Learn what Canadian fundraisers know about finding and converting regular donors with a high long-term value.

It seems from up here in Canada that Australian fundraising seems stuck in the idea that there are cash donors and there are regular donors and never the twain shall meet. Regular donors are recruited through face to face, telemarketing and two step.

In Canada we know that cash donors can be converted to regular donors by direct mail (or email for that matter) and we almost always ask. We might lose a few cash donations this way, but we get a regular donor with a long-term value (LTV) many times higher, and higher than those acquired through face to face, telemarketing or two step.

Just so we are on the same page let me define LTV as I see it.

The LTV measurement is used to determine the overall health and loyalty of your donor file. It also helps to determine acceptable investment levels for new donors’ acquisition or cultivation activities.

Calculating Long-Term Value

Step One: Take a cohort of newly acquired donors. (A cohort is a group of donors who share a common characteristic – for instance, acquired in the same year.)

Step Two: Measure the revenue from those donors over a reasonable period (five years).

Step Three: Subtract the costs associated with acquiring and resoliciting the whole cohort.

Step Four: Divide the results by the number of donors in the original cohort.

Step Five: Re-evaluate the acquisition (or re-solicitation) costs in the light of the resulting long-term value.

 Here are the LTVs of several Canadian organisations calculated recently.

  • $714 monthly/$176 single ie 4 times better
  • $732 monthly/$147 single, ie 5 times better
  • $469 monthly/$112 single, ie 4 times better
  • $539 monthly/$77 single, ie 7 times better
  • $635 monthly, $117 single, ie 5.5  times better

The coupons displayed below are typical large format Canadian reply coupons. Note the “best way to give” on the Friends coupon. This was first successfully tested with the Canadian Cancer Society and is quite often used now. Note also that most Canadian direct mail does not follow the propositional model. But that’s a subject for another article.

Continually pushing monthly giving does not make for huge immediate gains in regular donors. We also do face to face (constrained in our winter!), telemarketing and two step. However, we do receive a drip, drip, drip of quality regular donors this way through direct mail. Regular donors with the highest LTV of any source.

Why have I bothered to tell you this? Because we worked with the Surf Lifesaving Foundation in your own country for close to 15 years and helped build their regular donor file by asking in just about every direct mail appeal. There were six or seven each year.

The last data audit results I have for Surf Lifesaving show LTVs of $714 for monthlies and $176 for cash – four times as high!

If I haven’t completely convinced you, then why not test. Compare the LTVs of newly acquired regular donors versus the LTV of your cash file. Let me know how it goes, but I’ll bet you find what we’ve found over the years. Your cash file is a good source of regular donors.

Steve Thomas is the Founder & Executive Creative Director of  Steve Thomas LTD.

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