A Cautionary Tale of Stopping New Donor Acquisition

As I’ve shared before, one of our most common analyses, sadly, is projecting what happens to a donor file’s active counts if an organization decides to discontinue new donor acquisition – after all, new donor acquisition is just too expensive.

Well, today’s graph is not a projection . . . but a real-life example of what happens to donor file when an organization stops acquiring new donors for just two years.

Figure 1: Active Donor Counts

Not sure I need to say anything else. What a total unmitigated disaster.

In just two years of not acquiring new donors, this organization’s active donor counts were cut in half.

This organization now faces the dim prospect of having to invest more in new donor acquisition over the next several years just to get back to where they were in FY17.

So unnecessary.

If you (or your client) is considering such a decision, please, please, show them this graph.

4 Comments

  1. Self inflicted damage to long term revenue growth.

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  2. Frightening stuff. Thanks for sharing this graph. I’ll definitely share this around the office.

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  3. That kind of strategy is usually driven by the finance department or the finance committee of the board. They see the expense and think very short term. It takes time for those new donors to become productive, 3-5 years. But, as you say, stop acquisition and the file will shrink. The first year things don’t seem so bad, but the second year you really feel it. And it takes 2-4 new donors to create the same value as a lost multi-year donor.

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  4. It would be interesting to see the marketing numbers in parallel to this graph. I agree with CJ Doyle’s comments that cutting donor acquisition is usually an off-balance result of a short-term focus on finance rather than long-term vision. However, my hunch (and experience) is that the culture of such an organization also disregards the more important need to spend money on marketing. Therefore, when donor acquisition is pulled, the deadly culture of expecting magic from fundraisers is fully exposed.
    Two of my mantras that you can quote:
    1. A fundraiser can only be as successful as their marketing materials.
    2. Don’t expect 1st rate fundraising results from 2nd rate fundraising marketing.

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