This metric tells how much income your can expect from a particular group of donors; it is a measure of donor commitment. Knowing the Lifetime Value of a donor will help justify the investment you make in acquiring donors. Pull data from a specific time period for example 5 years of data.
If your Lifetime Value is high or increasing:
• Your donors likely stay with you for a long time. You are doing a good job of donor retention.
• Your average donor likely gives through more than one channel during her lifetime. You are doing a good job of multi-channel fundraising.
• Your typical donor likely increases the size of her gift over time. You are doing a good job of donor upgrading.
If your Life Time Value is low or decreasing:
• You may be attracting the wrong kinds of donors in acquisition (one-gift, low-dollar).
• You may be over soliciting, or under soliciting.
• You may be treating your donors as ATMs, by not stewarding them as valued donors.