You can grow your donor base by using fundraising letters for donor acquisition as well as for seeking donations. Donor acquisition letters should be a key component of any long-term fundraising campaign because it is inevitable that you will lose some of your existing donors over time and you will need to replace them with new donors.
With donor acquisition mailings, you will almost always spend more than your mailing brings in. But that’s not necessarily a bad thing as long as you mailing brings in new donors because of their long term value as a supporter of your cause.
Here’s what master fundraising copywriter Alan Sharpe has to say on the topic of donor acquisition.
Fundraising Letters Should Raise Donors, Not Donations, When Mailed to Strangers
Are you willing to spend $1.25 to raise $1? To lose money to make money? You should be. Most donor acquisition mailings never pay for themselves. They lose money. And rightly so.
Acquisition letters (letters designed to acquire new donors) should be a vital part of your development program. Current donors fall away.
Some lose interest in your mission. Some lose their jobs. Other leave the country. Some die. You need to be mailing fundraising letters to people who have never supported your cause in order to replace the donors who fall away every year through no fault of yours.
But to be successful at acquiring new donors, you need to ignore one set of numbers and fix your eyes on another.
The numbers to “ignore” are the costs of getting your first donation. According to James Greenfield, in his excellent book, Fund Raising (second edition), you can expect to pay anywhere from $1.25 to $1.50 to raise $1 with an acquisition mailing. That doesn’t sound like a wise use of your resources, does it?
But with acquisition fundraising letters, you need to have your eyes fixed on the lifetime value of your donor, not the short-term value of their first gift. You need to remind yourself (along with your board members, key volunteers and inexperienced colleagues) that your goal with acquisition mailings is to acquire friends, not funds.
Let me illustrate
Let’s say you mail a fundraising letter to a list of 10,000 strangers. These are people who have not supported your organization before but might.
Assume that your costs for writing, design, production and postage come to $0.60 a piece.
Your mailing costs are thus $6,000.
Let’s say you receive a 1 percent response rate. That’s 100 gifts.
Further assume that the average gift is $30
Your income is $30 x 100 donors, namely, $3,000.
Your costs are: $6,000
Your income is: $3,000
Your net loss for the campaign is: $3,000
Are you in trouble?
Here’s what you tell your executive director. “We gained 100 new donors. And up to 80 percent of them will give again, provided we follow up properly and solicit their gifts in the right way in the future.”
Each of these new donors effectively cost you $30 each (your net loss divided by total new donors).
Are you willing to spend $30 today to raise a friend who will likely give your organization hundreds of dollars in gifts in years to come? You should be, provided you can remember that your goal with acquisition letters is to raise a donor, not a donation.
My thanks go to Stanley Weinstein and his book, The Complete Guide to Fundraising Management (second edition), for his insight into the economics of donor acquisition.
Read more fundraising letter tips from Alan Sharpe at sharpecopy.com
More Fundraising Letter Advice
How to Write Fundraising Letters That Motivate Donors – Motivating strangers to give their money away is one of the hardest jobs around. It’s difficult to do face to face. And it’s even harder to do by mail.
Successful Fundraising Letters Share Eight Qualities – If you want your next fundraising letter to be successful and effective, there are certain nuances you must master to achieve the right results.
Don’t Start Your Fundraising Letters As A Stranger – One of the things you should never do with your fundraising letters is address them to Dear Friend because it can cost you literally thousands of dollars in lost donations.
Write Fundraising Letters That Donors Can’t Resist – Master copywriter Alan Sharpe offers practical advice to non-profit groups for boosting the results of your appeal letters.
How To Write A Fundraising Letter – Advice and tips on what works and what doesn’t in donation request letters.
How To Write Fundraising Letters – Here are detailed instructions on how to write great fundraising letters, including a sample letter to get you started.
Fundraising Letter Sample Template – This sample fundraising letter template offers examples of a specific method of asking for money, including providing a quick psychological justification for a positive response.
Sample Fundraising Thank You Letter – Here are some tips on how to say thanks to your donors, plus a sample fundraising thank you letter you can copy.
Where To Find Creative Ideas For Your Appeal Letters – Creativity is key for keeping your fundraising letters fresh and bringing in sufficient donations. So, where do you find creative ideas for your appeals? The answer, surprisingly, is right under your nose.