Donor lifetime value (LTV) estimates the total a donor will give over their relationship — average annual giving times expected years retained. It justifies what you can spend to acquire and keep donors.
The example
$150/yr for 7 years.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | Annual gift | 150 |
| 3 | Years | 7 → $1,050 |
The formula
The formula:
How it works
How it works:
- Average annual gift times the expected donor lifespan (years retained) gives a simple LTV.
- Estimate lifespan from retention:
1 / (1 - retention_rate)— 80% retention → ~5 years. - LTV sets your acquisition ceiling: spend to acquire only up to a fraction of expected LTV.
- For a more rigorous figure, discount future years to present value.
Lifespan from retention. If you keep 80% of donors each year, the average donor lifespan is 1 / (1 - 0.80) = 5 years. Plugging that into LTV connects two metrics: improving retention even a few points stretches lifespan and lifts LTV across the whole file — which is why retention beats acquisition for long-run growth.
Try it: interactive demo
Annual gift and retention (years auto from retention).
Variations
Lifespan from retention
Expected years:
Acquisition ceiling
Spend limit:
Discounted LTV
Present value:
Pitfalls & errors
Lifespan drives LTV. Retention sets expected years — small retention gains compound.
Use average giving. A typical annual gift, not a one-time spike.
Acquisition lag. Don’t spend the whole LTV up front to acquire a donor.
Practice workbook
Frequently asked questions
How do I calculate donor lifetime value in Excel?
How do I get expected donor lifespan?
What is LTV used for?
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