Non profits like to imagine El Dorado — a city paved in gold-laden new donors.
In meetings when people evoke the El Dorado myth and ask “how do we tap into xxx market to find new donors?” I often reply, “How are we treating the donors we have?”
It’s easy to get bored with what we have — to seek out the new and shiny. But ask explorer Gonzalo Pizarro how that turned out. He’ll probably tell you El Dorado is a myth.
If non profit retention rates were sky-high, then I’d say — yes, in order to grow, we have to find that El Dorado. But we aren’t there yet. Retention rates are in the toilet (about 40%) and according to Target’s Q2 National Fundraising Performance Index revenue for the first half of 2013 is essentially flat with the number of total donors declining. Declines in donor numbers have been driven by declines in new donor acquisition — a trend that we’ve seen for more than seven years.
In spite of continued donor declines, revenue has remained flat because of increases in revenue per donor — which might be the result of organizations seeking to maximize revenue by focusing efforts on higher value donors. This is smart. New donor acquisition is costly and difficult. Treating our current donors well can help us weather the storm.
I know non profits need to think about donor acquisition. But my philosophy is to first invest in treating your current donors well. Excellent customer service – check. Targeted communications – check. Great storytelling and visuals – check. Then, get those donors to donate again and to spread the word about what a remarkable organization you are.
This can help you get off the acquisition hamster wheel — buying bulk names with 95% of them never converting. Man, my hamster legs are tired already.