What is hot and what is not for donor acquisition in market today

1. Marketplace Acquisition Overview
What’s hot? What’s not?
Fiona McPhee
Pareto Fundraising

2. • New Donors
• Where we can get them
• Who they are
• What’s hot and what’s not

3. You do it
already You are new
to it
The Big Difference in decision making?

4. New Recruits - by year
0.0
500.0 K
1.0 M
1.5 M
200720072007200720072007
200820082008200820082008
200920092009200920092009
201020102010201020102010
201120112011201120112011
201220122012201220122012
201320132013201320132013
201420142014201420142014
Recruitment Year
Recruits
Bequest Cash Child Sponsorship Regular Gift Event Other

5. New Cash Recruits - by channel of solicitation
0
200 K
400 K
600 K
200520052005200520052005
200620062006200620062006
200720072007200720072007
200820082008200820082008
200920092009200920092009
201020102010201020102010
201120112011201120112011
201220122012201220122012
201320132013201320132013
201420142014201420142014
Recruits
Direct Mail Face to Face Media Online Other Phone

6. New RG Recruits - by channel of solicitation
0
100 K
200 K
300 K
200620062006200620062006
200720072007200720072007
200820082008200820082008
200920092009200920092009
201020102010201020102010
201120112011201120112011
201220122012201220122012
201320132013201320132013
201420142014201420142014
Recruits
Direct Mail Face to Face Media Online Other Phone

7. •Direct Mail
•Digital
•Face-to-Face
•Phone
•Combination / Integrated
Channel
•Classic (65+)
•Boomers
•Gen X/ Gen Y
Audience
Perspectives

8. CHANNELS

9. Direct Mail
• Last few years the universe has been targeted
better and better
Cold
Co-Ops
Swaps
Better Response

10. Direct Mail
• Last few years the universe has been targeted
better and better
Cold
Co-Ops
Swaps
Higher
duplication rates
Better Response

11. 0
200 K
400 K
600 K
2009
2010
2011
2012
2013
2014
DonorVolume
New Donors New, but has given to other Charities
Cash Donor Recruitment - by year

12. Direct Mail
• Last few years the universe has been targeted
better and better
Cold
Co-Ops
Swaps
Higher
duplication rates
Regular Giving
Conversion
Potential
Impact on your
retained donors
Impact on 2nd
gift rates
BUTBetter Response

13. Direct Mail
• Premiums
– Increase campaign
response rates
– Campaign costs impact
– Impact on initial value
– Impact on ongoing value
• 2nd gift rates
• Gift upgrade potential
• RG conversion potential

14. Direct Mail
• Premiums create a
type of donor:
– who likes premiums
– who is likely a bit
lower value
– who does respond
ongoing
Test Cell RR% Av$ ROI
No Premium 16% $51 3.7
Premium 21% $46 3.7
Test Cell RR% Av$ ROI
No Premium 11.7% $49.34 4.4
Premium 13.2% $48.28 4.0
Test Cell RR% Av$ ROI
No Premium 9.6% $49.30 1.76
Premium 11.1% $46.85 1.73

15. Direct Mail Considerations
•18 months – plan
to diversify and
test from the start
Shelf
life of
creative

16. Direct Mail Considerations
• Email &
phone number
collection
Data
collection
strategy

17. 2nd Gift rate by contact type segments
0
500
1,000
1,500
2,000
2,500
3,000
0%
10%
20%
30%
40%
50%
60%
70%
Addr1 Addr1
Email
Addr1
Email
Landline
Addr1
Email
Landline
Mobile
Addr1
Email
Mobile
Addr1
Landline
Addr1
Mobile
Email Email
Landline
Email
Mobile
2nd Gift Rate (Year 1) Recruits
Base: 2009 - 2014 Recruits
Multi-contact opportunity
donors have the highest
second gift rates. No
address sees much lower
conversion.
Address & Mobile potentially
an age thing

18. 0%
10%
20%
30%
40%
PressInserts
Phone
DirectMail
TV
Other
Online
LeadConversion
FacetoFace
2ndGiftRate
2nd Gift Rate Donors
0
100 K
200 K
300 K
400 K
Donors
Second Cash Gift - within 12 months by channel (2013 recruits)

19. Direct Mail Considerations
• Receipt ask packs
• Timing
• Adaptation of warm - for a
year
• Other offers e.g. Regular
Giving, Virtual Gift, Advocacy
2nd gift
strategy

