Vetting for Value

Simply stated, NPV is the long-term value of a new donor in today’s dollars. It’s a complex calculation that takes into account the costs of acquisition and of cultivating or servicing the donor over time. NPV is the equivalent of net revenue, and it’s a powerful statistic to understand.

Determining the NPV of donors unlocks a huge opportunity to treat them
differently, even to ignore some potential new donors because their value will never exceed the cost to acquire and service them. For example, a donor acquired through direct-mail acquisition with an NPV of $225 can and should be treated differently than a special-event-acquired donor with an NPV of just $89. A donor acquired from outside List A with an NPV of $189 is less valuable than the donor from List B with an NPV of $269.