One and dones
I was surprised to hear some of the direct marketing “theory” going around at one of last year’s sessions at the Institute of Fundraising on the value of Incentives. Virtually all of the discussion was around the response rate and/or the numbers of new donors being recruited. There was little, if any, talk of ongoing value which, at the end of the day, is the most important aspect of any direct marketing programme – especially if those donors are costing the charity more than they bring in!
Who cares if a cold direct mail campaign gets a 3% response rate or if it recruits 3,000 new donors if 80% of them are not going to give a second gift? One and done. You can incentivise as much as you like but if you don’t recruit donors to the cause from the outset then they will give once and never again.
Further, this week at a Fundraising Workshop in Germany at which I was presenting, a so-called analyst was suggesting that we should be focusing more on “all of those thousands of 5 euro donors” and here I quote “because there are so many of them and together they all make up quite a bit of money” [ed. jaw drops in disbelief]
These are exactly the donors who are costing many charities more to cultivate than they are giving in cash. The problem is that many charities and “analysts” are not able to figure out which donors they should be leaving alone and which they should be developing.
For me, the important thing is to keep an eye on the underlying value within the donorbase to ensure that there is an ongoing – and growing – net income. This comes about by developing relationships with loyal and committed supporters, not just churning more and more gifts from one-off donors. I can guarantee that those heavy address label packs that contain gift cards will never – ever – work. The break-even point will take so long and might never arrive.
