Development Planning from Scratch – New Donors

Posted by on Nov 15, 2016 in Development Audit, Donor Cultivation, Featured, Membership, Plans and Budgets, Staff Development, Uncategorized | 1 comment

Development Planning from Scratch – New Donors

Shouldn’t we be talking about getting more members?” he asked. “We’ve had the same 600 members for years now. Before we go off on major gift work, shouldn’t we be talking about growing our membership?

The questioner was the Chair of a land trust board; we’ll call him Tony (not his real name). Tony was worried that screening for major gift prospects would be a waste of time, because they had already mined whatever they were going to get from their static membership.

In response, I told Tony that the better renewal systems I’ve seen consistently renew about 75% of their members every year.

I told him that if his land trust was supported by 600 members, and if that number had been stable for some years, then last year they probably lost at least 150 members and replaced them with 150 new members.

I told him that every year, about 25% of his members were brand new and nearly half were in their first three years of membership. They’re just now getting to know the land trust, and the land trust is just now getting to know them. (It was a perfect time to screen his membership.)

I told him that if he wanted the membership to grow beyond 600, he would need to attract more new members than he was losing every year.

And I told him that at some point it became a math problem.

 

The last segment we need to talk about in our planning sequence is new members. So how many members do you need? (Hint: “More” is not an acceptable answer.) Let’s say that Tony divides the money he needs to raise each year by his current average gift and come up with this: “We need to increase our total membership to 1,000.

Using the same logic as above, Tony would then need to increase the number of new members he brought in every year from 150/year to at least 250/year – an increase of 100 members. Now let’s say he has also been reading this blog and estimates that each new member will cost about $80 to recruit (See Why You Should Get Good at Direct Mail Now). He therefore needs to increase his new member recruitment budget by at least $8,000/year – from $12,000/year to $20,000 year.

For planning purposes, I recommend that this expense, whatever it turns out to be for you, remain an expense only. Recruiting new members nearly always costs more money that you make from the effort. So it’s already a net expense. And every once in a while, you get really disappointed.

If you don’t budget for the income, and the effort raises at least some money, it will serve as a nice cushion for your budget. For example, if Tony’s $20,000 recruitment effort results in 250 new members joining the organization, and each one gives $50, he will have raised $12,500. If they give an average of $35, though, he raises only $8,750. Either way, not counting on it creates some wiggle room for later.

Whatever it turns out to be for you, just let this money be gravy.

 

Now WHAT are you going to do? I recommend direct mail (See Comes the Electronic Revolution), but you’ll need a plan, you’ll need a timeline, and you’ll need metrics.

Now Map It!

 

Cheers,

-da

 

Photo by Bethany Legg courtesy of Unsplash.com.

* * * * *

 

The Development Planning Sequence so far:

The BIG Picture

Segmenting

Soliciting the Board

Cultivating the Board

Cultivating Top 100 Donors

Annual Giving Leaders

Corporate and Foundation versus Individual Donors

Corporate Funders

Foundation Funders

Current Donors

 

* * * * *

 

Fundraiser’s Almanac
Here’s what I’ve been thinking about for November. What are YOU thinking about?

 

Fundraising Planning for 2017

For me, November is my planning month. My appeal is long gone, my grants are out, and the few personal visits I have left are scheduled and happening. It’s time to set the stage for next year.

Last year, about this time, I posted on how to grab a first take on what might be a reasonable goal for next year based on this year’s work. You can find that post here: Annual Giving. I also posted on using a Planning Calendar, and a fanciful Dream of Board Fundraising – Getting board members started building relationships with donors next year. (Hint: start by asking board members to call people making gifts this year to say Thank You.)

 

Giving Thanks

If you’ve managed your work well this year, you should get to spend a great deal of time between Thanksgiving and the Superbowl party writing Thank You letters. Here’s a refresher:

  • Remember that your thank you letters can and should carry your annual communications theme, too.
  • Get your thank you letters out right away. My aunt used to say that the value of a thank you note is reduced by half for every day that goes by. Aim for either the same day or the next day.
  • Mention the specific amount of the gift unless your organization will be sending a separate receipt. And if the actual gift was not cash, always describe the actual gift rather than assigning or declaring a value for it. Thank them for their gift of “100 shares of XYZ stock,” or the “twelve conference chairs,” or whatever.

 

One Comment

  1. David, this is yet another post that highlights the importance of looking at the numbers rather than simply relying on your “gut”. I preach this to all of the organizations I work with, and I frequently link them to your blog posts. Great stuff!