The table is used to rank each category of Recency, Frequency and Monetary Value from 1 (best score) to 5 (worst score). Using the example of RFM values of 4-5-2: 

• the Recency score is ‘4’, which means the last gift was between 80~120 days ago, 

• the Frequency score is ‘5’, which indicates the donor has given less than 40 gifts, and,

• the Monetary score is ‘2’, which means the total giving is between $10,000 and $20,000.  

The conclusion on a donor with a 4-5-2 score is it's someone who last gave 2~3 months ago, doesn’t give very often but is a generous donor. This is someone who should be in your stewardship program but you shouldn’t try to solicit another major donation anytime soon. 

RFM Scoring

When it comes to RFM scoring, there are two basic camps. The first camp advocates for consolidated scoring and the second camp favors combined scoring. The next two sections describe each of these scoring techniques. 

Consolidated Scoring

Consolidated scoring means each column of the RFM score represents a numeric ranking from 1 through 5. Here’s what that looks like, a 3 digit number where the first digit from the left (or 100’s column) represents the Recency Score from 1 to 5. Any RFM consolidated score of 1XX represents a donor who has recently donated. Conversely, a score of 5XX represents a donor who has not given recently and therefore has potentially lapsed.

The Frequency Score is the middle digit (or ten’s column). Thus a RFM consolidated score of X1X represents a donor who gives frequently. The converse would be a score of X5X which represents a donor who does not give regularly. In this example of X5X, there is no indication on how recently they gave nor the size of their gift. Simply, the donor does not give frequently. 

To complete the RFM score, the third digit from the left (or digit’s column) represents the size of monetary gifts over time. As an example an XX1 represents a very generous donor. The other end of the spectrum, a XX5 represents a donor who has not given a large sum of money over time. They may be a new donor or a donor who frequently gives small amounts.  

In mathematical terms, here’s how the RFM Consolidated score is calculated:

RFM Consolidate Score = {Recency} * 100 + {Frequency} * 10 + {Monetary}

Compound Scoring

Alternatively, the compound camp advocates for adding each individual score of Recency, Frequency and Monetary together to give a compound score. By default the score would range from 3 to 15. To give you more variation in the scores which makes the result more actionable it's best to add a multiplier, such as 20 (or really any arbitrary value). In this case the equation looks like,

RFM Compound Score = {Recency} * 20 + {Frequency} * 20 + {Monetary} * 20

The RFM compound scoring goes (with a multiplier of 20) from 60 for a Top Tier Donor to 300 for a Small Lapsed Donor. The compound score as a number is easier to work with in reports and spreadsheets. It has a quick intuitive feeling based on a single number– the lower the score the more important the donor. 

While numerically easier to work with, e.g. all donors with a score greater than 75 have a significant level of importance to the organization, it is less clear why. The single compound score doesn’t highlight the difference between a major gift donor or a small frequent donor.

Hence, I’m on Team Consolidated score.

How to use RFM Consolidated Score

The following section is using the Consolidated approach to RFM scoring for the examples. You could replicate using the Compound scoring though I feel it would be a little more complicated.

I touched on it a little earlier when I said a 111 would be a Top Tier Donor and its pretty easy to understand as they rank #1 in each category of recency, frequency and monetary. 

Actional Segments Framework

An interesting way to look at your donor base through the lens of RFM consolidated scores is to generate categories of donors. Here are some sample categories to see the RFM score in action. Each category represents different donor behavior and thus would warrant a different method of engagement. :

• Champion Donors (Scores of 112, 111 or 211)

  • These are donors who give big, give frequency and give often. These donors should be in your Stewardship program and always receive a personal touch. No generic appeals. 

• Lapsed Major Donors(Scores of 551, 541 or 451)

  • These are donors who have given a large sum of money but not recently. The goal would be to move a 5 back to a 1, or in human speak; get these former large donors to re-engage with your organization.

• Growth Potential (Scores of 215 or 114)

  • These are donors who give frequently but in small amounts. These donors are candidates to thank and potentially upsell to a mid-level gift tier. 

• Potential Lost (Scores of 455, 544)

  • These are low dollar value donors who haven’t given recently. These donors may be good candidates for an automated win-back campaign.

I’d recommend creating a report to showcase each of these categories. With this data, your development teams would be able to focus their efforts on the right set of donors with the right action plan and maximize your returns on your development team’s effort.