Lifecycle
A segment based on donor behavior, which changes once per reporting period (e.g. fiscal year). These segments are particularly helpful for not just trends but also for determining opportunities for strategies specific to acquisition, retention, and lapsed donor reactivation.
Donors either have the status as active or available, depending on whether they did or did not give in the current period. Understanding the lifecycle can be complicated, but remembering that they are available until giving helps to follow the lifecycle path. The last lifecycle they gave in for the previous period determines what lifecycle they are available in for the current period. All donors who did not give at the end of one period become available “13-24 Month Lapsed” donors. After two periods, they become available "25+Month Lapsed" donors and stay there as inactive donors until removed or reactivated.
In the first period they give, donors are “New Donors” until the end of that period (whether that’s one day or 12 full months from when they were acquired). Once the new period starts, they become available “2nd Year” donors. If they give in that period, they would be considered an active “2nd Year” donor. When the period changes again, any non-donors would move to inactive status but still stay as available “13-24 Month/Recently Lapsed” donors, while those who gave will move to be active as “Key Multiyear” donors. With one more period shift, "Key Multiyear” donors will move to available “Key Multiyear” donors and then give to stay active, or move to inactive status as available “13-24 Month/Recently Lapsed” donors when the period ends. If a lapsed donor continues to not give, they will move to available “25+ Month/Long Lapsed” as an inactive donor and remain there unless they reactivate. All donors have the status available even if they are inactive, meaning that they are available to give again at any time.
If an available lapsed donor does become active, they will move to active status for either "13-24 Month/Recent" or "25+ Month/Long" lapsed donors, depending on the timeline above. When the next period starts, they will move to the available “Reactivated Last Year” lifecycle in the next period. If they give again in the next period they would move up to “Key Multiyear”.
In this way, there’s a symmetry that we like to think of as a mountain—three steps up to the peak via acquisition (New, 2nd Year, Key Multiyear) and three steps up the peak of reactivation (Recent/Long Lapsed, Reactivated Last Year, Key Multiyear). Regardless of the path a particular donor takes, getting them to Key Multiyear status and retaining them there is the primary way of increasing lifetime value. This also means that all active Key Multiyear donors have given in at least three consecutive periods/years.
Note that lifecycles are tied to reporting periods, so the same donor’s lifecycle may differ between different period types (e.g. Closed Fiscal Year vs. Closed Calendar Year vs. Trailing 12 Months). When it comes to YTD periods (Fiscal Year-to-Date or Calendar Year-to-Date), it’s important to note that retention and reactivation rates will be incomplete until those periods close (as the number of available donors is the full portion going into the period, but each month more will become active). See “Previous Lifecycle” below for additional use cases.
Previous Lifecycle
The value of lifecycle from the last/prior period. This is used heavily in determining retention and reactivation rates, as donors who were in a specific lifecycle (e.g. New Donor”) in the previous donor and have given in the current period.
Retained Donor/Retention Rate
When a donor who was active in the previous period has given in the current period, we would consider them having been “Retained.” We recommend primarily reporting on retention when looking at full 12-month periods, as this normalizes seasonality.
When we divide the number of donors retained in a period by the number who were available in that period (excluding lapsed donors defined in the example above), we get the Retention Rate. Unless otherwise specified, Retention Rates are overall retention—but can also be shown for specific subsets or segments of donors. For example, if we look at 2nd Year Active donors divided by 2nd Year Available donors, this would give us our 2nd Year donor retention rate.
FYTD/CYTD Activation Rate (partial period retention rate)
While the calculation is the same, we prefer to avoid the term “Retention Rate” if we’re talking about a period other than 12 full months. For example, when looking at an FYTD period, we would generally use the term “FYTD Activation Rate” as a stand-in for retention to help indicate that this number is incomplete in the period and will continue to increase as more of the year is available.
Reactivation Donor/Reactivation Rate
Similar to Retention Rate, Reactivation Rate is a measure of donors active in the current period—but this time based on those who were in a lapsed status in the previous period. Thus the calculation of Reactivation Rates are identical, but instead of being based on donors active in the previous period, it’s based on donors who were lapsed. Unless otherwise specified, this will be the overall reactivation rate—but could also be looked at for specific segments and is commonly split between recently (13-24 months) and long (25+ months) lapsed as reactivation is far more likely in the first year after lapsing.