Don't be seduced by the large numbers!
What should be a fair battle between quantity and quality is far too often, and too easily, won by sheer numbers. We should all be recruiting fewer higher-quality donors, instead of more lower-quality donors. Yet, year in and year out we are replacing very large numbers of donors with large numbers of too low quality. That can be done differently. That has to be different. Because it yields too little. And it costs too much.
What do I mean by “lower quality donors”? Suppose you recruit 100 new donors. In other words, people who make a donation to your charity for the first time. How many of them will still give next year with low quality? For one-off donors, <25% give again in year two. For regular donors, <50% are active after 12 months. That is not high and therefore not good.
I speak to dozens of fundraisers every month. They are all good, but some are better. They understand that quality always wins in the long term. In extreme terms: One donor of the best quality donates more than a hundred donors of the worst quality.
An example:
3,000 structural donors with a 12-month retention of 75% and a monthly value of 10 euros will give approximately one million euros over 5 years.
5,000 structural donors with a 12-month retention of 50%, and a monthly value of 10 euros, also gives approximately one million euros.
So you raise the same amount with 40% fewer donors!
The differences become more visible over time. Of the 3,000 donors, about 1,000 are still active after ten years. Of the original 5,000 you only have a few hundred left.
If fundraisers have mastered the concepts of quality and long term, you will make better choices and raise much more income. Guaranteed. The above numbers could amount to tons (!) in the long term.
Lower quality yields less. Better quality yields more. Not very strange. But the large numbers distract from the discussion that really needs to be had. If you were to ask any fundraiser whether they wanted to recruit 3,000 donors or 66% (!) more… far too many fundraisers would choose those 5,000 donors. Directly and without hesitation.
In my opening I also said that it costs too much. That can be explained briefly.
Suppose you recruit 5,000 lower-quality donors year in and year out as outlined above. After five years you have recruited 25,000 new donors. How many do you think will still be active after five years with the above percentages? More than 9,000 donors. In other words, you have now lost more than 15,000 donors along the way.
In the scenario where you recruit 3,000 donors of higher quality every year, you will have recruited 15,000 donors after five years. Of these, just over 9,000 are still active at the end of year five.
If you want to maintain your support base “in terms of numbers”, then you have to recruit many more donors from the '5,000 group', because they simply leave more quickly... Normally I talk about investing in the context of fundraising, but I would rather want to mention costs. This approach costs a lot of money.
And we're not even talking about the high-pressure area this creates on the consumer market... Quality fundraising = sustainable fundraising.
I also know that recruiting new donors is not easy. But the temptation of large numbers is too great and greatly hinders our attention to quality. If the opportunity arises, you make quantity completely dependent on quality.
Let's pay attention to quality. Let's reward, celebrate and cherish quality.
But above all, let's educate fundraisers so that they understand what this discussion is about and are not seduced by the large numbers.
In an ideal world, quality and quantity go hand in hand. You need both, and so you must pay attention to both.
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