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Fundamentals of donor acquisition as told from an agency strategist

For the last ten years, the most pressing need of any of my clients has been the need to acquire new donors. More recently, it’s become my priority to optimize this activity for our agency. Clients trust us to grow their fundraising, but also to share as best as I can the opportunity in embracing this challenge and reduce fears around it.

First off, no matter your size, acquisition will be the single most important strategy within your fundraising plan. First off, small and large organizations alike need to become aware of one of their most important facts of life, attrition. Attrition, or its inverse, retention, is a natural compensation of a fundraising system. Just as there is no engine that is 100% efficient, the limit to growth of any organization is restricted primarily due to the fact that death, disinterest, and other disruptions cause donors to move on.

Each healthy organization loses 25-40% of its donor base every year

In our research, and from our portfolio of clients, organizations that have a healthy annual giving program have over 60% retention and up to 75% retention if there’s a firebrand monthly donor or sponsorship program. Therefore, each healthy organization loses 25-40% of its donor base every year. Larger organizations can build lapsed giving programs to welcome back their prodigal donors, and healthy ones can see 10-15% of its donor base return each year, but not the little guys. When you’re young or small, you need greater emphasis on acquisition than older charities in order to grow. It’s harder to grow when you’re smaller than when you’re larger. It’s not intuitive but it’s math.

If your charity is new and has 1,000 donors who gave in 2019, you’re likely to have 600 of them give in 2020. If by some magic you built an outstanding child sponsorship program, stewardship practices that rival the most thankful and personal organizations out there, and you communicate frequently about the impact those donors make through your organization then at best you’re likely to have 750 (and good on you if you did!).

So now you need to add 250 to 400 new donors – just to stay level. If you want to grow, you’ll need even more than that. And, just so you know, the older organization with 10,000 donors kept 6,000 to 7,500 donors and reactivated 1,000 to 1,500 donors so they only need to sweat about finding 3,000 to as low as 1,000 if they were doing all their annual giving strategy well. This math, and understanding that fundraising is a system with a very well defined limiter to growth, is why acquisition should be your biggest priority as a young charity, and your best developed strategy as an older charity.

What can you do about it? There are three important A’s to address before reaching acquisition. The three A’s of Awareness, Advertising and Advocacy. These are the components that make acquisition activities effective.

Briefly, your organization needs to invest in an outer circle of people. Engage in social networking in real-life and digital communities. Affiliate with membership groups so that your industry is clear about who you are. Generate a media relations strategy where your organization can become more well known regarding a particular cause.

And, while it’s nice to earn attention, over the last hundred years it’s become necessary to pay for it. Be it Facebook ads or the local paper, you’re going to have to pay to have your organization be seen. As someone who likes organizations to have a grassroots feel and has experience with posters and church flyers, my go-to has been transit shelter ads.

Lastly, advocacy programs. Your organization stands for something, be it vulnerable or displaced people, access to education or environmental care. You need to make it clear that other people that stand for that same something can stand up 

for it together with your organization. Volunteer programs are one way for someone to take action to show their mission and values alignment, but it could as simple as filling in a pledge form.

Now, you’ve understood how many donors you need to acquire to grow, and you’ve built your AAA team, it’s time for the big show. This is what I would view as the fundamentals of an acquisition program. Remember it’s about the cause, not the charity. The one thing we know about the people we’re talking to is that they’ve never given. First, let’s get to the ask. The ask is your brand promise. As a charity you can have more than one (something a more advanced fundraising program needs) but it must be simple, clear, and definitive.

$5 provides this verb for this noun

The price should feel like an easily solvable problem,- “$5 provides the verb for this noun“. The verb can be an opportunity, an outcome, or an event. The noun needs to be a person, human or animal, or place and cannot be the charity.

Next, you need to think about who you’re trying to reach. I fundamentally believe all people are born to be generous givers. Some of us are more natural spenders, and savers, while a few are naturally generous but it is a skill everyone can learn. This is why marketing for charities is different from selling goods. Buyer intent is not relevant. Everyone benefits from becoming more generous, it’s just there’s life events that are more likely to lead us to be generous humans, namely, wealth, empathy, and loneliness. Young, entitled, and connected people aren’t preconditioned to be generous.

Finally, the how! I’ve tried to focus on the principles of why it’s so important to create a strategy and tactics here, but I’ll share some of the tactics we use. You’ll need money to invest in rather expensive feeling fundraising. This isn’t an article about how to find the initial money you’ll need to get building your donor base. Most charities have a pool of highly committed donors they start with, and you’ll need to convince your board that money needs to be invested in growing your donor base.

Digital advertising should be focused on lead generation, in other words, ask for an email address, not a gift. But if you must, build a compelling ad, usually on Facebook, design a landing page that reinforces the message and lead to a donation form that’s extraordinarily easy to use.

In print, you have to content with postage costs and scalability. If your budget is tight, you’ll struggle. Free standing inserts in newspapers are a common method for cheap production, but yield response rates ranging from 0.05% to 0.3%.

Sending unaddressed mail and targeting postal walks is a good way to invest for charities that serve the community those donors live in and Canada Post offers deep discounts on its postage for unaddressed mail. Responses for us range from 0.15% to 1%. Finally, rental lists do something magical to the problem of communicating to non-donors – while they don’t know you, you know them. By paying a fee to rent a mailing list you’ll be paying the regular postage rate, and a fee to borrow the contact information of the would-be donor, but you’re now able to address the recipient personally. Responses for us range from 1.5% to 3%.

Every single organization needs a strategy for acquisition.

It needs to be a very high priority in order to maintain, and the most important priority to grow. It’s not magic, and the advantage goes to older, more established charities, but it’s achievable for any organization that prioritized accordingly.

Ben Johnson is the Lead Strategist and Founder of Frontier Marketing, a fundraising agency based in Victoria, BC.

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