Your non-profit organization is doing well if 85 percent of your donors renew their support each year, according to Stanley Weinstein in his book The Complete Guide to Fundraising Management.
To put it another way, you are doing well if no more than 15 percent of your donors fall away each year.
So do the math. Alan Sharpe did. If your organization has 10,000 active donors, and if 85 percent of them renew each year, then 1,500 (15 percent) of your active donors will drop off every year.
This is why you need a well-planned, annual donor acquisition program. You cannot afford to simply mail to your existing donors only. You need to replace the donors who never renew. Without a steady influx of new donors, you will be moving backwards each year, not forwards.
Alan Sharpe is a fundraising consultant with a decade of expertise in direct mail fundraising. He helps your development department run a successful direct mail fundraising program year after year. And that, naturally, includes direct mail donor acquisition.
Here’s how Alan helps you attract new donors
First, Alan discusses the rather tender subject of donor attrition. Naturally, if you are to replace the donors who fall away each year, you need to know how many need replacing. That means you need to calculate your attrition rate. Your attrition rate is simply the rate at which donors do not renew their gifts, usually expressed as a percentage of active donors.
Then Alan talks with you about why your donors are not renewing. Maybe you acquired them with premiums and sweepstakes, making them statistically less likely to give again. Maybe there’s another reason. Alan finds it, and shapes your acquisition program accordingly.
Before he crafts your acquisition package, Alan decides what you are going to mail to any new donors that respond to your appeal. That way, you avoid some costly mistakes. For one thing, you avoid acquisition methods that tend to attract more once-only donors than you care to process. Front-end premiums, for example, such as labels, note pads, greeting cards, calendars and decals, may very well boost your response rates and attract larger numbers of donors. But they have two disadvantages.
Front-end premiums tend to attract gifts that are smaller than those generated by packages that contain no premium, and they attract donors who are less likely to give again. That said, premiums may work for you. Alan will help you find out.
Next, Alan helps you find your ideal donors. As you know, the single most important factor in determining your success in direct mail donor acquisition is your list. A poor letter mailed to a great list will generate a response. But a terrific letter mailed to the wrong people will generate zero. So before you rent a list of names and drop a direct mail acquisition package in the mail, Alan works with you to examine the potential donors on your list. He makes sure they are good prospects for a donation today—and tomorrow.
In Alan’s book, potential donors need to meet at least three criteria:
- have the capacity to make a donation now
- have an interest in your cause or the people you help
- stand a good chance of making repeated donations
Last time Alan checked, there were 25,000 response lists and 50,000 compiled lists on the market. The majority of these lists supply postal addresses, but some also supply telephone numbers and email addresses.
Among all of these lists, you’ll find hundreds that work for fundraising appeals. Actually, you likely won’t find them.
Locating the best names for your mailing is complicated and best left to experienced list brokers. Alan works with these brokers on your behalf to find your ideal donors.
Package copy and design
Once Alan knows why we are writing and to whom we are writing, he starts writing. He crafts a direct mail acquisition package designed to attract new, long-term donors and members to your cause. Attracting a long-term donor from the outset is easier (and cheaper) than trying to persuade a once-only donor to give again. So, he creates a package that meets his definition
of a great acquisition piece:
Which list is best? Which ask will generate the highest revenue? Which package will generate the best response? Alan helps you test to find out. That way, you spend your acquisition budget where you know it will bring in the best return on investment.
Tracking and analysis
So, how well did you do, exactly? Alan examines your campaign results and presents to you a series of reports that describe the following:
- response rate
- average gift
- net profit
- cost to acquire a donor