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A Gardener Explains Why Donor Acquisition Is So Expensive

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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:

  1. Donor perceives your organization to be effective in trying to achieve its mission.
  2. Donor knows what to expect from your organization with each interaction.
  3. Donor receives timely a thank you.
  4. Donor receives opportunities to make his or her views known.
  5. Donor is given the feeling that he or she is part of an important cause.
  6. Donor feels his or her involvement is appreciated.
  7. 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.

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