Fundraising & String Theory

Fundraising & String Theory

Last month at DMA-NY, the American Cancer Society presented the adverse effects on their fundraising when they pulled out of direct mail acquisition. And though they received some undeserved criticism, I for one appreciated the fact they shared their results with all of us. They didn’t have to do that. So, a tip of the hat to ACS. Here’s what we all learned: Pulling out of one media adversely affects the performance of other media. Or, as String Theory professes: everything is related. For over a decade, fundraising consultants like me have been preaching the gospel of 360 integration. Though most organizations agree with this idea, sadly, most organizations don’t practice integration. Now we have some hard data (learned the hard way) on the critical importance of integrating your organization’s messages across all media. So the jury’s in. We don’t have any more excuses. Integration now. Integration tomorrow. Integration...
How Many New Donors Should I Acquire This Year?

How Many New Donors Should I Acquire This Year?

There are two crucial questions that nonprofits are – and should be – asking this time of year: How many new donors should I acquire this year through direct marketing and How much should I spend acquiring those donors? To answer the first question in a very basic way, you should always be acquiring and reactivating at least as many donors as you are losing each year. In the example below, the organization lost 18,332 donors last year and acquired and reactivated a combined 17,402 donors for a net total of 930 donors lost from the file. So, this organization is not far from maintaining their file size, but they’re not where they should be. Eventually, over a number of years, their direct mail program (and the programs that are fed through it, like Major Donors or Planned Giving) will just die away. Of course there are other considerations in addition to the raw numbers – like the new donor gift size, the average annual value and the retention of those new donors. But, as a basic measure, every year at least as many donors should be coming in the door as going out. Otherwise, your fundraising program will gradually die out. This may mean that you need to look at your Donor Acquisition program differently or that you need to evaluate how you are Reactivating lapsed donors and what investment is allocated for both of those programs. Do you know what your Replenishment numbers...
The First Thing about Analytics

The First Thing about Analytics

As fundraisers, we plan to succeed. And to maximize our chances for success, our plans have to be grounded in empiricism. Far too often, we’ve seen inexperienced boards or EDs make up crazy revenue goals for their DDs. These goals seem to be based on whim and wish. The only thing these kinds of goals achieve is to motivate the DD to look for a new job in a less crazy environment. I’ve often said, to create a good plan for the future, you have to know where you currently stand. And nothing gives you a better comprehensive assessment of your current situation than looking at your organization’s past giving trends. Analytics’ first job is to look back with the purpose of helping you look forward. It does more than that of course. But this is where it all...
An Affair to Remember?

An Affair to Remember?

Below are two recent analyses I’ve done for different clients. The first shows the Second Year Retention for FY14. It compares retention for New Donors whose first gift was to an Event versus retention for Non-Event Donors. In this analysis, New Event Donors have a 40% lower retention rate than non-event-acquired donors. Only 20% of new Event Donors gave again in the second year at all; 80% did not give. The second analysis shows 2-year retention for FY12 New Donors to Events versus Non-Event Donors. Here, in the second year on file, Event Donors have a 43% lower retention rate that non-event donors. In the third year on file, the Event donors have a 58% lower retention rate than non-event-acquired donors. These numbers are probably not surprising to anyone who is reading this. Event donors give to the event, but they don’t give to the mission of the nonprofit and they don’t give a second gift, or even attend the event again the next year. Events can raise substantial revenue for nonprofits. But, events are NOT a path to acquiring new donors. There may be some exceptions, but that’s the rule. A deeper analytics dive into each of these individual events would certainly provide additional information about how other segments perform and year over year trends compare. So, here is the question – are there strategies we can put in place to get a second gift from Event Donors (can we make events more mission-driven, educate donors about the mission more at the event, or have better stewardship and follow up after the event)? Or are Event Donors a...