Measuring the Impact of Investor Engagement: Assessing ROI

24 Jan 2025
Community Engagement, Investor Engagement, IDM
Every nonprofit owes its success to its relationships, particularly those with donors (or, as we call them at Convergent, investors). However, measuring just how much your investors’ engagement has impacted your nonprofit’s fundraising success is easier said than done. How do you determine if investors are truly engaged in your nonprofit’s work, and how does that engagement correlate to your fundraising ROI?
In this guide, we’ll discuss tips for understanding and assessing the impact of your nonprofit’s investor engagement efforts. With a clear process for measuring engagement, you’ll be better positioned to gauge the success of your outreach and ultimately improve fundraising results.
1. Set clear engagement goals
Before determining the impact of investor engagement, you need defined goals to strengthen relationships and cause connection. For instance, do you want to improve relationships with major gift investors to boost their retention? Or, maybe your organization wants to turn more one-time donors into recurring investors to bolster its base of loyal supporters.
No matter where your priorities lie, start by choosing key metrics to track. These should include both financial and non-financial indicators of increased engagement, such as:
- Investor retention rates
- The percentage of lapsed investors you re-engaged
- The number of investors who increased their gift size
- Target fundraising ROI
- Event attendance
- Investor volunteering rates
- The number of new recurring donors
Use these metrics to set engagement goals for different segments of supporters, including major investors, annual donors, investors with the potential to upgrade their support, etc. These goals will help you zero in on the most impactful investors to focus on and tailor your engagement strategies accordingly.
2. Estimate your investors’ lifetime value
In addition to the metrics outlined above, monitor your supporters’ estimated lifetime value (LTV). LTV measures how much money an investor will likely contribute to your nonprofit throughout the course of their relationship with your organization.
Instead of measuring fundraising and engagement success based solely on individual gifts or campaigns, LTV helps you analyze long-term investor impact. After all, an individual who donates $100 monthly may eventually contribute more than someone who donates $5,000 once before lapsing. With this understanding, you can focus your engagement efforts on those with the highest potential LTVs to generate the greatest impact.
To calculate an investor’s LTV, plug the information from your donor database into the following formula:
Your nonprofit’s average donor lifespan (length of time an investor engages with your nonprofit) x The investor’s average donation amount x Their average donation frequency = LTV
Use this metric to prioritize higher-value investors and prospects or increase an investor’s LTV by boosting their engagement. Engaged supporters who frequently attend events, volunteer, and participate in your campaigns are much more likely to stick around long-term — ultimately increasing their lifetime value.
3. Analyze the success of upgrade campaigns
Seeing a high return on your investment involves more than just retaining donors — it also involves ushering them to higher levels of giving over time, which clearly indicates your engagement initiatives are working.
An upgrade could look like a consistent mid-level investor making a major gift or a recurring donor doubling their monthly gift size. Moving an investor up a level on the donor pyramid (meaning they move from mid-level to major giving or minor to recurring giving, for example) is a major achievement. Any investor who increases their gift size boosts their LTV and demonstrates a desire to be more engaged with your nonprofit.
To encourage more investors to upgrade their support, create personalized upgrade campaigns with relevant engagement opportunities. Design your campaigns by:
- Choosing a good prospect for upgrading. Using prospect research and an analysis of investors’ LTVs, identify the supporters who would be most receptive to larger fundraising asks. Indications include historical involvement with your nonprofit, recent increases in engagement, a demonstrated passion for your cause, and financial capacity.
- Using your data to define a reasonable increased fundraising ask. Based on the target investor’s giving history and financial capacity, choose an ask amount that’s higher than their average gift size but still within their reach. You might set a stretch goal and a minimum ask amount for more flexibility.
- Creating an engagement and cultivation strategy. Before making the ask, engage the investor in several ways to increase their connection to your cause. This might include sharing impact reports, encouraging them to volunteer, or even inviting them to dinner with a board member. Personalize the opportunities based on each investor’s unique interests.
- Making your fundraising ask when the time is right. After cultivating your upgrade prospect, determine if they’re ready to make a larger gift. Prepare several ask amounts in case they don’t respond to your initial ask, and remember to thank them for their continued support even if they end up donating less than you ask for.
A large number of successful upgrade campaigns indicates that your engagement efforts are working and paying off. Any time you successfully upgrade someone, analyze your strategy to determine which tactics worked best and how you can replicate those strategies with other investors.
4. Ask for feedback regularly
Don’t discount the value of direct feedback from your investors. Many supporters are willing to tell you firsthand how engaged they are and what you could do to increase their involvement.
Send out surveys periodically to ask what investors think of your engagement efforts, how committed they are to your nonprofit, and what you can do to increase their personal investment in your mission. You might ask questions like:
- On a scale of one to 10, how satisfied are you with the emails you receive from our nonprofit?
- How often do you read our emails, volunteer, or attend events?
- Do you engage with our nonprofit’s social media accounts?
- Are you interested in attending events or volunteering with us in the future?
- How do you prefer to engage with our nonprofit?
- How satisfied are you with the impact of your donations?
- Do you feel that your donations make a real difference to our cause?
- Do you feel personally invested in our mission?
- What can we do to increase your level of engagement?
The answers to these questions will provide valuable qualitative feedback your nonprofit can use to measure and improve its engagement success.
Once you understand the effectiveness of your organization’s engagement efforts, you can identify ways to boost investor engagement and fundraising ROI even more. Whether that means personalizing fundraising appeals, being more financially transparent, or focusing on the investors with the highest LTVs, data-driven tactics will help you find more long-term success.
Contributor- Bonterra
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