New money or old?

Charities need to start waking up to the necessity of investing in long-term major donor relationships with existing donors instead of running after new ones. At the risk of using that hackneyed expression involving fruit, why would you get a ladder and climb to the most difficult, dangerous and out of reach part of the tree when you could pick the ripe fruit from the lower branches? It just doesn’t make any sense.

So, in the same way, why do so many charities put their efforts into finding new major donors and not spend their money and energy in cultivating existing donors? Rather than do major donor events or hold dinners or create major donor ‘clubs’ most of which are either directed at uncovering new donors or speaking to a group all at once, why not concentrate on developing one-to-one individual relationships with each donor? By figuring out what their interests are and how they want to interract with your charity, the returns will be greater and donors will most likely give on an annual basis for a number of years.

In my experience approximately 80% or more of a major donor caseload originates from the direct marketing pool and those donors when cultivated give increasingly large amounts. Very many of these donors start giving at relatively low amounts, even as low as £50, but over time they will become investors in your cause. These donors are much more likely to give and to continue to give than wealthy donors from a prospect list who may have the ability to give but have little or no propensity for doing so.

One charity file I recently analysed had 500,000 donors on the direct marketing file and fewer than 200 major donors. Their answer: go to the City to try and find new donors! What about developing all of the potential donors that are hiding in that large dm file first? When that has been exhausted then go and look for new ones.