There’s no shortage of data and punditry asserting that donor acquisition is more expensive than donor retention.
According to James M. Greenfeld’s book Fund Raising: Evaluating and Managing the Fund Development Process, new donor acquisition via direct mail can cost between $1 and $1.25 per dollar raised, while donor renewal costs are only about $.0.20 per dollar raised.
But why is this the case? Why is donor acquisition more expensive?
When I bought my first house in 2007, there was an empty flower bed in the front lawn. I went to a nursery, spent about $250 on plants and and supplied. When I got home, I filled the bed with new, vibrant plants..
For a couple weeks they looked great, but ultimately I neglected them. I didn’t water them, prune them, fertilize, pull weeds, etc. Everything wilted eventually, and I had to go back and spend another $250 to gain back that curb appeal.
This time I took care of them, and it cost very little in comparison to replacing the plants (just a little water and my time). Now, seven years later, they bloom every spring and look great (as long as I’m diligent in my care).
Gardening can teach us a lot about stewardship.
After you convince a donor (through advertising, events, direct mail, etc.) to make their first gift, do you cultivate that relationship through simple, nearly-free follow-up (like a handwritten note or a phone call), or let the relationship wilt, only to have to replace the donor entirely?
Nurturing a donor relationship isn’t easy, but it is simple in practice.
In his new book “Donor Retention: The New Art and Science of Keeping Your Donors for Life” Roger Craver shares the result of a survey to 250 nonprofits. He asked them to rank, by order of importance, 32 key drivers of donor commitment. Here were the top seven:
- Donor perceives your organization to be effective in trying to achieve its mission.
- Donor knows what to expect from your organization with each interaction.
- Donor receives timely a thank you.
- Donor receives opportunities to make his or her views known.
- Donor is given the feeling that he or she is part of an important cause.
- Donor feels his or her involvement is appreciated.
- Donor receives information showing who is being helped.
These seven items are the equivalent of watering, weeding and nurturing a garden. If you don’t do these things, be prepared to spend more money on new plants every year.