Wiland Blog

The State of Donor Acquisition in 2023

Fundraisers are continuing to grapple with the economic ripple effects of the pandemic, especially when it comes to achieving their donor acquisition goals. Fortunately, there are areas of opportunity that fundraisers can focus on to ensure their organizations’ near-term success and long-term prosperity.

By Wiland Editorial Team | May 18, 2023

Direct Mail Recipient Donating on Mobile Device

In his recent article with The NonProfit Times “The Changing Value of New Donors in Uncertain Economic Times,” Cameron Popp, Director of Solutions and Innovation here at Wiland, discussed the state of donor acquisition for fundraisers in 2023. He noted that while many nonprofit fundraisers have adapted to the economic ripple effects that stemmed from the pandemic over the past three years, many of the underlying challenges and uncertainties have not changed.

The fundraising area that has experienced perhaps the most upheaval during these past three years? Donor acquisition. As Cameron notes, the growth in new donor revenue that many nonprofits experienced during the pandemic has dropped significantly, whether because of shifting priorities or performance merely reverting to pre-pandemic levels. Meanwhile, many organizations have seen decreases in low-dollar gifts as some donors have pulled their giving amidst persistent economic uncertainty.

This all adds up to a very complex fundraising landscape as nonprofits work to achieve their acquisition goals in 2023. As Cameron notes, before assessing emerging opportunities for donor acquisition, it’s important to distinguish between the factors that fundraisers can and cannot control.

“Many factors play into your chances of fundraising success,” says Cameron. “Even when circumstances are beyond your control, you must anticipate and understand them so that you can plan for all possible scenarios.”

Before assessing emerging opportunities for donor acquisition, it’s important to distinguish between the factors that fundraisers can and cannot control.

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.