Finding new donors, or donor acquisition, is essential to your fundraising efforts.

We all know nonprofits make money on donor renewals. Still, you must acquire, retain, and reactivate enough donors to offset donor attrition and grow the house file to increase gross revenue.

Why is donor acquisition important?

The acquisition cost is an investment in your fundraising program’s long-term sustainability, allowing you to reach new, fresh prospects. Without recruiting new donors, your donor base will dwindle through attrition. On average, a nonprofit can lose up to 40%, sometimes even 50%, of its donors yearly.

When to invest in donor acquisition

The end of the year is a great time to invest in just about everything regarding fundraising. Typically, end-of-year conversion rates are much higher because it’s the giving season. That’s because there are tax-deductible donations to be had. So reserving some acquisition budget for end-of-year campaigns is always a good idea.

There are lots of good acquisition opportunities in the fall. It’s always a good idea to run ads to create a buzz in October and November. They may not convert just yet, but maybe they’ll search for you after being served in another advertisement as part of an end-of-year effort.

How much should my nonprofit spend on acquisition?

To plan your budget for acquisition, start by identifying these four key things.

• How many donors do you think will lapse during the year? 
• How many will you ultimately retain? 
• How many new donors do you need from all channels to stay flat?
• How much growth are you shooting for, and how many additional new donors do you need to achieve your desired level of growth? 

And once you know those four things, project the number of new donors you’ll need to acquire to meet your budget goals for the upcoming fiscal year. 

To maximize the value generated by acquisition efforts, it’s critical to have a clear understanding of your current supporter base. This requires that your online and offline analytics, plus other optional sources, reliably provide several metrics.

Common Nonprofit Acquisition Campaign Metrics

• Cost Per Acquisition (CPA): How much did it cost to recruit a supporter? This metric is determined by dividing the cost of the acquisition campaign by the number of donors recruited. 
• Average Lifetime Value: On average, how much a donor gives over their lifetime on your database? These metrics might differ for individual donor segments: a sustaining donor, for example, likely has a higher lifetime value than the average one-time donor. 
• Time to First and Second Gift: How long, on average, does it take a newly recruited lead within a particular segment to make their first gift? How long does an average donor take to get to their second gift? 
• Attrition/Churn: On average, what percentage of your file is lost or goes inactive each year? This metric will help you understand the support lifecycle of your constituents while providing a target to beat as you attempt to reduce attrition. 

These (and other) metrics will build the mathematical framework that contains your organizational benchmarks, near and long-term goals, and projections. Improvements in some or all of these areas will lead to a more extensive, durable network of supporters.

Understand your existing donors.

Look for prospective donors that look like your ideal donor persona. Evaluate core constituencies to understand best what new audiences to target. 

Tools like Google Analytics, Facebook, Instagram, Google Ads, and various data partners can all provide valuable insight into who your constituents are.

Some of these data points might be:

• Demographic Data: Age, gender identity, geographic location, income, etc., can all be used to help identify an audience. 
• Behavioral Data: Online and offline content preferences, browsing behavior, purchase behavior, political preferences, etc. All of these data, legally provided by users, can be the “silver bullet” in identifying the unique micro-communities to target.
• Performance Data: Your own organization’s documentation from past campaigns, media engagements, email program reporting, etc., will all help to surface audience data to assist in acquisition efforts. For example, you might find that one narrow audience segment has a deep creative preference for a particular image or line of copy. 
• Creative Preferences: Testing different images, messaging, and delivery techniques at the audience level can surface individual creative preferences, leading to higher conversion rates.

Allegiance Group + Pursuant works with clients to compile data into an actionable growth strategy, using the channels that appear best suited for the effort. 

Direct mail acquisition campaigns

For many organizations, direct mail is still the primary source of new donors. Because the cost to acquire a donor through direct mail (list rentals, creative, printing, postage) is greater than the new donor’s first gift, direct mail campaigns typically result in an initial net loss. Organizations usually break even in year two. 

The prospects most likely to give to your direct mail acquisition campaign are those with a history of giving to similar organizations and those with a history of taking action via the direct mail channel. 

Purchasing a compiled or response acquisition list can be effective for your direct mail efforts. But you must process the list carefully. Suppress active donors you’re already communicating with and lapsed donors you plan to communicate with again soon. But don’t suppress lapsed donors you’re not planning to include in other campaigns.

Focus your direct mail acquisition efforts in areas where your organization has a heavy donor presence. The demographics of the population likely match those of your current donors. 

Digital donor acquisition channels

Acquire new donors through digital channels like social media, website optimization, email campaigns, and paid media.

Digital advertising includes channels like paid search, paid social, display, and video advertising. 

Commonly used paid media platforms & channels for new donor acquisition include:

• Search Engine Marketing (SEM)
• Facebook & Instagram
• Fluent / Care2
• Programmatic Display Advertising
• Podcast/Audio Advertising
• YouTube
• Google Display Network (GDN)

Attract new donors with incentives.

No matter how you reach new audiences, sometimes you need an irresistible hook. 

Donor incentives or fundraising incentives are perks or offers that attract individual donations. These can include branded merchandise, discounts, matching gifts, and member cards. The type of incentive you use will depend on your donor base and target audience. Identifying incentives that will attract and encourage loyalty to your organization is critical. 

Additionally, consider the expertise and cost associated with creating an incentive program. Nonetheless, offering incentives to qualified prospective donors can help generate donor loyalty and keep them engaged. 

Find new donors with peer-to-peer fundraising.

The effort put into donor acquisition can be amplified through peer-to-peer fundraising by empowering donors to raise funds from their networks on your organization’s behalf.

{Breakout} According to the  Millennial Impact Study, 74% of millennials are more likely to give to a nonprofit because a friend or family member asked them to give. In addition, the study shows three out of four prospects will give to their campaigns. 

Employing peer-to-peer or crowd-raising campaigns must not overburden fundraising staff or be too complicated for donors. Making an online fundraising page or event must be easy and fun for donors. Development officers should be aware of managing donors’ expectations so they’re not discouraged. An online tool providing landing pages, social media, and email templates will keep donors engaged, excited, and connected to your organization. 

Email campaigns for lead generation.

Email campaigns are part of a comprehensive digital fundraising strategy. When you have content to share, use social posts and calls to action to drive traffic to landing pages with opt-in forms for email. Then use the list for donor cultivation through a welcome series. 

Test your email’s offer (i.e., blog, survey results, or pdf) and your calls to action (CTAs) to hone your message and increase your email’s ability to turn leads into loyal donors. 

Build relationships.

Donor acquisition is not a 1-step process. Prospective donors go through a journey from awareness to eventual donation. Use a multi-channel approach to move prospective donors through this process.

Organizations that effectively use digital marketing and direct mail to reach new audiences will generate more leads and convert them into donors.   

Allegiance Group + Pursuant is an experienced partner with a proven methodology for understanding supporter data and creating audience profiles. Using those profiles as a starting point, our experts will develop digital and mail plans to recruit new supporters. Allegiance’s integrated approach also remains channel-agnostic, fostering growth across digital, direct mail, and other core segments.