Fundraising Letters Should Raise Donors, Not Donations,
When Mailed to Strangers
by Alan Sharpe
Published on this site: August 9th, 2005 - See
more articles from this month
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? No. 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
Alan Sharpe is a professional fundraising letter writer
who helps non-profits raise funds, build relationships and
retain loyal donors using creative fundraising letters. Sign
up for free weekly tips like this at http://www.fundraisingletters.org/index.php
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