A fundraising plan contains the fundraising activities your organization will implement over a set period of time. These activities will have specific, measurable goals. The end result will be a sustainable fundraising program that provides the necessary funds to fulfill the nonprofit organization’s mission. The fundraising plan is a powerful tool for any nonprofit. Before proceeding to Part 7 in our Writing a Fundraising Plan series, please review Part 1: Planning to Plan , Part 2: Reaching Out Into the Community, Part 3: Engaging Your Board in Fundraising, Part 4: Individual Donors, Part 5: Lapsed Donors and Part 6: Non Donors and Prospective Donors.
Part 7 of our series on Writing a Fundraising Plan provides a road map for donor acquisition.
Donor acquisition can be a very expensive means of securing new donors. Direct mail acquisition rates have been declining for years and the cost, primarily due to postage, has continued to rise. Furthermore, retention rates for these donors are extremely low. As a result, boards and staff need to view direct mail acquisition as a long-term investment and have donor cultivation and retention strategies in place to manage these newly found donors.
Prior to embarking on a donor acquisition campaign, plan and implement ways to educate the community about the work you do. Press releases, newspaper articles, email newsletters are cost effective ways to reach a broad audience. To say you are the best kept secret in town is not a badge of honor. You want to be known for all the good you bring to the community.
Weigh the Cost
Donor acquisition needs to be a measured consideration of any fundraising plan. It will benefit you to explain to the board and key staff what a rate of return will look like. They often have unrealistic expectations. The reality is that a 1-2% return would be considered good. Most organizations lose money on donor acquisition. The costs are only recouped when the donors continue to donate over a period of time.
First determine if your mission would appeal to a broad spectrum of the population or to a more narrowly defined group. If your choice is a narrowly defined audience, then you need to seek ways to secure the targeted audience for your mailing. You might consider having friends and family of the organization provide names of people they believe might be interested in the organization’s mission.
Even selecting from a larger population, you still want to establish parameters so that your mailing is going to a targeted group of people. You also want to secure lists of individuals who have a better than average return rate.
Start this process by having a budget and clearly understanding your costs. You will be purchasing lists and creating one or two mailing packages. The packages may involve both design and printing costs. Postage will be a major consideration and may be the determining factor in the size of your mailing. Are you going to use bulk mail with the risk that it will immediately be tossed or pay for first class?
The best way to purchase lists for donor acquisition is to use a professional list broker. They will bring ideas to the table that you might never think of; this is their business. Most brokers are worth the additional cost.
One method of securing a list for donor acquisition is to swap lists with another nonprofit. An example would be an art museum and a theatre company. Both have lists of names of individuals interested in arts and culture. In this type of list swap an agreement is made to use the list one time only and new donors to the organization are yours to keep. It is a very cost effective way to secure new donors and to also position your name in front of a like-minded audience.
Use Your Database
Every nonprofit has names of individuals who have not given, are lapsed, or small donors with potential. Before securing more names consider creating strategies to reach each of these three groups. You do not have to purchase these names; they are already in your database. Make the most of what you have. Consider special mailings, phonathons, and small cultivation events to reach out to these prospects.
Analyze your database and see if you have a concentration of donors in a particular zip code. Ask a donor in that area to host a cultivation event in their home. Keep the event small to encourage opportunities for personal engagement.
Creating and implementing cultivation strategies using your current database could be the best and most cost effective method of donor acquisition.