by guest blogger Jeff Nickel, Senior Vice President for National Accounts at TrueSense Marketing
We have met the enemy and he is us.
We fundraising professionals have really screwed this up. "This" being how we present our performance for acquisition campaigns in public.
Example: "Anderson Cooper 360" has been "investigating" a case of a nonprofit and its direct mail partner, and making it look like a massive rip-off that would make any right-thinking person never respond to a direct mail appeal. (You can see the report here.)
I don't know the facts of this case (you certainly won't get them from the sloppy AC360 report), so I can't comment on its accuracy. But I do know that the program's assertion that it's a scam for a nonprofit to spend money "building a mailing list" is incorrect.
And that's where we come in.
If someone -- whether it's an ambitious journalist or an inquiring donor -- asks about our donor acquisition programs, we should not allow them to walk away thinking campaign results alone tell the whole story. Because they don't.
Typically, it costs more money to get new donors than those new donors give. But the program works because subsequent gifts from those donors are highly profitable.
... that is, you build your mailing list so you can you raise money.
If you talk about acquisition metrics without including cultivation metrics, a reporter (or donor) who doesn't know better can conclude that a new donor's donation went to pay for fundraising, not mission.
Which is not true.
The reality is that all the donation revenue from all the campaigns goes into the big pot of revenue. That pot funds the mission. So whether the donor gave in response to an expensive acquisition campaign or a profitable cultivation campaign, she's funding the mission.
That's the way it works, unless the organization is incompetent or unethical. There are such organizations. They are the bad guys, and every one of them should be caught and put out of business. But whipping up panic that's based on incomplete information only makes it easier for them to keep operating in the shadows.
Like any business, we have to invest. If we never spent money to "build our mailing list," we would go bankrupt, because there would soon be no current donors, no monthly donors, no major donors, and no bequests to fund the mission at a profitable level.
So please -- make sure you and anyone else who might be asked the question understands the proper answer, which is this:
Every donation we receive goes where we say it goes. The fact that not all our activities are equally profitable does not change that.
More on this important topic at The Agitator: Acquisition: Asking The Wrong Question.