Conference Roundup: Every Dollar Counts

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.