The Chesapeake Bay Foundation's donor acquisition program was performing so poorly a few years ago that at one point officials decided to stop the program. After a year of testing and identifying the problems, the program was reinstated, and now it is performing at three times its previous level.
The 30-year-old nonprofit organization, whose purpose is to preserve the Chesapeake Bay, has a donor base of 83,000. Mary Jo Dickinson, director of membership fundraising, said the problems stemmed from use of the same direct mail package, no testing of any new programs and list fatigue.
Greg Fox, president of the marketing division at direct marketing consulting firm TheraCom, Bethesda, MD, worked as a consultant for the foundation. He said that even though it may initially seem like a good idea, stopping prospecting is not the answer.
“The worst thing to do is to stop,” Fox said. “I have worked with groups large and small and watched their leadership decide to put an end to prospecting. The cut in cost looks great at first, but in the long run they end up paying for it. It's hard to reverse the effect it has, and it's just as hard to get back to the level you were previously at.”
According to Fox, it is standard for nonprofits to lose 50 percent to 60 percent of their first-time donors a year. That alone should be reason enough to invest in an acquisition program, he said.
The Chesapeake Bay Foundation took a two-step approach to getting its program back on track. It devised a list strategy to help identify its target audience and then produced a number of new direct mail packages.
“The first year after the program was shut down, our efforts focused on trying to get the donor lists back in shape,” Dickinson said. “We tracked the lists and then created categories to put them into and then compiled them.”
The next step was to identify a strong direct mailing package, she said. The foundation first mailed its old packages and waited a few weeks to mail its redesigned pieces. Dickinson said that a note-card package, a front-end premium package and a nonpremium local community drive package increased donor activity the most.
“By doing this, it provided us with some important data about the packages and our donors,” she said. “That is one of the keys. You have to listen to your data and track what it tells you. That works better than following your gut most times. In just under two years, we were able to go from a response rate of 1.5 percent to just about 4 percent.”
“The first thing that people should realize when they are considering an acquisition program is that they will most likely lose money the first year,” Fox said. “They need to look at what the long-term effects would be if they didn't have one as opposed to if they did. They need to determine how much they're willing to lose and how long they're willing to wait to recoup that loss. If an organization — whether large or small — is dedicated to having a direct mailing program, they need an acquisition program. It allows them to grow from one year to the next. If they don't, that donor file will bleed to death.”
Chris Cleghorn, senior vice president for direct marketing at the National Easter Seals Society, Chicago, agreed.
“I really think that you can't afford not to have one [an acquisition program],” he said. “It's a part of the fundraising process that helps an organization build its net revenue and network of donors.”
Easter Seals, which provides services to people with disabilities, has a donor base of 5 million, Cleghorn said, and brings in upward of 800,000 people a year through its acquisition program.
Dickinson said nonprofits must be patient and wait to see results from such programs.
“At the end of the first year, we didn't see any success dollarwise,” she said, “but what we were able to learn from it is what helped turn it into a successful program.”