The Numbers Are In!
Target Analysis has released its 2008 3rd quarter report …the Index of National Fundraising Performance, - which includes 37 million donors, giving 68 million gifts. The report focuses only on direct response fundraising with direct mail being the main source of giving, but also includes web, telemarketing and face to face canvassing. Gifts over $5,000 are excluded.
Once again, to no one’s surprise, the numbers show a decline in donors, but an increase in revenue obtained per donor. The main decline is in the low acquisition rate of new donors. Loyal donors have, and will continue to be, the ones who make a difference in an organization’s bottom line.
Direct response donors have been declining over the past 5 years … for a possible variety of reasons. According to the report, these include a declining DM donor population, economic and generational profiles, attitudes about giving and an increasing focus by organizations on major gifts.
So - in which way do you invest your limited organizational resources? Should you drop investment in direct response programs … invest only in major gifts, cause marketing, foundations, and planned giving? I would argue that you need to continue to spread your investment. If anything, what this report shows is that organizations that invest across the board are feeling the least impact from the current economic crisis.
This is not a time for the timid … nonprofits should look at continued investment in all direct response vehicles … including acquisition, cultivation and second gift strategies. Why?
To quote my good friend and Direct Response guru extraordinaire … Roger Craver:
“If an organization truly understands the source of its gifts and understands how the process of upgrading over the years truly works (in spite of what most organizations or consultants do), they would be willing to pay far more for the right type of newly acquired donor. Why? Because in virtually all organizations a significant portion of the major gifts spring from the ‘small’ gift programs and so do significant numbers (although not the majority) of bequests. And when these riches are imputed back to acquisition costs, the return on investment is terrific.”
I couldn’t say it any better myself!
Regards,
Sue
