Fundraising Myth Busters: Donor Acquisition

This is the first in a series of seven posts focused on busting (or validating) common fundraising myths.

Believing you know the truth about anything in fundraising without testing it is both foolish and dangerous.

Everything is NOT as consistently true as you (or I) might think it is.

Furthermore, what was absolutely true five years ago, could have changed.

The insights in this post will expose some of our industry’s most common myths and either confirm or debunk them.

My hope is that this will help you raise more money more quickly. And, it just might make you look smarter at cocktail parties too. 🙂

Here’s how we approached this fundraising myth busting effort…

  • Determine what we want to learn
  • Research what is already known
  • Develop our hypothesis
  • Test
  • Review results
  • Confirm outcomes

Myth #1

A successful donor acquisition strategy should focus only on acquiring high average gift donors.

What we know

  • The goal of acquisition is to build your donor file and facilitate long-term revenue growth
  • Most middle and major donors don’t begin relationships by making a major gift (i.e., they start smaller)
  • The more donors you have, the greater your opportunity for:
    • Annual revenue growth
    • Major and planned gift prospecting
    • Monthly giving

What we did to validate this

  • Reviewed results from multiple charities who had previously focused their acquisition strategy in favor of acquiring only high dollar donors
  • Compared those results to results from those same organizations when using a more balanced approach to donor acquisition

What we learned

  • [bctt tweet=”A balanced acquisition approach delivered DOUBLE the long-term revenue compared to the high value-only strategy:”]
    • $10-$99 donors saw a 225% increase in revenue
    • $100-$499.99 donors saw a 62% increase in revenue
    • $500-$9,999.99 donors saw a 34% increase in revenue

As you can see from these results, an acquisition strategy that balances donor value with the volume of donors acquired (even if this means you get a somewhat lower average gift) ultimately delivers more long-term revenue.

Myth Busted

5 Comments

  1. Dan Sassenberg

    Thanks for the helpful and interesting post, Andrew! I’m looking forward to the rest of the series.

    1. AndrewOlsenCFRE

      Thanks, Dan! Great to hear from you. I’m excited about the series too. Finished the last post on Friday.

  2. Gary

    Andrew, very helpful post. I’m curious, in the situation you referred to was the amount of revenue in each of the categories also significantly different (as opposed to just the % of revenue)? Thanks!

    1. Andrew

      Hi Gary,
      Yes, the amount of income in each of the levels was considerably more with the balanced approach.

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