Acquisition, But First …
As promised, Roger and I are about to do some systematic posting on donor acquisition.
But we are compelled — yes, compelled — to start the ball rolling with yet another warning about donor retention!
Compelled because this recent ‘Must Read’ report — the 2012 Fundraising Effectiveness Report — from the Association of Fundraising Professionals drives home once again the utter futility of pouring newly acquired donors into leaky buckets.
Here are the grim facts (looking at 2011-12 fundraising by 3,184 organizations, who raised over $2 billion in 2011):
- Every $100 gained in 2011 was offset by $100 in losses through gift attrition — a net gain of $0.
- Every 100 donors gained in 2011 was offset by 107 in lost donors through attrition — a net gain of -7.
- Overall donor attrition in 2010 was 59% — that is, 59% of 2009 donors did not give again to participating nonprofits in 2010.
- New donor retention was only 27%!
These are hard facts, folks.
So, as you fantasize about your new killer acquisition package, consider that, in addition to all those muttonhead non-responders, 73% of its actual donor delivery will be effectively wasted. Sure, those one-time givers help pay for the muttonheads. But then nada.
If this average attrition rate for new donors applies to your nonprofit, figure as follows. Say you picked up 10,000 new donors last year, but lost 7,300 of them in the subsequent twelve months. With a 1% prospecting return, you’ll need to mail 730,000 prospecting packages just to stand in place. Then you can think about growing.
If that kind of math lights your fire, the next time you fill up your car’s gas/petrol tank, why don’t you take a screwdriver and punch a couple dozen holes in the tank while you’re at it.
OK, now we’re ready to talk about acquisition.
Tom
P.S. The AFP study includes a Donor Retention Supplement. Be sure to read it!
2 responses to “Acquisition, But First …”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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Too often success of an acquisition campaign is measured by response rate and revenue at the point of being acquired. The leaky bucket — the cultivation programs — needs to interact well with with your new donors. In my opinion, success metrics for acquisition ought to be future retention, upgradability and the measurement of a donor’s multi-channel donor value. We talk about this a bit on our site as well, http://www.grizzard.com/part-ii-acquisition-quality-has-direct-impact-on-other-fundraising-programs-or-know-your-audience-today-for-tomorrow/. Great topic and conversation.
Fantastic post. I look forward to a lively discussion on this topic. It’s the proverbial elephant in the room. Not just because of declining results and overall effectiveness but perhaps because there is a need for new way of thinking and doing things differently. Innovation needs to take place and it needs to happen soon. The tried and true from the past just won’t cut it anymore. We need to face this reality… in my opinion.