It’s not as crazy as it seems.
In challenging times like these, making bold moves in fundraising can feel like paddling upstream, but it’s a strategy that can set you apart. Soon, you’ll appreciate just how smart you were to take that approach.
Last week, we discussed the importance of continually prospecting for new donors—especially in tough economic times. John Davis’ amazing example at the Leadership Institute provided a compelling “why” for this strategy. Today, let’s dive a bit deeper into the “what” and how you can apply it to your own fundraising efforts.
Why Donor Acquisition Is Key
Donor acquisition is an engine that creates long-term value. As John Davis has said, done well, donor acquisition will drive your organization forward for decades to come. The Leadership Institute’s strategy of systematically acquiring donors is a prime example. They invested in acquisition efforts, and the returns have been transformative.
Since revamping their prospecting efforts in 2012, the Leadership Institute’s donor revenue from direct mail has increased by $15 million—an extraordinary return on investment.
This brings us to a crucial point: Donor attrition is inevitable. Donors move on for various reasons—shifting priorities, financial setbacks, or simply losing interest. That’s why you must continuously replace lost donors to maintain and grow your revenue.
How to Build a Smart Acquisition Program
If you’ve been hesitant to launch a robust donor acquisition program, you’re not alone. I’ve heard plenty of concerns:
- How do I find good lists?
- We’ve tried it, and it didn’t work.
- We lack the resources.
- I don’t have the time or talent.
- The board won’t approve it.
The good news is that these challenges can be overcome. John Davis offers a valuable piece of advice: Focus on maximizing lifetime value and tune out the noise.
Instead of searching for magical new techniques, start by understanding the lifetime value of your donors. If you’re already generating healthy lifetime value, focus on increasing the number of donors. If not, dig into what might be going wrong.
Navigating a Recession
With a potential recession looming, it’s easy to get spooked. But here’s what John advises: Avoid the temptation to overcorrect. Every recession is different, and reacting too quickly can cause more harm than good. Instead, focus on your data. It will guide you through periods of volatility and help you make informed decisions.
Kathleen Patten and Carsten Walter have both emphasized the importance of sticking to your mission and leaning into your brand during uncertain times. Donors are more likely to stick with organizations they believe are doing the most important work, so make sure your messaging is clear and resonates with your supporters.
The Importance of Acquisition During a Recession
Recessions can cause long-time donors to reevaluate their giving habits. If your organization doesn’t make the cut, you risk losing those donors for good. That’s why investing in a broad base of direct response donors is crucial to weathering tough times.
John shared a powerful insight: the real damage during a recession isn’t the short-term loss of revenue, but the long-term impact of losing donors who would have otherwise supported your organization for years to come. Following Morton Blackwell’s principles for acquisition can help recession-proof your organization.
Seizing the Opportunity
The key to navigating any challenge, including a recession, is you. As John Davis and others have pointed out, the future of your organization isn’t predetermined. You have the power to create it by leaning into the very forces that cause others to hesitate.
By embracing smart donor acquisition strategies and focusing on long-term value, you can paddle upstream with confidence, knowing that the challenges you face today will set the stage for incredible growth tomorrow.
