Having worked with nonprofits for more than 20 years, including serving on several nonprofit boards, I’d like to make the case for ongoing investments in donor acquisition. All too often, it seems that nonprofits don’t close the deal with their board members, who are unconvinced about the critical need for ongoing investment in donor prospecting. And with the typical net revenue loss on a mature acquisition program, it looks like a no-brainer budget item to cut.
Board members: consider this your wake-up call.
You have a fiscal responsibility to go where the money is – that’s the only way your organization will have the funding it needs to fulfill its mission. And here’s where the money is: in multi-channel, integrated fundraising campaigns that begin with donor acquisition, move to engagement and cultivation, renewals/reinstatement, donor upgrading, and gift acknowledgements.
Simple concepts. But they require detailed, constant attention and funding to work.
Let’s face it. Your donors are old. And for the most part, they respond predominantly through direct mail. Yet when they give through multiple channels they have higher long-term value to your organization. When embraced, traditional direct marketing channels can be reliable and predictable, providing steady revenue for an organization.
Let’s get to some basic facts because there is no silver bullet — no way to magically bring in new donors — without an ongoing, consistent monetary investment.
Do you think “inexpensive” online appeals are the panacea we’re looking for? Let’s do the math.
The biggest impact on performance is average response rate. The average direct mail acquisition response rate is about 1%, and the average online response rate is roughly 0.03% — not 0.3%, but 0.03%!
So for every 10,000 pieces of mail you send, how many donors and how much revenue will you add to your file? For every 10,000 emails you send, how many donors and how much revenue will you add? And that’s assuming we have equal-sized prospect pools, which we don’t. Email prospect files are a fraction of the size of direct mail prospect files.
This month, we bring you two Avalon client case studies, describing how we capitalized on our clients’ distinctive qualities to improve lackluster donor prospecting results.
The National Museum of the American Indian’s donor acquisition performance had suffered since the recession, and the two formerly strong co-control packages were starting to stumble. Avalon was tasked with finding a new and creative way to attract donors in a more cost-effective manner.
Back in September, Allison Porter wrote a blog titled “In Defense of Telemarketing” – sounding the alarm on the outrageous attacks on telemarketing specifically, and the fundraising industry in general. This month’s Agitator is running a two-part blog on the same subject as it pertains to donor acquisition, calling out those in the media and watchdog groups (among others) for complaining about the “high cost of fundraising” when they clearly do not understand the concept of donor acquisition investment.
Several Avalon clients presented at this year's 2012 Bridge to Integrated Marketing and Fundraising Conference, held in National Harbor, MD. The Avalon clients represented on these engaging panels were the National Museum of the American Indian, the National Trust for Historic Preservation, the League of Women Voters, the National Parks Conservation Association, and the Chesapeake Bay Foundation.
Given the number of questions we field about compiled lists, here are answers to some of the FAQ on the subject:
What is a “compiled list” and how does it differ from a traditional acquisition list?
Compiled lists are lists that have been cooperatively assembled from a variety of sources and contain non-unique names. The most prominent companies offering compiled lists include Wiland, Epsilon (Abacus), and DonorBase. Usually, these lists are prospective donors with a profile consisting of several transactions from a variety of non-profit and for-profit organizations, like catalogs, publishers, and retail stores, often with 20 or more collected transactions for each name, for a fuller picture of donors giving/buying habits. A traditional donor acquisition list contains names from one organization, and some of the people on that list may have only made one contribution ever – not a clear picture of that donor’s giving capacity or preference.
You never know what trends will pop up unexpectedly in acquisition programs. Recently, we noticed that multi-buyer list performance has been waning in one client’s direct mail prospecting program. A quick check revealed that this depression coincided with when we’d started using commercially compiled lists. So we did some analysis to see if, in fact, compiled list multi-buyers were pulling down overall multi-buyer performance. For this client, that turned out to be the case.
The League of Women Voters has a mature prospecting program. Like many well-established direct marketing programs, it was necessary to prepare for the future marketplace and go beyond traditional trades and exchanges. Avalon designed a modeling program to increase the League’s ROI, and give it a competitive edge in the mailbox by more tightly targeting our prospective donors.
We wanted to share with you a couple more case studies from Avalon’s MAXI Award submissions – the first is a direct mail donor acquisition test, and the second a multi-channel campaign.
While our primary objective was to acquire new and valuable donors for our client Farm Sanctuary, it was also important to know if an acquisition audience would be more responsive to tragic or cute animal images on the carrier. The control package focused heavily on the cruelty of the factory farming system and featured a bleak image of a downed pig on the carrier. Conversely, we had had much success with an email campaign featuring a cute animal.