Indications Hopeful for New Donor Acquisition

Anyone attempting to do new donor acquisition over the last few years knows what we mean when we say, “Good luck with that.”

What many reading this probably have experienced is declining numbers of prospects, increased costs, and a change in donor behavior—all resulting in fewer new donors to support important missions.

Take heart, however. As 2025 approaches springtime, we’re seeing some promising indications that things are improving or, to put it another way, there is a renewed sense of opportunity when it comes to donor acquisition.

So, what’s really been happening when it comes to the decline in donor acquisition? Why was the drop a steep one for some organizations, yet not so bad for others?

• Pandemic giving highs and natural attrition – In 2020-2021, many organizations saw a large increase in one-time donors who subsequently lapsed. Now, some five years later, donor retention rates are starting to increase for several nonprofit sectors. This should be viewed as an early positive sign for the rest of the year.

• Response rates work to be done –With inflation and economic uncertainty, response rates suffered while materials costs increased, making direct mail more expensive as an investment when compared to donors acquired.

• Reductions in budget and pullbacks – As inflation really hit hard in 2023, some organizations made the decision to reduce their acquisition budgets, further exacerbating the decline in active donors. Correspondingly, investing less results in fewer new donors and fewer current donors and that is certainly a double whammy for fundraising results.   

• Multi-channel influence and attribution challenges – Increasingly, donors are motivated by direct mail but prefer to fulfill their gifts online. This makes attributing donor response to one channel very misleading.

Will direct mail acquisition ever return to pre-2020 levels? Not likely, at least in the short term. But we don’t anticipate the same rate of decline as in the last number of years. As noted, early indications are that response rates are slowly improving.

Remember These Acquisition Strategies

1. Invest in multi-channel – Integrate direct mail with digital efforts like email and social media.

2. Understand and take advantage of the full spectrum of your prospect lists – Do you have untapped prospects? Understanding where your organization is in regards to prospect identification will help guide you in terms of investment decisions.

In Conclusion

Direct mail acquisition of new donors is evolving. But the way forward is clearer than it’s been in quite a while. While challenges remain, response rates are beginning to show signs of stabilization and even growth (for some nonprofits).

Continuing to strategically invest in donor acquisition will position your organization for success in 2025 and beyond. These organizations will come out stronger and with a more engaged and participatory.