Not so fast!

If you had to choose between reaching new donors or keeping old ones, which one would you choose?

Chances are, you are looking back over results from the end of the year and wondering where you might need adjust in the year ahead.  Depending on your focus, you may be looking at how to attract younger, newer donors as older donors begin to leave the giving scene.  

Or you may be looking hard at how to maximize the income you receive from the historic, long-term donors who have been giving to you for multiple years.  Hopefully, you and your team have funds allocated this year for new donor acquisition.  But is acquisition really your best investment?

We’ve all heard the expression, “It’s cheaper to keep a customer than find a new one.”  Nowhere is this truer than in fundraising.

According to a study released by AFP and The Urban Institute and shared by Chronicle of Philanthropy, many organizations are missing the balance when it comes to finding new donors, converting them to next-gift donors and grooming them to be long term partners. 

Even though new donor acquisition is one of the most expensive investments made by nonprofit fundraisers each year, the study noted that only 43 percent of donors who made a gift in 2012 did so again in 2013.  

That is a lot of money spent on acquisition -- and a lot of money to invest in second gifts that never came!

New donors cost more to go find, and they give less until they’ve been with you for a few years.  Once they’ve stuck around with you and become multi-year donors, they are typically giving you far more money each year than new donors.  When you lose those key, multi-year donors, you lose an even more costly loss. 

In fact, the study suggested that if nonprofits simply reduced the number of departing donors from their whole file by 10 percent, they could double annual giving!

Does this mean you should stop doing acquisition and focus entirely on retention?  Definitely not.  No matter what you do, you’ll lose donors.  Replacing donors who leave is part of the healthy balance of donor development. 

The goal instead should be replacing no more donors than you ought to lose in the first place.  Replace who you must, get new donors to give again, reactivate who you can, and build the health of those who have been with you for multiple years. 

That sounds easy, doesn’t it?  Well, if you’ve been doing this work for more than a couple hours, you know it’s not always easy.  Sometimes it’s hard to know even where to begin!  

Do you know which of your donors are going away the fastest?  Do you know how to implement retention and upgrading strategies to keep your donors healthy? 

We do. And we’d love to help you with some of these answers. 

Interested in learning more about our donor development strategy offerings? Contact Michael Robison to get the full scoop.

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