It’s a question often posed by eager board members—where can we find new donors? If you dig a little deeper, however, you will probably uncover that what the board really wants is more total donors, not just new donors. So while we will discuss where to find new donors shortly, a good first step is to check your donor retention rate.
The overall donor retention rate typically averages around 45% year to year. For first time donors, that rate drops to 20-25%, and is about 60% for multi-year donors. If your organization is not at (or ideally above) these averages, focusing on these donors will provide the highest return. If your retention rates are lower, adding new donors will simply be dumping water from a leaky boat. Unless you fix the leak, you will eventually sink.
But even if your retention rates are in good shape, every organization experiences some donor attrition, so everyone needs to find new donors. While some may look externally, your best source for new donors are those already in your database.
First, think of your lapsed donors. Quite simply, those that have donated to your organization before are more likely to give again than any other group (besides current donors), even if they have missed a year or two. Do not make the dangerous assumption that they have permanently stopped giving.
After your lapsed donors, think of anyone on your database that has not made a gift. This is perhaps the most overlooked group for new donor acquisition. Do not go purchase a list when you likely have plenty of prospects already in your database who have interacted in some way with your organization. These could be newsletter subscribers, ticket buyers, volunteers, patients, alumni, parents, etc. This group is going to have far greater affinity than any list that could be purchased.
If you find this group is not that big, consider where you may be missing opportunities to collect contact information from event attendees, volunteers, and others who interact with your organization.
There are some other exercises, such as working with board members and their connections, that can yield higher capacity, but less quantity of potential donors. This can be helpful for special efforts like capital campaigns. Click here for a prospecting exercise designed for your board.
In summary, to grow your donor base your focus should be on the following (in order):
Current donors
Lapsed donors
Anyone on your database that is not a donor (volunteers, event attendees, etc.)
List purchase (only after the top three have been exhausted)
Bottom line: There is more than likely a lot of untapped potential at your fingertips. Start with your database to get the best bang for your buck.