There are many ways to explain a declining response rate with new donor acquisition campaigns. More competition, poor quality names, lower list volumes to name just three. But there’s one growing cause that fundraisers are overlooking or just plain forgetting.
It’s when someone responds to your mailer online or through other non-mail channels. You know, when they ignore your unique URL in the package and go straight to your website. All too often, these donations are claimed by the response channel, which distorts the picture and undervalues the mail campaign.
If other channels get the credit for new donors recruited in the mail, you end up making bad assumptions and invest in the wrong programs. It’s a shame to see organizations gut perfectly successful mail acquisition programs, because it puts the health and stability of the entire donor base at risk.
Bottom line, strategic decisions suffer when analytics don’t support fundraising. And those analytics specific to acquisition must include a way to match back to the original source. This simple step gives you a more accurate assessment of campaign performance, strategy tests and above all list response.
So write this in big letters on your office wall: “Always Match Back!” The cost is nominal, but the impact on future donor acquisition planning is massive. Just ask one of our clients who uncovered this hidden lode of responses from their fall acquisition.
Most calculations of lifetime donor value make no sense. I wrote about this in a paper – Making Sense of Lifetime Donor Value – a while ago, noting that when the term first entered the language of fundraising it was meant to define both aggregated annual support over an extended period of years and the probability of extraordinary giving when a capital campaign came along or when a donor made her estate plans.
One could count on the fingers of one’s hands the number of organizations keeping records long and accurate enough to support such measures and have enough free fingers for a reasonably lively riff on an eight-string guitar.
But most organizations aren’t the New York Public Library, where keeping track of things is science and passion.
Interested in knowing its return on investment in new donors, a few years ago the Library recorded bequests from 94 donors who at one time, and for some time, had been members of the Friends of the New York Public Library. Those 94 donors gave $184,844 in annual support during the various lives of their support and their bequests amounted to $16.9 million. While they were surely acquired as donors in times of lesser fundraising expense, even if we apply today’s average acquisition cost, the lifetime values and returns-on-investment are metaphorically Himalayan.
Is the New York Public Library’s donor base typical? Definitely not. There are more and less valuable donor bases, albeit undoubtedly many fewer more valuable than less valuable.
But this awesome case from the New York Public Library reminds us to ask at least two questions:
Am I measuring lifetime donor value properly? If you’re in doubt, do check out the paper.
Am I investing enough in acquiring new donors?
To request a copy of Making Sense of Lifetime Donor Value, leave a message in the comments section below.
No one understands estate giving more and explains it better than Robert Sharpe Jr. I try not to miss his conference sessions. Last time I had the chance to hear him, in the course of profiling those whose ages make them the best prospects for effecting legacy gifts, Robert used the term “geriatric fundraising.” It’s a term worth special attention as we watch donor bases age.
We ought to consider a spectrum of donor experience management on one end of which is exploitation and on the other end of which is engagement. At the center of the spectrum we could usefully put benign neglect. Then we should examine all our fundraising and donor relationship management practices, scoring each one along that spectrum.
Robert talked about some of the practices of benign neglect, like calling “lapsed” or “expired” those who have supported faithfully for many, many years but not responded in fifteen months or so, and our failing to check in on them. The tendency, influenced ironically by conventionally low and increasingly declining rates of reinstatement response and a consequential what-the-hell attitude, is to keep mailing.
It is this manner of hounding that apparently provoked the suicide of an elderly Englishwoman earlier this year. The problem, we learned, was that she was a devoted donor to many organizations and simply could no longer afford to continue supporting them.
The better, and ultimately less costly approach, is to reengage, if reengagement is in the offing, by inquiring into the wellbeing of the once loyal donor, and to do so without soliciting.
And if we really want to move toward engagement, we should take carefully into account the increasing probability that our donor of longstanding from whom we haven’t heard is in someone else’s care and suffering dementia. There are, after all, some 8.5 million Americans today suffering some degree and form of dementia, 60% of them fatal Alzheimer’s disease. That incidence is rising right in line with our aging population.