How Organizations Grow

Here's a valuable way to look at your organization's growth trends.

You split each year's revenue by the class of donors that provided the revenue. For example, you have donors who've been with you for over 6 years. I call these "old growth" donors. The giving of these donors is represented in the blue shade at the base of the graph. Notice how their giving declines over time. This is due to natural attrition. This shows what the organization's revenue profile would have been IF they stopped investing in new donor acquisition after 2004.

Fortunately, this organization invested in acquisition in 2005 (rust colored band) and again in 2006 (green) and this fueled growth.

All the bands collapsed in 2007 and the acquisition effort (purple) was not enough to counteract this and the result was flat growth.

The classes in 2008 (light blue) and 2009 (orange) were smaller and their revenue contribution was not sufficient to fend off decline.

The important point here is to understand your organization's revenue base and then to plan acquisition efforts to achieve the growth you desire.