One-night stands ruin your fundraising

Written by
Reinier Spruit
Added
June 02, 2012
‘Originally, a one-night stand was a single theatre performance, usually by a guest performer(s) on tour, as opposed to an on-going engagement. Today, however, the term is more commonly applied to a single sexual encounter, an example of casual sex, in which neither participant has any intention or expectation of a long-term sexual or romantic relationship.’ (Source: Wikipedia.)

I hope I have caught your attention. Sex usually does, so you’re probably still reading. In this article a one-night stand opposes the long-term focus in fundraising, which is trying to engage in meaningful and lasting supporter relationships.

It seems like many fundraising programmes are missing a long-term angle. There is too much focus on one-night stands. Or at least, lasting relationships with our supporters are not the centre of our attention which is where they should be.

Fundraising is (often) not about short-term successes. Sure, you can use windows of opportunity when you see them, but the ultimate goal is to set up a lasting relationship, which will result in more funding over time with less cost. I doubt that there are many fundraisers who would disagree with this. However, if you take a look at your fundraising programme, in many cases, the long-term focus is missing.

In direct debit acquisition programmes, our aim is to ensure that donors support the organisation for at least one year and it is vital that we monitor attrition rates for the first year. Yet I see many Excel spread sheets that exclude this information. When you take into account the percentage of donors that cancel their direct debits after the first year, your ROI can change dramatically.

Essentially, a projection of the ROI of a fundraising campaign without first year attrition rates says absolutely nothing. Often external agencies that try to pitch you a new campaign leave out these rates when they present you with the projected first year returns. And now you know why.

But, then we move on to the following years. Do you project these figures as well? It’s possible that first year ROI could be better for project A than project B. However, project B could still be a better acquisition tool if you take longer-term variables into account.

Example: the attrition rate for project A is 30 per cent in year one and then remains 30 per cent in years two and three. The attrition rate for project B from year one to three goes from 40 per cent to 15 per cent, to five per cent. In other words, after three years, project A has only 10 per cent of supporters left and project B has 40 per cent while, at a glance at the first year, project A seems better.

So, the ROI should be projected into the future (I’d say at least three years) to make sure you’re making the most efficient investment. And maybe even more important: acquisition programmes should be reported on a few years down the line. How many of your donors recruited three years ago in your direct dialogue campaign are still with you? This is the information you can use in your long-term projections.

But we can also see a lack of long-term focus in ‘warm’ campaigns. Strangely enough many fundraisers project and report upgrade or re-activation telemarketing campaigns only for the first year. Wouldn’t it be interesting to know what the effect is on the long term? Usually an upgrade campaign increases retention, but what if that is not the case for your nonprofit? And if you reactivate your lapsed donors, do you keep track of them, or do they receive the same supporter communication they didn’t find very interesting the first time they went down that road? That can’t be right…

If we don’t focus on the long term, we can’t expect supporters to stay with us for the long term. We need to make decisions right now that will be the basis for our relationship in the future. We need to gather the data to support these decisions. We need to be prepared for better and worse. Focusing on a one-night stand leads to decisions that shorten the relationships with our supporters. In fact, you don’t even start a relationship.

My guess is that in your daily life, you also prefer meaningful and long-lasting relationships to one-night stands? (You don’t need to answer this one, but I would like to hear if this article was useful for you.)

This article was originally published on 101 Fundraising crowd blog.

About the author: Reinier Spruit

Reinier Spruit has been in love with fundraising since 2001. Ever since, he’s kept trying to improve his own fundraising skills and those of others. He's also the founder of 101fundraising, the crowdblog on fundraising.

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