Charities are losing large sums of money by focusing on acquiring new donors rather than retaining existing ones, according to Roger Craver, a US-based fundraising consultant.
Craver is author of the book Retention Fundraising and editor of the fundraising website The Agitator. He told delegates to the International Fundraising Congress in the Netherlands yesterday that charities should invest more in retaining existing donors because they had a 60 to 70 per cent chance of getting gifts from them, but a less than 2 per cent chance with a new prospect.
He said there was a 20 to 40 per cent chance that fundraisers would secure a donation from a lapsed donor. "A lot of water is leaking out of the bucket and it’s a shame that that’s happening," said Craver. "Why do so many organisations think acquisition is so important when you have only about a 2 per cent chance of getting a gift from someone who has never given you money before? Why do so many fail to look at what they’re doing to those people when they bring them in in the first place?"
Craver said more charities should set aside money for holding on to new donors as part of their acquisition programmes. This could make an enormous difference to cumulative income in five years, he told delegates.
He said charities with endowment funds could make annual returns of about 35 per cent by investing in the acquisition and retention of donors, rather than in the stock market, which is typically yielding between 5 and 10 per cent a year.
Craver urged fundraisers to make the case for this to their investment boards, because it was the safest investment imaginable.
He also spoke about charities that had asked external investors to invest in them – this was a wise tactic, he said, which represented the future of fundraising capital for many organisations, particularly those in their early stages.
In an effort to retain donors, he said, some organisations had started employing chief donor communications offers to ensure that all the materials supporters received were consistent.
Craver said it was extremely important for charities to thank their donors, but letters or phone calls that expressed this gratitude needed to be consistent in their tone and frequency.