Light Bulb with Plant Growing Inside Kevin Hawley

Barefoot Insiders

I wish someone would have told me...

Fundraising is not a talent or intuition or a personality type.

Fundraising is a science with just a bit of art thrown in.

I’ve been thinking a lot about creativity. In my role as an in-house “creative director,” I lamented the complete lack of creativity from my agency. When they presented three of my team’s creativity ideas as their “new” package of direct mail, frankly that was the straw that broke the camel’s back.

So Barefoot Creative became a reality.

BUT… creativity is not all about pictures, lines and fonts. Creativity is taking a challenge and looking at it from all sides and solving it. Creativity is about segments, testing, curiosity, best practises. It’s about divergent thinking – going against the crowd.

But you can only do that when you are intimately aware of the crowd.

One of the biggest challenges faced by non-profits is acquiring new donors. It is d*****d hard work. Sometimes it feels like you are burning money in your quest for just a few donors. And I get push back about investing in acquisition all the time.

There are 3 myths—dangerous myths—that are seeping into organizations as I write:

1.  Cutting acquisition will give me better rations

2.  Invest in “high-value donors,” don’t waste money on low value donors

3.  Reduce revenue-producing programs to meet revenue shortfalls

And I hear this all the time.

Stop the myth.

The truth:

1.     Sure, in year one, cuts in acquisition budgets will look good on the bottom line. But in 5 years? It will be devastating. The downward slope on your revenue chart over 5 years will be terrifying—and it’s possible your board will forget the directive to reduce acquisition budget. 

Look, there is no easy answer for increased revenue. You need donors. You need monthly donors, program donors, middle donors, high-level donors and legacy donors. If you start with 10,000 and your annual donor churn is 20%, in 5 years (without acquisition), you will be left with 3277 donors. 

Buy into the acquisition myth? You’ll hardly notice it in year 1. But after 5 years, the impact on revenue results in a precarious future.

Be prepared for your board to ask you about percentages. Acquiring a new donor is costly. While the numbers vary, in general, the cost to acquire a single gift of $25 is about $120. The cost to acquire a monthly gift is about $650. Big investment. I get it. But by NOT investing, your organization will slowly die.

 

2.     “High-Value donors” are not a myth, they are a reality. Very wealthy and very generous people provide huge percentages of the budget. I get it. BUT…. Wait a minute. How many donors give $100,000+ gifts? It’s a small slice of the public. There is huge power in the ordinary person. $1 a day, given by 10,000 people (0.02% of the Canadian population) is a annual revenue base of $3,650,000. That’s the success of the Red Cross, World Vision and Plan International.

High-value donors are important, don’t get me wrong. It is not either/or. It is both. Do not allow a high-powered major-gift consultant lull you into putting all your eggs into one basket. Because it that basket breaks, you have nowhere to go.

 

3.     “We can’t afford to do direct mail anymore.” If your direct mail is producing more than a 2/1 investment, you can’t afford NOT to do it. I don’t have any clients whose direct mail program is producing such low results (cultivation-wise), but I do have clients who have cut direct mail to address revenue shortfalls.

If you are short revenue—do MORE. If you are $100,000 short, spend the money to raise the needed revenue (and use the phone, social media and email to boost results). Even at a 2/1 ration, you will double your money. Yes, you need to build a stronger donor base to boost the ration, but you are multiplying your investment. 

Fundraising is not for the faint of heart. It is exhausting and exhilarating.

 

 

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