An Alluring Proposition

Let’s face it. As direct-response fundraisers, we don’t spend enough time trying to renew lapsed donors. Most of our effort goes into acquisition and current-donor programs — and for good reason.

Current-donor mailings generate the bulk of your income, so that’s always your first priority. And even though most acquisition mailings lose money in the first year, they do create future donors. (Note: If you’re making money or breaking even on your acquisition mailings, you’re doing a great job. You should request a raise from your boss immediately, and write to us here at FundRaising Success and tell us how you’re doing it.)

Still, you can’t ignore those lapsed donors. Improving the results from your lapsed-donor program can generate a good amount of revenue without a lot of expense. The fact that some nonprofit organizations don’t have a renewal series is puzzling — and mailing your acquisition or active-donor package to lapsed donors isn’t enough.

“A donor isn’t a donor until he makes a second gift,” says Dick Murdock, president of Murdock Associates, a Dover, Mass.-based creative and strategic consultancy. “Consider creating a special series of your best renewal appeals for your first-year renewal audience. This can boost that critical first-year renewal rate, which will mean a big increase in revenue in subsequent years.”

Recency/frequency/amount
As a nonprofit mailer, you should be segmenting your lapsed donors into several groups based on date of last gift. Some mailers use 12-month intervals, but a few use six-month segments. The important thing to learn is how far back you can mail to renew your old donors at a reasonable return on investment.

Segmenting also gives you a chance to test different packages, components, copy and offers to maximize revenue and minimize costs for future promotions.

This also is true for lapsed donors who’ve made more than one gift. Try testing a different approach for this group since these donors are more valuable to your organization. That seems obvious, but not everyone does it. Also, lapsed donors who’ve made larger gifts — for example, two or three times the average gift for your file — should receive this same treatment, and both groups should be mailed more often.