What Fundraisers Can’t Control
The two main external factors that are affecting fundraisers today that are outside of their control will come as no surprise.
First, macroeconomic trends. The pandemic reshaped the economy and the giving landscape. While some donors experienced financial hardships, others gave more or shifted their priorities to local, community-based organizations. But questions remain about the long-term effects of these short-term changes—questions that fundraisers continue to work through today.
“I recommend evaluating the donors you acquired during the pandemic as a unique cohort,” says Cameron. “Measure the difference in their retention and long-term value compared to your organization’s typical newly acquired donor. Maintain discipline when spending on retaining these donors, but fully embrace those who show you they want to stick around.”
The second factor? Rising postage and paper costs. While these increases have put pressure on fundraisers’ direct mail programs, understanding historical trends can help you anticipate what might be coming next.
“Adjusting for inflation, the cost of first-class postage is virtually identical to what it was in 1971,” says Cameron. “The now twice-yearly boost in nominal postage cost will sting every time, but it should never be a surprise and will likely remain on pace with inflation.”
When it comes to paper costs, Cameron advises that fundraisers assume that these materials will continue to become more expensive. Fundraisers should budget accordingly, try to find ways to lower costs such as bulk buying, and test and monitor campaign performance per piece closely.
What Fundraisers Can Control
These external factors can feel discouraging. But nonprofits can control the strategies that they implement to address them. Here are three approaches that Cameron notes fundraisers can take to achieve their acquisition goals in today’s unique environment:
1. Maximize your multichannel fundraising.
Multichannel fundraising to prospective donors yields better campaign results across the board. One highly effective way to do this is through digital/direct mail co-targeting, which involves serving digital impressions to your prospects simultaneously with your mailings. This reinforcement is economical—making it an ideal strategy as budgets narrow—and pays dividends in higher campaign response rates.
2. Identify your “worst” dollar spent and optimize accordingly.
Reaching your best prospects is key to campaign success. However, knowing whom you should not invest your fundraising dollars to reach is equally important. Eliminating low-performing names or segments from your campaigns—optimizing from the bottom up instead of only from the top down—can boost efficiency and reduce the cost of donor acquisition.
3. Balance your short- and long-term goals.
It’s understandable that many nonprofit boards and executives are feeling nervous about donor acquisition declines over the past couple years. But reacting by reducing acquisition efforts for a short-term win can mean sacrificing long-term sustainability. Make sure that your KPIs both align with your short-term goals and protect the long-term health of your organization by understanding the long-term value of newly acquired donors.
Amidst today’s donor acquisition challenges, fundraisers have many partners they can rely on. By collaborating with your agency, analytics teams, and data partners, you can develop and execute strategies that can help you succeed today and position your organization to prosper tomorrow.