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Fundraising Basics -- Acquisition: Adding fuel to your Non Profit Engine.

By Edited Sep 30, 2015 1 0

Just getting your charity or membership organization off the ground?

Essentials for Acquiring New Donors to Fuel the Engine.

"I'm starting a charitable organization to help people in need.  Why is it costing me money to find committed supporters?"

This is the dirty little secret of anyone who has taken up the challenge to begin a charitable organization or other noteworthy initiative requiring a membership.  And one they just as soon not talk about with ease because it is a hard pill to swallow.

That's right.  You've heard it before.  It takes money to make money.

As you sit down to plan out the grand aspirations for how you will "change the world," it is with the utmost importance that you settle on one figure.  That being how much you are willing to pay for the name of a new supporter of your mission.

After you have gathered the names of all of your friends and those folks at church who want to join with you to solve the problem "wreaking havoc on society" you are going to need to begin acquiring new supporters to re-solicit for income.  These new "names" you will want to contact are not free of charge.  Other "like-minded" organizations that you choose to partner with to solve the problem are going to charge you for the use of their names because they had to do the same.

Take this point to heart.  Don't look at this expense on your financial statement as a burden but one of aspiration and optimism.  These fresh and newly excited individuals (or companies) who have declared support for your cause are an investment that will pay off for years down the road.  They may not help you restock that food pantry in year one of coming on board but in years two through ten they will have played a huge role in building the network of trucks that will feed entire towns in times of emergency.

This is what you wanted.  This is the long-term dream.

We are talking about finding the net value of a new donor.  There are several ways to factor this but one easy way is to add up the number of new contributors who gave to your organization between 12 and 24 months ago.  Then calculate the total amount of money contributed by these donors during the most recent 12 months.  Take an estimate of the cost associated with soliciting these donors over the past 12 months.  Subtract this cost estimate from the total contributions to get an overall net revenue number.  Finally divide the net revenue by the total number of donors you came up with in the beginning.  This gives you the average net revenue per donor.

This number will be a negative most likely, a cost to you initially.  Once you have this cost to acquire a new donor you will want to make some determinations about what your goal is going forward.  Are you interested in short-term net income or a larger long-term net income?

You will need to then begin reviewing the "list source" from which your new supporters have come from to begin determining if certain lists are viable for re-soliciting for more new names.  If a certain list shows a cost to acquire a new donor is greater than what your average cost per new donor (calculated above) to be then you will want to stop soliciting that list unless you have a new message or medium to go out to the list again.  If the list show a net per donor of less than or equal to the overall average cost to acquire a new donor then by all means request that list again for more new names.  Again, those names will pay off in later re-soliciations that will pay off the initial cost of them coming on to your file.

Just a final note, you may want to dissect your collection of new names acquired over the past year into two groups.  One group for donors who gave you a higher initial gift (ie. $25+) and another group for initial contributions lower than that.  The first group could be considered more "valuable" to you and would "pay off" that initial cost quicker and therefore net you a greater sum sooner.  The other group may call for a lower cost way to re-solicit your new names to get the most out of them.

Obviously there are many more questions to answer on this subject and further treatment of your new supporters.  I'll do my best in subsequent articles to do just that.  Feel free to post any questions for details or if you would like me to speak on other related topics.  This method of acquiring new supporters works for all types of marketing to mass groups.

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