Despite fundraisers’ hopeful expectations, online-acquired donors often cost as much as theur DM-acquired counterparts.

By Kimberly Seville

TESTING

Statisticians will argue that test results are not reliable if your test cell quantity is tiny, which it often is for nonprofits that have not yet acquired a sizeable number of online donors. Let the stats folks grumble, and just keep repeating the test. If you get the same results several times, you’ll have more confidence in your conclusions.

THE NUMBERS
Here’s the lowdown on online- versus direct mail-acquired donors for one nonprofit:

2002 Online Joins 2002 Direct Mail Joins

27.1% active in 2003 40.7% active in 2003

2.74 gifts/donor in 2003 2.06 gifts/donor in 2003

$43.28 average gift in 2003 $35.04 average gift in 2003

22.4% active in 2004 31.5% active in 2004

2.67 gifts/donor in 2004 2.31 gifts/donor in 2004

$40.81 average gift in 2004 $36.76 average gift in 2004

Puzzled about why your online donors aren’t renewing? Simple ... they’re different, those donors who give online. For a time, prevailing conventional wisdom was that a donor acquired online is most likely to renew online.

And the great hope was that online donors would be so much cheaper to re-solicit because we wouldn’t have to spend money on postage and printing and production … we could just e-mail them!

It wouldn’t be quite like raising money in a bank vault, but dreamy looks crossed fundraisers’ faces everywhere as they thought about how fantastic the cost-to-raise-a-dollar ratios would look for online donors. So much for conventional wisdom.

Today, we know a lot more. Online donors don’t respond uniformly to re-solicitation efforts any more than those acquired with direct mail.

A lot of them respond better to direct mail than e-mail campaigns, in fact, blowing a big hole in the theory that they would be cheaper to re-solicit than those direct mail donors we have to spend so much money on.

Fundraisers who raise the most from online donors are contacting them with every media in the arsenal … e-mail, phone and mail in strategic coordination. They know if they don’t, online-acquired donors won’t be with them for long.

No simple solution
Online donors are proving to us yet again that all donors are not created equal, and our success in retaining them and upgrading their level of giving depends on how fully we understand them in all their quirkiness.

Certainly, every organization must conduct its own testing to determine if the following intelligence about online donors holds true, but years of testing and tracking and detailed analysis tell us that, in general, online-acquired donors have a lower retention rate and a lower lifetime value than direct mail-acquired donors.

No Such Thing as a Free Donor