You Asked—Fundraising Questions Answered
Are buying (renting) mailing lists still a cost-effective way to acquire new members/donors? If you're defining "cost effective" as "break-even or better," renting mailing lists hasn't always met that criterion for a long time. However, using modeling to select people who have a higher likelihood of donating remains a way to improve results and reach potential supporters. Coupling a modeled list with a package that you have been testing and perfecting increases your likelihood of success.
Direct mail acquisition will more likely fail if you keep changing your package instead of testing and refining the one that proves to be the best at acquiring donors, or if you just rent the cheapest list of names you can. Choosing a list broker who will work with you to find the best possible rental lists will lower the odds of failure. Look into modeling if you aren't already using it. And generally avoid free lists; there's a reason they are free.
There are a lot of ways to acquire new donors, but it's hard to get in front of a large potential donor audience over and over again without investing in something mass like direct mail. Just be prepared: Breaking even may take 12 to 18 months. But if you are acquiring and retaining donors who give again and again, it's worth it. If you are only acquiring donors who give once and never give again, it may not be. Bottom line: You have to spend money to raise money. And then, do it again and again.
What is the No. 1 priority for fundraising dollars? Well, that depends. What is the goal of your nonprofit in terms of fundraising? Is it to build a base of donors to cultivate for major or planned gifts? Is it to have a loyal base of donors who volunteer as well as give? Is it to raise as much money possible in the shortest time possible? Is it to build a cadre of donors who are incredibly loyal?