The Profitability of Restraint

Donor Acquisition • Views: 4918

Part I of a two-part blog on whether street fundraising makes a valuable contribution to fundraising or just gives donors another reason to turn away

There has been a spotlight on street fundraising lately — lots of media attention, tweets and blogs, and especially an interesting series of articles by relationship fundraising expert, Ken Burnett.

There are pros and cons to street fundraising which I explore in Part II of this blog. But what seems to be missing in all the discussion on both sides is context. Assessing the merits and deficiencies of a single fundraising program in isolation makes it too easy to ignore the overriding issues that matter to donors and too tempting to minimize the problems that are limiting fundraising profit.

Your Silent Partner Is Drowning in Never-Ending Appeals

Donors make their giving decisions in a fundraising world in which all kinds of appeals from all kinds of not-for-profits are coming at them simultaneously. They form opinions about street fundraising — or direct mail — or telemarketing — or pledge-a-thons — in the context of the full impact that all charities’ fundraising efforts are having.

To put it bluntly, donors feel bombarded, and their giving patterns reflect their growing frustration. Today, over-solicitation ranks first among reasons why donors stop giving. More than 90% of donors who start giving to a particular charity stop giving within five appeals, and 65% of those who make a first gift never make a second. Getting donors to give for the first time is expensive; so the only way to make fundraising profitable is to retain donors long enough to overcome the high cost of their initial acquisition.

It is much more important for fundraisers to bring donor attrition under control than it is to come up with yet another way to get more donors to start giving. Fundraising profit is not improved by acquiring more and more donors through costly and hard-hitting appeals; it is improved by retaining a reasonable number of donors longer and by securing significantly more generous gifts from them over time.

Not-for-profits need to put their considerable talent, along with their time and budget, into the aspects of fundraising that donors agree are exemplary and which deserve much more attention. That includes major and planned gifts strategies and the sensitive and respectful stewardship that makes those hugely profitable gifts possible. That includes supporting leadership volunteers who step forward and ask donors for gifts in the knowledge that influence out-performs any fundraising strategy that paid professionals can deploy. And, that includes restraint.

There is much more money to be made by holding back, by giving donors time to think, and by providing them with the measurable results of gifts they have already made before coming after them again. This thoughtful approach causes donors to want to stick with you, to want to get closer, to want to give again and to want to give more generously. Restraint, not over-solicitation, is the key to a more profitable fundraising operation.

Part II: Street Fundraising: Is it Worth the Effort? – You will be surprised about the conclusions I draw and the advice I offer.

 

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One Response to The Profitability of Restraint

  1. Megan says:

    I think many of us would like to see the data behind the assertion that mailing donors less results in increased gross and net revenue.

    Thanks.

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