How do not-for-profits find donors who are interested in their cause?
I’m always excited to talk about this because it gives me the chance to showcase direct marketing for what it does best. Direct mail, telemarketing, canvassing and e-marketing (assuming you can come up with a list of prospects with current email addresses), are superb at “sweeping” the marketplace and identifying potential donors who, through luck and circumstance, are now ready to give to your organization for the first time. Direct marketing is designed for acquisition and nothing does it better. It is thanks to direct marketing programs and the hard-working professionals who manage these high volume appeals, that participation in philanthropy has grown to 80+% of American households.
While excellent at donor acquisition, direct marketing programs are not good at donor retention relative to other strategies available to fundraisers today. That’s not because direct marketers are not doing their job well; it’s because not-for-profits are forcing them to use programs for retention and profit generation that were only designed for acquisition. Frequent solicitations coupled with a thin message that repeatedly sells the brand, works to get donors in the door; the same characteristics then drive donors away. Once this is understood, it becomes easier to see why every type of fundraising has its place, but also why no individual approach works indefinitely.
What inspires donors to make a second gift?
I know this is a crucial issue with fundraisers because the attrition rate between donors’ first and second gifts is so high. When I first started measuring early attrition ten years ago, 50% of first-time donors never made a second gift; now it’s 65%. In many studies Cygnus has conducted, donors have spoken with one voice about what would cause them to stay loyal longer.
Non-donors (prospects) who consider your direct marketing appeal have no vested interest until they become donors. Once they write that first check or give you their credit card number over the phone, however, they are transformed from “interested observer on the outside” to “inside investor”. The value of the gift they first make is irrelevant; it’s the fact that they gave that makes them an investor in your organization. All investors seek return on investment, and in philanthropy that means “getting measurable results on my gift at work.” Since most first-time donors give modestly, common fundraising practice is to withhold this vital information until they give more generously, so as to make the charity’s investment in donor communication cost-effective. But this is the worst possible decision. Unsatisfied as investors and showered in more appeals, the majority of donors simply stop giving.
Cygnus’ research has consistently found that donors’ unease can be alleviated and they can be inspired to give again and give more generously in much larger numbers than is currently being experienced in fundraising. Their demands are few and reasonable, but also essential. They expect to be treated in a donor-centered way – acknowledged promptly and in a heart-felt way for the gifts that they make; have their gifts assigned to specific programs or services, narrower in scope than to your mission as a whole; and, later, provided with measurable results on their gifts at work.
Over 70% of donors give modestly at first, waiting for a signal that a bigger investment is warranted. It is up to you, early in the game, to let them know that they will not be treated like file numbers and gift amounts but like the important donors that they are and the major philanthropists they could become.
In the 2011 Cygnus Donor Survey, Penelope Burk will be asking some exciting new questions, including how social media impacts donors’ giving decisions. It’s not too late to join their group of survey partners and get the national report free of charge, as well as a guest pass to a webinar that I will conduct exclusively for partners as soon as results are available.
Good luck in your year-end fundraising, and if you have a burning question that our research may be able to address, Penelope would love to hear from you.
Season’s greetings from everyone at Cygnus.
To read more go to Burk Blog at www.burkblog.com