Tag: retention

Donor Acquisition: Think Medium-Term

Steven  |  Repeat
acquisition

If you’re thinking about doing paid donor acquisition, you need to learn to think in the medium-term.

Here’s the story…

Two organizations we’re honored to serve spent significant sums on donor acquisition right before the pandemic.  One spent about $500,000, the other spent a little less than $1,000,000.

Both efforts lost money that year.  The campaign that cost $500,000 raised about $390,000.  The campaign also acquired new donors, to be sure.  But loud voices in the organizations disparaged the campaign.

And it’s easy to see why the campaign was disliked IF you’re thinking in the short term. 

However, we recently looked back at all the donors that were acquired in that campaign.  The organization discovered that those donors had given over $4,100,000 since being acquired.

Getting a return of $4,100,000 on an investment of $500,000 is a pretty good deal.  What looked like a “loss” of $110,000 in the short term was a gain of $3,600,000 (and counting!) in the medium-term.

(Of course there have been costs to cultivate those donors in the intervening years, but they are super minimal.)

What’s more, the organization would have been in real trouble during the pandemic if they hadn’t had those donors helping out.

If your organization is thinking about moving into paid donor acquisition, I hope this story serves as encouragement.  Moving to paid donor acquisition is a big step forward in an organization’s growth.  And you can read this post too, which will help you think critically about how to “make the leap” for your organization in particular.    

In short-term thinking, investing in donor acquisition a losing proposition.  In medium-term thinking (and beyond), investing in donor acquisition is investing in the growth and stability of your organization.

How (and Why) an Organization Goes from 3 Appeals to 9 Appeals

Steven  |  Ask
Appeal

Organizations that send out nine appeals a year weren’t born that way. 

They started with one appeal per year, and grew from there.

Organizations that grow in this way tend to follow a process. I’ve put the following graphic together to help illustrate the process, and I’ll put the lessons from each year below the graphic.

Click on the image to see a larger version

Year 1

This nonprofit has three different programs. Each appeal talks about all three of their programs.   

Year 2

The organization decides to focus their appeals more, so each appeal focuses only on one program.  And they make the changes in wording needed so that the funds raised from each appeal are undesignated.

They notice that the appeal about one of the programs raises more money than any appeal they’ve ever sent.  And they notice that, in total, they raise more through the mail than ever before.

Year 3

They replace the worst-performing appeal with a new version of their best-performing appeal.    

Internal stakeholders are concerned that one program is no longer mentioned, and one program has two appeals about it.  However, the organization raises more through the mail than ever before.

Year 4

Emboldened by how much money they are raising, they add two new appeals. One is focused on the program that raises the most, and one appeal is focused on the program that raises the second-most.

Internal stakeholders are convinced that “donor fatigue” is imminent.  However, all appeals continue to do very well.  The organization raises more through the mail than ever before, and notice that their overall donor retention rate has increased.

Year 5

They add two more appeals, for a total of seven. 

They notice, for the first time, that one of the appeals for their most popular program did not raise as much as it had in previous years.

The organization is concerned about that particular appeal, but they are not concerned about their overall program because they are raising more than they ever have before, and donor retention continues to improve.

Year 6

They add two more appeals, for a total of nine appeals. Of the two new appeals, one is a completely new appeal and one is about their second-most popular program.

Additionally, they pay particular attention to the appeal that didn’t work well the previous year. They find that its message veered off-topic, so they revise it for this year and it works great again.

The Process

Going from one appeal to nine appeals is a process. The same is true for fundraising emails.

And of course, as an organization goes through this process it should also be Reporting to its donors, use segmentation, have a Major Donor program, etc.

And the organization itself changes – the Development Department gets bigger, maybe an agency gets hired. 

But it’s just step-by-step growth. This is a well-known, proven path. 

And the results are clear.  Look at how many more dollar signs there are in Year 6 than in Year 1. That organization has meaningfully increased how much good it can do.

It’s also made the organization safer; if one appeal doesn’t work well, it’s insulated by several other appeals.

And it made the organization stronger – the increased volume of communication led to increased donor retention. They keep more of their donors year-over-year than they used to.

I’d call that a big win!