Donor acquisition cost: how much should you spend to find a donor?
Donor acquisition cost is what you spend, in money and staff time, to gain one new donor. Divide the full cost of a campaign by the new donors it brought in. It's worth it when that cost is lower than what a donor gives over time. The calculator shows both numbers side by side.
Worked example. Change any number to use yours.
With 72 new donors, as promised
Year 1
−$2,160
Net cost
3 years
+$1,469
Comes out ahead
A loss in year one is normal for donor growth. Look at the 3-year view: returning donors pay it off.
Needs about 99 new donors in year one, or 61 over 3 years.
I don't know our numbers
Use figures from your donor database or spreadsheet.
Average gift: $0 · Retention: 0 in 10
With 72 new donors, as promised
Year 1
−$2,160
Net cost
3 years
+$1,469
Comes out ahead
A loss in year one is normal for donor growth. Look at the 3-year view: returning donors pay it off.
At $1,200/month for 6 months, this needs to bring in $7,920 in new giving, about 99 new donors at your average gift. If 4 in 10 give again next year, about 61 new donors would pay it off within 3 years.
Worth it over time
Year one shows a net cost, but returning donors pay it off. This is normal for donor growth.
- Cost to raise $1
- $0.84
- Worth up to
- $1,445/month
How did we get this?
$7,920 cost ÷ $9,389 giving over 3 yrs
How did we get this?
(72 donors × $130 − $0 setup) ÷ 6 months − $120 staff time
Based on what they're promising, this is worth up to $1,445/month to your organization.
- New donors per active month to break even
- 11
- Most you can spend to gain one donor
- $130
How did we get this?
61 donors ÷ 6 active months
How did we get this?
That's what one new donor gives over 3 yrs, after fees. Year one only: $80.
Details
- Break-even, first year: 99 donors ($7,920 ÷ $80 per donor)
- Break-even, 3-year view: 61 donors ($7,920 ÷ $130 per donor)
- Full cost: $7,920 = $0 setup + ($1,200 fee + $120 staff and volunteer time) × 6 months
Make the case to your board
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Is It Worth It? for Nonprofits · Board summary
Board summary: Marketing agency
Inputs: $1,200/month, 6 months, setup $0, staff 4 hrs/month at $30, average gift $80, 4/10 give again, 3-year view.
Verdict: Worth it over time. Year 1: −$2,160. 3 years: $1,469.
Questions we asked the vendor: Do you understand donor journeys and recurring giving? Who owns our donor data, website, and ad accounts if we part ways? How will you report new donors? When should we expect results, and what's the plan if they don't come?
Estimates for planning only. Not financial or tax advice.
How to calculate it
Add up everything the campaign cost: fees, ad budget, setup, and staff time. Divide by the number of new donors it brought in. That's your cost to acquire one donor.
Compare it with "Most you can spend to gain one donor" in the calculator. If acquisition cost is lower, you're coming out ahead over that time frame.
Why first-year numbers mislead
Finding a donor often costs more than their first gift. That's normal. What matters is whether they give again. The year one versus long-term cards show this directly.
Worked example
Hypothetical: $1,200 a month plus 4 staff hours at $30 for 6 months is $7,920. If it brings 12 new donors a month, that's 72 donors at about $110 each. With an $80 first gift and 4 in 10 giving again, the calculator shows whether that's worth it over 3 years.
What you're actually paying for
- Fees and ad budgets.
- Staff and volunteer time.
- Setup costs like new pages or forms.
Questions to ask vendors
- Do you understand donor journeys and recurring giving?
- Who owns our donor data, website, and ad accounts if we part ways?
- How will you report new donors, not just traffic or impressions?
- When should we expect results, and what's the plan if they don't come?
- What do you expect our cost per new donor to be, and how will you prove it?
How to tell if it's working
- Ask "How did you hear about us?" on your donation form.
- Use a separate link for each channel so gifts can be traced back.
- Count new donors from this channel every month, not just clicks or visits.
- Review monthly with the check-in tool on this page.
- Divide the full cost by new donors each month and compare it with the limit in the calculator.
How we calculate
- Full cost = setup fee + (monthly fee + staff hours × hourly cost + volunteer hours × hourly value) × months.
- Value of one new donor over N years = (first gift + later gift × (r + r² + ... + r^(N−1))) × gifts per year × (1 − processing fee) − thank-you cost, where r is how many out of 10 give again, divided by 10.
- Monthly donors are valued at monthly gift × 12 for each year they keep giving.
- Break-even new donors = full cost (minus the value of other goals you enter) ÷ value of one new donor, rounded up.
- Cost to raise $1 = full cost ÷ giving over the time frame.
- Most it's worth paying per month = (promised donors × donor value − setup fee) ÷ months − staff time per month.
Questions people ask
What's a good donor acquisition cost?
One that's lower than what a new donor gives you over time. Your own numbers decide that, not an industry average.
Should staff time count?
Yes. It's real cost, and leaving it out makes in-house work look free.
About the builder
Built by Paul Watley
Paul is the Director of SEO at Tandem Theory in Dallas, Texas. He builds websites and helps them get found through search and digital marketing. He is originally from Nebraska and now lives in Dallas with his wife, their three kids, and Sunny, their dog.
He built this free tool because nonprofits get the same sales pitches businesses do, with less money and less time to check the math. Put in your own numbers and decide for yourself.