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Roy C. Jones

“New, New” Donors Drive Growth and Revenue

Roy C. Jones, CFRE
Roy C. Jones, CFRE

You read it right… I said “New New Donors”.

Professional fund development executives for decades have known the importance of NEW donors.  Charities without a new donor acquisition budget are doomed to fail.

Of the more that 2 million charities registered with the Internal Revenue Service, more than 272,000 shut their doors last year and the key reason was that they did not have an acquisition program for acquiring new donors.

People who start charities assume that all the donors they have each year will just automatically “re-up” the following year and growth will happen by word of mouth alone.  Nothing could be further from the truth, every charity has an attrition rate – the number of donors who gave in a previous year, but not the current year.

A good development pro knows to first look at the attrition rate, determining how many donors lapsed in their giving.  This formula will then tell her how many new donors they need to acquire this year in order to: (1) stay the same size by simply replacing attrition and (2) grow organizational revenue by exceeding the attrition number with more new donors.

Organizations who do not have a line item in their budget for for new donor acquisition are doomed to fail…  there is a cost to acquire a new donor!  However, remember, over the next year and ultimately over the next five years, new donors will pay for themselves and net huge income for your charity.

Now, back to the “New New” donor…

For years direct response has driven new donor acquisition efforts either in the form of direct mail for the average charity or DRTV (televised infomercials) for the BIG charities.  However, today, the internet is playing a unique role in acquiring and renewing new donors.

Charities are seeing that donors who respond to search engine markeing on line and then are cross-channel marketed through direct mail are 3 to 5 times more valuable to the organization.  Even more amazing, the opposite is true.  Donors who were acquired by direct mail dramatically increase the amount they give per year if they respond on line.

The “New-New” donor is the person who gives in multiple channels to their favorite charities.  They give higher average gifts and more frequently.  Getting donors to give in mulitple channels is a critical new benchmark for increasing long term donor value and reducing attrition.

Multi-channel giving happens organically with your best donors.  If you don’t believe me look at your top 10 individual givers… I’d be shocked if your best donors give by mail once or twice; on line a time or two and at an event or by white mail.

What is new is using cross-marketing techniques to get your best donors to begin giving in multiple channels.  Charities who are on top of technology are getting on line acquired donors to give in the mail and encouraging mail acquired donors to give on line.  Of course, both groups at pushed to attend events, volunteer and recruit their peers.

Cross-channel fundraising is the key to integration.  I challenge you to go find some “New-New” donors.

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