Why acquire at all?
We all love our loyal donors, those individuals who give year-over-year. Some will move through the pipeline and become major or planned gift donors, but even those don’t have a high lifetime value to our organizations. But everyone must start somewhere, right? Our loyal donors started with one, likely very small gift, and at the time of that first gift, your return on investment was likely low. Studies show that it costs $2.25 to raise $1 when acquiring a donor, and it takes 36–48 months to recover the cost to acquire those donors (up from 24—48 months pre-pandemic).
Acquisition is a long game that requires consistent investment, which is what makes it so challenging. It is hard to spend money soliciting large volumes of individuals, many of whom aren’t likely to give, just to find the few who are willing to support. If only we could just skip the process and have these donors give large gifts right from the start. It does happen that way sometimes, but those individuals are outliers. As challenging as it can be, we need to have patience and understand that investing now will pay off in the future.
We are working harder.
Not all donors are created equal. There are some that, although they may provide important short-term revenue to your organization, are not likely to remain loyal to your organization or feed your pipeline for major or planned gifts. Let’s look at who these donors are.
Memorial/Tribute donors. For many healthcare organizations, memorial and tribute giving makes up a significant percentage of your annual acquisitions. However, many of these individuals are not renewable. If I go to my friend Sally’s grandmother’s funeral and make a gift to the organization they have requested, I likely have little-to-no knowledge or affinity for that organization, so I am not likely to give again when asked.
Crowdfunding and third-party events donors. These donors can be similar. I had the honor last fall to be a charity runner for my organization’s cancer center in the New York City Marathon. My friends and family gave to support my run, but most of them don’t even live in the area and would not have otherwise supported my organization. I am not saying that these donors and dollars don’t have value to the organization, but again, most of these individuals are not going to feed your pipeline.
Traditional fundraising events donors. These are more of a mixed bag. Fundraising events can certainly bring in donors who are passionate about your organization and event donors may give at higher levels than a typical annual giving donor. However, there are two drawbacks to event donors. First, events can be costly and require a lot of work to raise that money, and second, those donors may or may not stick with your organization if the event is discontinued.
Let’s work smarter.
Data has consistently shown that grateful patients (and families) tend to be your most loyal supporters and most likely to become your future major and planned gift donors. But soliciting these donors is not without its challenges Between navigating HIPAA regulations, the cost of mail going up, etc. and the size of our grateful patient/grateful family lists getting bigger and bigger, it presents a challenge in trying to achieve even a small return on investment But there is hope! There are ways to improve your efforts in this space while targeting the right prospects.
- Multi-channel Outreach. More healthcare organizations are pushing the envelope and starting to explore using email, social media, calling, or text to giving in addition to mail. Having other, more cost-effective channels will allow us to develop more sophisticated solicitation strategies that can lower the cost while increasing the ROI. . Just make sure you are following your organization’s guidelines.
- Be strategic. You can improve your return on investment by targeting the right people. Not every grateful patient prospect needs the same strategy. By using tools like wealth screening scores, affinity scores and predictive modeling, you can develop different plans for segments within your acquisition lists ensuring you are investing your resources wisely in the best prospects.
In conclusion, we can work smarter not harder by introducing more cost-effective channels and using tools to create different strategies for different audiences based on demographics, wealth, affinity, and likelihood. In the end, it is important to remember that acquisition is a long road, but we need to consistently travel it to feed the pipeline for future fundraising.
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ABOUT THE AUTHOR:
Ann Fisher is a fundraising professional with more than 25 years of experience in annual giving. Ann began her career at Hospice of Michigan where she developed numerous skills from data base management to grant and appeals writing. From there she moved on to University of Detroit Mercy where she spend nearly 20 years in annual giving, eventually becoming their Executive Director of Annual Giving and Data Services. During her time at Detroit Mercy, Ann was instrumental in introducing new initiatives like online giving and crowdfunding while also improving the ROI in phone and mail and coordinating the University’s President’s Cabinet leadership giving program. Ann then spent two years at UC San Diego as Senior Director of Integrated Marketing, where she launched their first Day of Giving and restarted their grateful patient giving program. Ann currently works at Michigan Medicine where she serves as Director of Annual Giving, Leadership Annual Giving and Data Services. In 2021 Ann and her colleagues were selected as CASE Platinum Award Finalists in the Best Practices in Fundraising Award for their Nurses Week Campaign, which raised over $80,000 from 1,300 donors during the height of the pandemic. She has also served as a judge for the CASE Circle of Excellence Awards. In her spare time, Ann is an avid runner and has run several half and full marathons as a charity runner to raise money for various causes.
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ABOUT GOBEL SUBJECT MATTER EXPERTS: GOBEL Subject Matter Experts are healthcare philanthropy professionals working in some of the top shops in the country, sharing best practices and insights. For more information about GOBEL’s Subject Matter Expert program, or to suggest a topic for coverage, email jmoody@gobelgroup.com.
