Selecting a List, Testing It Twice …

The economy must be truly improving, as I'm involved in more and more conversations about the need to invest in donor acquisition. For most nonprofits, today's reality isn't too encouraging. The Agitator summed it up like this last week:

"The average nonprofit has a 60 to 70% chance of getting an additional contribution from existing donors; a 20 to 40% probability of getting a gift from a lapsed donor; but less than a 2% chance of receiving a gift from a prospect."

Ignoring donor acquisition is one way to commit career suicide, since nonprofits lose a percentage of donors every year without even trying. Whether you call it churn or attrition, it's reality.

And that reality means that doing something to acquire new donors is essential.

For some nonprofits, online acquisitions may be enough to stem the tide of donor loss. Events can provide new donors and often a pool of prospects for work over the next several months.

But to acquire a large number of new donors quickly, nonprofits often turn to direct mail. It's cheap (well, compared to an option like direct-response television); you can target a specific geographic area or demographic; and over time you recoup your costs, identify potential major donors and planned-giving prospects, and build a loyal — and profitable — group of supporters.

Success in direct-mail acquisition requires a great offer and terrific creative, plus choosing the right lists to mail to. In my experience, we often fall apart when choosing lists to mail. We look for bargains, mail the same lists over and over, or choose only lists that look very similar to our own donor files. I recently asked my good friend, Donna Packer of Packer List Inc., if there is a better way to approach list rental. Here are her top three tips.

No. 1: Welcome a new member to your family
Develop and cultivate a positive relationship with your list brokers. Make them part of your professional family. Call them instead of e-mailing. Ask them to suggest new options that you haven't considered before — and listen when they tell you why they are suggesting a list that may seem, at first glance, to be a bit out of your comfort zone. Work with them to get the mail dates, quantities and selects you need while staying within your budget.

Ask them to proactively recommend new lists to you when they uncover ones that look like they fit your model of an ideal list composition. Thank them when they do, and again, listen to their reasoning. If your list broker has taken the time to get to know your organization, these suggestions could be right on target. Sometimes we have too much tunnel vision, but the fresh eyes of your list broker can uncover something that has been overlooked. (On the other hand, if you never get new ideas, consider replacing that "family member" with a broker who will work hard for your business. Acquisition is too critical to settle for mediocrity.)

No. 2: Think outside the trapezoid
Don't stop after you identify the traditional lists that are on the market. Ask your broker (you know, your new best friend) to research lists that are not on the market, and approach the development departments with an exchange proposal (if you are willing and able to exchange your list). You will hear a lot of responses like, "No, we don't make our list available for rental or exchange," but you will possibly uncover a few that say, "Wow! I never thought of it before, but we would be interested in exchanging." A direct exchange can be your greatest resource for finding new donors because the list hasn't been overmailed by other mailers. Or, if you can rent a list that no one else has mailed, it can be an unmined treasure.

No. 3: Look at the long-term value of a list
A list you rent (or receive via an exchange) may not perform well when you first mail it. The percent response may be lower than your expectations, and/or the average gift may not be what you need. But often, a long-term value report will show that the donors who came onto your file from what seemed to be a mediocre list just keep giving. When you find that gem of a list, mail it every few months with the confidence that while the results won't look great at first, you are acquiring loyal donors who will continue to be highly profitable two, five, even 10 years from now.

Acquisition is expensive. But it's necessary if your nonprofit is going to continue — even grow — its good work well into the future. Acquisition isn't for the faint of heart, but working with good partners can help you survive and thrive.

Pamela Barden is the creative juice and the copywriting machine behind PJBarden Inc. Pamela also serves on the FundRaising Success Editorial Advisory Board. You can follow Pamela on Twitter @pjbarden.