Friday, April 23, 2010

Volume vs. Value?

When I ask fundraisers which they'd prefer for their recruitment efforts - get more donors in the door (volume) versus get more money (value), not surprisingly the response usually starts and ends with 'both'.

On Tuesday I presented to 14 brilliant Canadian organization's who have pooled their data together as part of Pareto Fundraising's benchmarking cooperative. Brilliant because they have the foresight to see the tremendous insight provided by coming together to share for the greater good. Hats off to you guys.

I digress a little.

As we walked through the latest round of analysis, discussing the implications of the findings (more to be released shortly), questions and debate arose around certain fundraising methods/channels.

"Why would we do that? It seems a lot of work for little net return"

Good point indeed.

And herein lies one of the challenges we face. Do we want lots of new people or lots of income from new donors?

For example you have channel X which brings you $800 net on average after 5 years. Wonderful you think. But you can only find a few hundred of them a year.

On the flip side channel Y delivers just $350 after taking into account all costs in the same period. But you can recruits in the thousands each year.

What to do. What to do...

Here's my take on this:

- The decision should be made in light of what delivers the most long term income overall.

- There may be other factors dictating your ability to invest in channel X or Y. For example what's your comfort level with channel X which may ruffle some feathers both internally and to the general public?

- Linked to the above point, yours and your organizations attitudes to take risks are incredibly important.

- Consider the roll out potential of any method of recruitment. Pointless investing in something that offers little beyond any trial phase.

The short answer is you likely need a balance of both. Really solid drivers of growth in volume balanced with 'money in the bank', vehicles that deliver lots of net income.

For example, in countries like Canada and Australia if you want large volumes of monthly donors you invest in street recruitment. If you want long term, loyal and valuable supporters, digital and direct mail recruited donors are your meal ticket.

Consider the above points, and what you are setting out to achieve.

Whatever you decide, have the long term interests of those you exist to help, your benefactors, front of mind.


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