While finding new donors is a crucial part of running a nonprofit, doing so without a plan can feel frustrating and inconsistent. But coming up with a strategy doesn’t have to be complicated. When you understand your goals and strategy, you can more effectively create a plan that resonates with your donors and generates a lasting impact for your organization.
Let’s walk through what you need to know about attracting new donors and how to create a strategic acquisition plan.
Understanding Donor Acquisition
Donor acquisition is the process of finding and attracting new donors through your various marketing channels. It’s a separate activity from donor retention: staying in touch and connecting with your existing donors, so they keep contributing.
Investing in future donor acquisition is still important even if your nonprofit has a robust existing donor base. Growing your fundraising base would allow your organization to do more while replacing donors who fall off due to gradual attrition.
Using Donor Statistics
Finding new donors does mean spending money upfront. To ensure that you’re investing your nonprofit’s money properly, it helps to track and understand some key statistics behind your efforts. A few of these metrics include:
- Average contribution per donor: Track how often donors give per year and how much they give per donation to figure out how much you could expect per new donor.
- Average cost per donor: To find the average cost per donor, add up the total spent on acquisition, then divide by the total number of new donors.
- Donor acquisition rate: You should also track how many new donors you bring in per year and compare against the number of people you contact through different methods.
- Donor retention rate: Your retention rate is the percentage of donors who continue giving to your organization after a given period. Track this annually so you know how many new donors you will need to attract to stay in the same place financially. You could also track how long the average donor contributes to your organization.
- Donor lifetime value: Donor lifetime value (LTV) shows how much you can expect for each new donor you bring in. To find this value, you multiply the average donation per person by the typical amount of time they donate. For example, if you find the average donor gives $500 per year for four years, the LTV per donor is $2,000 for your organization.
Creating a Donor Acquisition Plan
Step 1: Set Your Goals
Set targets for your upcoming donor acquisition plan, like the spending budget, the number of new donors you think you’ll acquire, and the amount of extra revenue you will bring in as a result of these efforts. This gives you a benchmark for result comparison.
Step 2: Analyze Your Current Donor Data
Look at your existing donor demographics, such as age and location. This can help you discover the most effective development strategies, like which social media platforms to use and whether you use more digital or phone/direct mail. If you have different types of donors, you could run separate campaigns based on which you think would be most effective for each group.
Reference any previous development campaigns to see how they performed and select a few metrics that are important to you. Compare strategies you think were a success versus ones with lower metrics to understand how you could improve future campaigns.
Step 3: Decide on Your Outreach Strategies
If you’re working with a limited acquisition budget, decide which fundraising strategies are the most cost-effective for generating long-term donor value. You could rank them all by this factor and then concentrate on the ones at the top of the list.
Step 4: Track and Adjust as Needed
After you launch your campaign, continue tracking data like open rates for emails, donor acquisition rates, and retention rates. Evaluate trends and successes, such as a new flyer that led to many new donations. That way, you can continue finetuning how to use your nonprofit’s budget best.
Attracting + Managing Donations with Aldrich
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Meet the Author
Bobby LaCour, CPA
Aldrich CPAs + Advisors
Bobby joined Aldrich in 2005 and has over ten years of experience in public accounting. He specializes in providing attest and accounting services to nonprofit, manufacturing and other private middle-market entities. He also has extensive experience with internal control and operations analysis. Balboa Park Online Collaborative audit committee member American Society of Certified Public Accountants member... Read more Bobby LaCour, CPA
- Nonprofit organizations
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- Certified Public Accountant