New donor acquisition is an essential building block for every nonprofit. While donor retention is more cost-effective, every organization faces natural attrition, making new donor acquisition vital for sustaining and expanding your impact. Understanding the strategies, metrics, and tactics you can use to build a robust new donor acquisition program is a key component to success
What is New Donor Acquisition?
New donor acquisition involves identifying and engaging individuals as potential donors. This could be done through various channels, such as digital, mail, TV, radio, etc.
Calculating New Donor Acquisition Metrics
A new donor is defined as someone who gives their first gift in a specific time period (e.g., a month or year). The new donor percentage calculation is:
New Donor % = New Donors/Active Donors
Tracking these metrics helps gauge the effectiveness of your acquisition strategies over time, and can help you prioritize how to acquire new donors.
Understanding the Donor Funnel and Donor Journey
To effectively drive donor acquisition, you need to understand how potential supporters move through three critical stages of the donor funnel:
1. Awareness
This is where potential donors first encounter your message. Key metrics include web traffic, impressions, direct mail reach, and social media engagement.
2. Interest
At this stage, individuals engage more deeply, often by signing up for emails or clicking on a call-to-action (CTA).
3. Action
This is the conversion point—individuals make their first gift or commit to supporting your organization.
As you begin to understand where potential supporters are in their journey, you can identify the most effective channels for each stage and develop strategies to meaningfully engage with them.
Related: Your Ultimate Guide to Donor Engagement Strategies
Why It Matters: Cost and ROI in New Donor Acquisition
Because acquiring new donors is more expensive than retaining donors, understanding your cost to acquire a donor and your payback period (the time it takes to recover acquisition costs through donations) is essential. This allows you to prioritize channels that deliver the best long-term return on investment (ROI).
For example, let’s compare two acquisition channels with similar costs and first-gift values:
While both channels incur the same cost to acquire a donor, Channel 2’s higher retention rate drives significantly greater long-term ROI. This underscores the importance of focusing on channels with better retention dynamics. Prioritizing a successful acquisition channel is not only more cost-effective in the long run but also focuses on more engaged supporters.
Benchmarks and Industry Standards
On average, new donor acquisition varies based on organizational strategy and type of nonprofit. In 2023, the top quartile of nonprofits achieved 64.23% new donors, according to the Virtuous Benchmark Report. This benchmark offers a useful target for evaluating your acquisition efforts. Imagine what your nonprofit could do with an increase in new donors, who could then turn into long-term supporters or monthly givers.
Tactics to Boost New Donor Acquisition
Acquiring new donors can be overwhelming due to the cost involved and the amount of channels available to fundraisers. However, a responsive CRM, like Virtuous, can help streamline the process so you can focus on building relationships.
Understand Acquisition Costs
Track the cost per donor for each channel and compare it to lifetime value to identify the most effective avenues. Focus on the ROI of each channel and see where people engage the most.
Optimize Payback Periods
Aim to shorten the time it takes to recover acquisition costs by nurturing new donors through thoughtful engagement and personal communications.
Leverage Current Donors
Encourage existing supporters to refer friends and networks. Use effective channels to leverage these relationships and build trust.
Continue to Grow with New Donor Acquisition
New donor acquisition requires careful analysis and strategic investment. By understanding the donor journey and prioritizing high-ROI channels, nonprofits can attract and retain dedicated supporters. Your organization can achieve sustained growth and impact with a balanced focus on new donor acquisition and retention.
Learn more about nonprofit benchmarks here.
