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Sunday, January 21, 2018

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Where are all the good donors?!?
Jack Doyle

February, 2011

We’re finding them. But we’re looking hard for them and that hard work is paying off for many of our clients. Here’s one example…

The list universe of prospective donors from nonprofit list owners has been declining for some time, and added to that, most of the list owners withhold the names and addresses of their better donors (some do not rent or exchange donors of $50 or more, some might go up to $99 but will restrict you from the $100 or more donors). 

The point is… if you want to find households willing and able to give YOU $100 or more, you’re not going to find many of them from the traditional donor response lists.

First, you need to maximize the use of response lists and cooperative lists of responsive donor households such as the Target List Co-op. They’ve increased the upper limit on whom you’re able to rent/exchange.

Second, understand which lists produce the higher average gifts so they can be evaluated for mailing a second time.

But most important for finding new opportunities… we follow the money. We work with our modeling partners to identify households not found from traditional list sources that are above average in wealth.

Does this really matter?

Here’s an example of a recent new donor prospecting campaign that generated about 5,000 new donors and $240,000 in gross income… that equates to an average initial gift of $48. How did they do that?

  • $127,000 of it came from 700 new donors of $100 or more – so one in seven new donors accounted for over half the income.

  • The makeup of the prospective donor population was what you might expect… less than half of the net names mailed were actually from donor response lists:
        o Donor response lists = 40% of the net names mailed
        o Modeled households = 40% of the net names mailed
        o Multibuyers = 20% of the names mailed

  • What happened to the response rate?
        o Donor response lists were 6% better than the overall rate
        o Modeled names were 8% below the overall response rate
        o Multibuyers were 2% better than the overall average
        o Not a big difference to produce 5,000 new donors

  • What about the overall average gift?
        o Donor response lists produced a $40 initial average gift
        o Modeled names produced a $57 initial average gift
        o Multibuyers produced a $50 initial average gift
        o Why? A larger percentage of Multibuyers/Modeled matches

  • What about those 700 new donors of $100 or more? Well, we did NOT find they were distributed 40%/40%/20%.
        o Donor lists produced 210 of them or 30% ($179 average)
           ♦ Between $35-$36,000
        o Modeled names produced 315 donors or 45% ($181 average)
           ♦ About $57,000 of new income
        o Multibuyers produced 175 donors or 25% ($167 average)
           ♦ Between $29-$30,000

We’re talking about prospects here, not long-standing loyal donors. So you’re not going to see the 80/20 rule apply to their giving. Being able to inspire 15% of your new friends to generate more than 50% of your new income (50/15) is a good benchmark. 

Renewing the income attributed to the higher-level new donors will be more reliable and you’ll enjoy a higher ROI from the entire investment in new donors. 

These 5,000 new donors will generate a lot of subsequent giving for this client, especially because of these 700 new friends at $100+.

Why do we know this? Look at what happened this year from the total yield of new donors from the year before…

FY 09 New Donor Giving Chart

  • Majority of the donors gave less than $50 in first year of giving
  • Substantial giving attributed to $50+ donors in FY09
  • Majority of second year income attributed to $50+ donors
  • Two categories of new FY09 donors (on left) have generated more than $250,000 in total revenues during the first 24 months of lifetime giving

And this is what prospecting for new donors all about… finding donors who will help again and again… at significant levels of annual support. 

Care to discuss?
Let's talk at the 2011 Washington Nonprofit Conference.


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