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Why the first gift really shouldn't count

Greg Warner is CEO and Founder of MarketSmart, a revolutionary marketing software and services firm that helps nonprofits raise more for less. In 2012 Greg coined the phrase “Engagement Fundraising” to encapsulate his breakthrough fundraising formula for achieving extraordinary results. Using their own innovative strategies and technologies, MarketSmart helps fundraisers around the world zero in on the donors most ready to support their organizations and institutions with major and legacy gifts.

At MarketSmart, we get super-excited when a new organization signs up to work with us.
And why not? It is, after all, a genuine thrill to acquire a new client.
 
But I always admonish my staff that the first investment made by a new client shouldn’t really count.
Well, of course it counts toward our revenue goals and it adds to our bottom line. But, the truth is that we’d go out of business if we only inspired each client to buy from us just once.
Our objective, after all, is not to only get runners onto first base. Rather, we want to hit home runs, we want to win games, and we want to bring home a World Series Pennant! And that can only happen if we deliver value that inspires fundraisers to include us in their budgets year after year.
 
Same for you.
I think you shouldn’t count the first donation a supporter makes to your organization either. Why bother? Eighty-three percent who gave less than $100 won’t give again anyway (see below that just 17% will).
Therefore, I think you should not pay so much attention to the number of new donors you acquire but rather the new donor retention rate. How many did you retain? How many gave again? That’s a much more important measure of success.
Then, focus on developing long-term relationships with supporters to make sure your nonprofit is included in their budgets year after year. Tweet This!
[By the way, I’m proud to say that MarketSmart lost just one client in 2015 yet we more than doubled the number of organizations we serve. And, to be perfectly honest, that one lost client was not a good fit for us anyway.]
 
Taking the focus off of the first gift by saying it “doesn’t count” puts the emphasis right where it belongs.
So count how many people give again— the repeat donors (the new donor retention rate). And, count how many among them continue to repeat (the repeat donor retention rate). Because almost anyone can acquire new donors. But retaining them is the hard part and what really counts. Tweet This!
 
Retention rates
 

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