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Fundraisers seem to have plenty of reasons why they don’t do such a great job when it comes to engaging low-dollar donors. Among them:
* They aren’t loyal.
* They lower a nonprofit’s average gift.
* They don’t have a strong return on investment.
But those generalizations simply aren’t true, according to Craig Zeltsar, vice president of client services at Lexington, Mass.-based direct-response agency Thompson Habib Denison, who spoke during the session “Low Dollar Donors: The Myths, The Realities and The Value” at the 2008 New York Nonprofit Conference earlier this month.
According to Zeltsar, low-dollar donors:
* can give more frequently over the course of a fiscal year, translating to higher renewal rates;
* according to testing, respond in the same way to the same message/package as high dollar donors;
* have higher response rates, which helps offset smaller gift amount size;
* have a higher lifetime value due to more frequent giving.
It’s to an organization’s advantage to have a plan to go after low-dollar donors, Zeltsar said, offering these strategies:
* The No. 1 rule is to mail the audience. “You have spent money and time acquiring donors, why are you not mailing them?” Zeltsar stressed.
* Devise cost-efficient strategies for low-dollar donors — but don’t change the strategy of how you acquired them. “Too many times organizations will devalue the renewal stream to these donors, yet the donor was responsive to a certain offer in acquisition,” he said.
* Be cautious on how aggressively you try to upgrade the donor. Be content gaining a strong return on investment through frequent smaller gifts and not going for the big gift from someone who hasn’t given you one.
* Balance response and net revenue. Don’t just mail all low-dollar donors; target them through more refined segmentation and modeling.
* Weigh the results against acquisition and deep reactivation efforts. “Low-dollar donors may prove an efficient way of offsetting attrition,” Zeltsar added.
For those fundraisers and development directors who still don’t buy into the importance of small-time donors, Zeltsar advised considering a few more facts.
Low-dollar donors make good prospects for planned gifts, and they help build a strong base of renewable donors who demonstrate higher renewal rates and more frequent giving.
They also help an organization build a larger file of donors, Zeltsar said, which gives it the opportunity to spread awareness to a broader group of people.
* They aren’t loyal.
* They lower a nonprofit’s average gift.
* They don’t have a strong return on investment.
But those generalizations simply aren’t true, according to Craig Zeltsar, vice president of client services at Lexington, Mass.-based direct-response agency Thompson Habib Denison, who spoke during the session “Low Dollar Donors: The Myths, The Realities and The Value” at the 2008 New York Nonprofit Conference earlier this month.
According to Zeltsar, low-dollar donors:
* can give more frequently over the course of a fiscal year, translating to higher renewal rates;
* according to testing, respond in the same way to the same message/package as high dollar donors;
* have higher response rates, which helps offset smaller gift amount size;
* have a higher lifetime value due to more frequent giving.
It’s to an organization’s advantage to have a plan to go after low-dollar donors, Zeltsar said, offering these strategies:
* The No. 1 rule is to mail the audience. “You have spent money and time acquiring donors, why are you not mailing them?” Zeltsar stressed.
* Devise cost-efficient strategies for low-dollar donors — but don’t change the strategy of how you acquired them. “Too many times organizations will devalue the renewal stream to these donors, yet the donor was responsive to a certain offer in acquisition,” he said.
* Be cautious on how aggressively you try to upgrade the donor. Be content gaining a strong return on investment through frequent smaller gifts and not going for the big gift from someone who hasn’t given you one.
* Balance response and net revenue. Don’t just mail all low-dollar donors; target them through more refined segmentation and modeling.
* Weigh the results against acquisition and deep reactivation efforts. “Low-dollar donors may prove an efficient way of offsetting attrition,” Zeltsar added.
For those fundraisers and development directors who still don’t buy into the importance of small-time donors, Zeltsar advised considering a few more facts.
Low-dollar donors make good prospects for planned gifts, and they help build a strong base of renewable donors who demonstrate higher renewal rates and more frequent giving.
They also help an organization build a larger file of donors, Zeltsar said, which gives it the opportunity to spread awareness to a broader group of people.
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