Imagine you are the new executive director of Do Good Inc., a local nonprofit. In 2019, your organization received donations from 1,000 supporters. With an annual average gift of $50 per donor, these supporters gave a total of $50,000. That amounted to three-quarters of Do Good’s annual budget.
2020 is looking like a different story. Like every nonprofit in America, through no fault of its own, Do Good has lost donors. Some sources say that the average nonprofit will lose 10 out of every 100 donors each year. I’m wondering if it could be even higher. Consider these factors, applied to Do Good’s supporters.
Of those 1,000 supporters…
100 donors moved: Given that about 10 percent of Americans move each year, it’s possible that 100 of those 1,000 donors packed up and left town, taking their financial support with them.
8 donors died: On average, 8 out of every 1,000 Americans die each year. The number of supporters your organization loses to death will vary, of course, depending on factors like the average age of your donors. If your donor base is older, you might lose more; if yours is a youthful demographic, it likely will be less.
A dozen donors lost due to other issues: A lot of things impact the likelihood that a donor will continue to make donations to your organization. A portion of donors will face some sort of crisis or life change. They’ll lose their job, have a devastating illness, decide to retire, have a baby, send a child or two to college. Stats show that those who’ve given for the first time don’t always give again. Up to half of first-time donors fail to make a second donation.
Given all those factors, it is possible that in 2020, Do Good Inc. will have 120 fewer donors and $6,000 less in donations.
While these numbers likely don’t echo the exact experience of your nonprofit, losing donors is an issue all nonprofits face. Your donor list gets depleted over time, so you must find new donors to replace them. Attracting them comes at a cost, but it is an investment required for your institution’s viability and stability. Donor acquisition will always cost your organization in the short-term, but will pay off long-term as a good many new donors continue to make gifts.
One of the most common ways to acquire new donors is through an acquisition mailing. It’s a fundraising appeal that is sent to people who have not supported your organization in the past but have qualities that make you believe there is a good chance they will make a gift.
For these efforts to be effective, it is best to work with a direct mail expert. Most will recommend that instead of buying expensive mail lists of potential donors, you sample several mail lists by buying part of a list and doing a test mailing to see which is most effective. A direct mail expert can help you in several ways. They will know the best sources for valid, reliable mailing lists and they will be able to identify, based on the current donor profile that you will provide, lists that are best-suited to your organization. Some of the list selection boils down to common sense. For example, people who make donations to an organization that preserves the national forests would also likely want to support an organization that protects the nation’s wild rivers.
By breaking down the per donor cost of this sort of a direct mail fundraising appeal, you can better understand how the investment will eventually pay off.
For example, if your nonprofit does an acquisition mailing to 10,000 prospects at a cost of $7,500 and gets 100 donors (1 percent, the industry average), who make an average gift of $35, you have acquired 100 new donors at a cost of $40 per donor. ($7,500 less $3,500 in gifts divided by 100).
The key is to cultivate these new donors, encouraging them to give larger gifts in future years or to even sign on to a monthly or quarterly giving schedule.
Fundraising experts are quick to point out that donor acquisition should be more than an annual or semiannual direct mail appeal. It should be a part of a nonprofit’s daily routine, and, it should take multiple approaches.
Your nonprofit has a powerful network at its fingertips–your board members and volunteers. People tend to gravitate toward those who have the same interests and affiliations as they do, so chances are good your network can connect you with others who would be interested in supporting your cause. Without hounding them, kindly ask your board and volunteers to offer names and contact information of those within their circle of friends and associates who might be interested in learning more about your organization. Add them to your mailing list and ask your contacts to reach out to them in a personal way about supporting your organization.
People who aren’t necessarily your annual donors often attend your fundraising events. Don’t neglect to add them to your list of potential donors. The runners who compete in your 10k, the guests that a board member invites to the annual gala, the guest who attends a thank-you lunch with a volunteer.
Take a look at who supports organizations like yours. If your nonprofit provides free health services to children, take a look at the list of supporters in annual reports for organizations that have similar missions–nonprofits that provide healthcare to poor families or shelters for women and children, for example. Although the annual reports won’t include contact information, a professional mailing house could do the research required and add these people to your mailing list. It’s important to remember that mailings that are targeted at people who are similar to your typical donor will perform best.
For more information about how to achieve the best results with a donor acquisition mailing, give us a call. We can help you find effective mailing lists and test them and help design, print and mail your fund-raising appeal to these new donors.
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