’s national convention on Wednesday that the sector needed to move away from analysing campaigns and look at the effect that campaigns have on donors’ behaviour in the longer term.
"We are measuring a lot in terms of the activities we do and how they are working, but we are not doing anything beyond that, or on what it is doing in terms of long-term support," he said.
"In many cases, charities invest a lot of time and effort in measuring activity, but I’m not so sure we’re measuring what the impact is on the donor."
Lawson gave the example of a charity that had been sending out six direct mail appeals a year to donors, including a newsletter, but its net income barely broke even during the course of the year. The charity split its donors, sending half of them three mailings – the rest continued to receive six. It found that donor retention was higher for the donors that continued to receive six.
"The charity was worried it was upsetting donors by asking them too often," he said. "This shows we should look not only at appeals, but also at the impact."
At the session, called Measuring Direct Marketing: What’s Right and What’s Wrong? Lawson urged delegates to forget about measuring return on investment and focus on cost per acquisition, lifetime value and net income because they were more interesting and more useful.
Nick Mason, head of fundraising strategy and development at the RNIB, who also spoke at the session, said: "If there’s one thing that gets my goat even more than targeting ROI, it’s when people ask ‘what’s your attrition rate?’
"There’s no such thing as a generic attrition rate across the organisation because it is dependent on so many things – and yet we use that as a management tool."
Mason said the measurement did not consider the donor’s perspective: had donors decided not to support the charity, was it their financial situation, had the charity made the wrong ‘ask’ or had it had not asked them?
He suggested using a graph to illustrate lifetime value, showing the donor’s value to date and in the future.
"This is what they do in the commercial world: they measure cost per acquisition and lifetime value, and then they capitalise on these," said Mason. "We talk about charities being businesslike – we should start to use the tools that exist in the commercial world."