Growing Your Program In Today’s Market Part 2
“If you wish to move a mountain tomorrow, you must begin by moving stones today.” -African proverb
Last week we began chatting about some of the ways our fundraising world has fundamentally shifted over the last few years, to include rising costs, finite audience (with changing demographics) and increased competition. Each of these challenges on their own pose a threat, but combined and left unchecked, the outcomes could fuel negative outcomes for many fundraising programs in the future.
That said, there is much we can do to mitigate damage, and in fact, propel programs forward, even in times of uncertainty. Specific strategies include:
Value over volume strategies: by prioritizing value, overall revenue may be optimized both in upfront performance, as well as in subsequent giving – decreasing the time to breakeven on upfront investments.
Expedite 2nd gift conversion: generating the second gift earlier has many benefits including reducing the time to breakeven so incremental net revenue is delivered to the organization sooner.
Create a culture of monthly giving: entertaining a monthly offer early (even within the initial acquisition ask) can produce many positive outcomes, one of which being a reduced time to breakeven.
Now that we have summarized each area, let’s spend a few moments exploring each individually.
Value over volume strategies
The extreme cost increases experienced in 2022 led many to (significantly in some cases) reduce mail volume and to cut investments – and in the majority of these cases, these cuts were made in acquisition. While these reductions do have an immediate (positive) impact on net revenue, reducing your program’s pipeline has many negative long-term impacts including a declining active universe resulting in a reduction in long-term revenue potential.
For those reasons, a better idea might be to prioritize value strategies across programs. This can be achieved in many ways:
Develop acquisition strategies aimed at recruiting higher dollar (think $40 vs. $20) donors, or even monthly givers from origin gift.
Test non-premium packages to acquire more mission-centric donors.
Create minimum thresholds for giving (i.e. dollar levels that warrant additional cultivation vs. those that do not).
Expedite 2nd Gift Conversion
We know that the faster we can secure a 2nd gift from a new donor, the more valuable they are to the organization; both in terms of immediate revenue as well as long-term giving potential. And yet, welcome strategies are typically one of the least prioritized programs, often cut or scaled back due to the investment nature of this program. This is counterintuitive, however, to our overall goals as fundraisers.
While these 2nd gift conversion strategies often represent investment line-items in the budget, the cost not to implement these strategies is far greater, and can actually create larger cost imperatives down the road (i.e. higher attrition).
Create a culture of monthly giving
At Fuse, we are very passionate about the power of monthly giving for so many reasons. For one, an average monthly donor is worth 4-6 times more than a one-time gift donor. Said slightly differently, one monthly donor can generate as much as 4-6 one-time gift donors. With metrics like that, you can afford to cut off some of your one-time gift acquisition investments in favor of potentially even more modest investments in your monthly giving program.
An increasing number of organizations have grown their monthly giving programs by recruiting a greater number of new-to-file monthly donors. Elevating the monthly offer early (as early as the initial ask) and often is key to fueling a robust monthly giving program – which in turns helps to poise programs for long-term stability and exponential revenue potential.
The past few years have been hairy indeed. Yet today’s fundraisers are nothing if not nimble. And while the future may be a little fuzzy, we are confident that our colleagues and friends, industrywide, will do what they have always done – kept calm and fundraised on!
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