It’s ‘Back to Acquisition’ Time!

When everyone else is thinking “back to school,” wise fundraisers are thinking “back to acquisition.” For most nonprofits, the fall is a critical time for raising funds and for acquiring new donors. Hopefully you have been acquiring them all year, and cultivating new donors to ensure they give again (and again), but the fall provides a great opportunity to get additional donors on board before year-end.
Generally, acquisition is not a money-maker. It can take months before the donors you acquire “break even.” Short-sighted boards and managers can see this as a bad investment, suggesting you instead put your money into more profitable endeavors. But since attrition (the gradual loss of donors due to disinterest, change in financial circumstances, death, etc.) is a fact of fundraising life, acquiring new donors is critical to keep your organization alive and growing.

So, get ready to invest in some acquisition this fall – but first ask yourself these three questions.

1. How many donors do I need to acquire?
While “as many as possible” sounds like the right answer, it’s actually a little more complicated than that. Bottom line, to stay even, you have to replace all the donors you lost to attrition. To grow, you need to replace all of those and then add more.

Figure out how many donors you are losing a year, and how many you are acquiring through events, your website, referrals, organic growth and other sources. Often, the first number (donors that attrite) is greater than the second. The difference between these two numbers is the bare minimum you need to acquire to stay even.

2. What strategies will bring in more?
There are some strategies that acquire more donors than others, but they have some “baggage,” so you want to think this through carefully. For example, offering a premium (a small gift in exchange for a donation) or a freemium (a small gift that is mailed with the appeal – address labels or note cards, for example) is usually a good way to get a higher response.

You may also choose an offer that brings in more gifts, either because it is more attractive than another offer or easier for the potential donor to visualize (i.e., feed a child vs. provide psychological counseling to a teenager), or because you gave it a low price point (i.e., feed a child for only 50 cents).

3. Can I afford to cultivate the donors we acquire?
So, here’s the downside to the options you considered in Question 2. If you choose premiums or freemiums, your initial cost will probably be higher, and you may acquire donors who are really not interested in your cause, but wanted the gift (or to not feel guilty using the freemium). Can you continue to offer premiums or freemiums to keep them engaged? I once worked for a nonprofit that essentially ran a “book of the month club.” The title we offered had a significant impact on fundraising response rates, so I was constantly looking for the next great book to offer.

Asking for a smaller initial gift may lead to new donors who are conditioned to give small amounts. Continuing to cultivate a $5 donor will quickly eat up your budget, and your overall net income will decline as you send out more solicitations and get smaller average gifts.

Acquiring donors by inviting them to support your most exciting program could create a group of supporters who are only committed to a program that is not central to your mission, and who are disinterested in the bulk of your work.

These three questions aren’t meant to discourage you from efforts to acquire new donors this fall. After all, donor acquisition really is a life-or-death matter for a nonprofit. The purpose of considering these questions is to lead to the best answer for your organization. What can you afford to do? (“Nothing” is not the right answer; that’s a ticket to obsolescence.)

It seems “compromise” has fallen out of favor, but the fact is: You will have to compromise in your acquisition program. Just be sure to ask these three questions first so you decide on a compromise that you – and your organization – can live with.

Originally published in NonProfit Pro.

Author: PJBarden

With a professional career in strategic fundraising that spans more than 35 years, Pamela brings a wealth of experience and knowledge to working with nonprofit organizations. She specializes in writing fundraising copy, grant proposals, P.R. materials, instructional articles and blog entries, as well as developing and executing fundraising strategy for her clients. Pamela is a Certified Fundraising Executive (CFRE); an instructor for UCLA Extension School’s Fundraising Certification Program and the University of La Verne, College of Business and Public Management; a frequent webinar speaker; and author of two online courses for UCLA Extension. Pamela earned a Doctorate of Business Administration in 2015; her doctoral project (dissertation) was entitled “Nonprofit Organizations’ Awareness of and Preparation for Legislation, Regulation, and Increasing Scrutiny.” She is a past winner of a Gold Award for Fundraising Excellence and an ECHO Award from DMA; recipient of a Distinguished Instructors Award from UCLA Extension; a weekly columnist for NonprofitPRO (formerly Fundraising Success); and a monthly contributor to Blackbaud’s blog, npEngage.

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