20. Direct Mail Acquisition
• Still the volume opportunity to build a warm donor base
• Warm donor bases naturally decline in volume

21. 0%
10%
20%
30%
40%
50%
2008
2009
2010
2011
2012
2013
2014
RetentionRate
Retention Rate Income per Donor
$0
$50
$100
$150
Incomeper
Donor
Cash Donor Retention - by year, referenced to income per donor

22. Direct Mail Acquisition
• Still the volume opportunity to build a warm
donor base
• The source of bequest prospects

23. Direct Mail Acquisition
• Still the volume opportunity to build a warm
donor base
If you aren’t doing it
• It will make you money
• You need to be clear on who you
are recruiting and what they need
moving forwards to deliver a return
• Biggest considerations are your
objectives and your data
If you are currently doing it
• Analyse value beyond your
campaign ROI
• Consider what impact your tactical
decisions having past the campaign
impact
• Know your long game

24. Acquisition Proposition
• You (more than likely) have more than one
• With a saturated audience (regardless of channel) consider the
opportunity to test

25. Face to Face
• It’s still growing & still the only volume option
• It’s a suppliers market
• Not doing it yet? Have you got what it takes?
Cash / Budget Cause Type
Supplier
Management
Backend
Management

26. Phone
Rolling Cash & Lottery programs
• Hard to get going – huge
investment
• Long standing facing
declines
• I wouldn’t try it
Lead Conversion
• Strong results
• Data quality & costs are key
• pSMS has promise and
could drive lead volumes
• I’d try it

27. Digital
Growing at the fastest rate
• Still only represents less than 12% of new recruits
Direct to donation is hard
• Big emergencies are an exception – are you ready?
Integration is all the rage
• More on this
Two step is making in roads
• More on this

28. Start with warm
– spin off
acquisition
opportunities

29. Two Step Digital
• Bigger potential
audience then cold
direct to donation
It’s a numbers game
• It’s a beer not a
marriage proposal
• Phone & digital
conversion potential
Qualifying leads to
move from interest to
engagement • E.g. Facebook, email
• Other cross sell
opportunities
Engaged base
approached later for
donation ask

31. Types of Two Step
Digital lead to
Phone
Digital lead to
Email
Street lead to
Phone (Field
Marketing)
SMS lead to
Phone

32. Two Step
• Online leads converted via Phone
– 10% - 15% of F2F volume max potential
– Some charities are doing incredibly well
– Quality of leads critical
– Cost of leads varies – you can generate your own
– Phone agency skill @ conversion
– 10% non-starters (vs. ~20% F2F) but you pay for them
(unlike F2F)

33. Digital
Learn from warm
Cause / proposition critical
Landing page, landing page, landing page
Get creative

34. Other Channels
TV
• RG for ROI
• Overseas &
Environment
• Has potential for
right cause
• Be prepared to
invest to test
• Use the experts
Inserts
• Great ROI with
right media
• Proposition &
execution key
• Nice low volume,
background
channel
Others
• Part of integrated
strategy not stand
alone

35. AUDIENCE

36. What audience will fulfil your longer term needs?
• Regular Giving
– Who converts?
• Middle Donors
– Where do they
come from?$100 /
$1,000
• Bequests
– Highly engaged
supporters

37. Are the best audiences saturated?
• For some
– Best premiums to the best swapped names (65+ market)
• 80% duplication rates
• Each time you swap you risk money in warm
• Facing the need to look elsewhere
• But if you have not done it yet …
– Previous best regions for F2F becoming harder
• More competition
• Exposure over time
• Reducing quality

38. Generations
Civics / Seniors Boomers Gen X Gen Y
Current Age 71+ 52 - 70 36 - 51 21 - 35
Giving Behaviours • 80%+ give
• Most likely to give
cash
• More likely to
donate goods
• 70%+ give
• Most likely to do
payroll giving
• More likely to support
peer-to-peer
• 70%+ give
• More likely to
fundraise
• More likely to
advocate
• Technology savvy
• 50%+ give
• More likely to
fundraise
• More likely to
advocate
• Technology driven
Where are we acquiring
them?
• Direct Mail
• Phone
• Door to Door
• Direct Mail
• Phone
• Face to Face / Door to
Door
• Two Step Digital
• Peer-to-Peer
• Phone
• Face to Face
• Two Step Digital
• Peer-to-Peer
• Face to Face
• Two Step Digital
• SMS
• Peer-to-Peer
Life stage affects propensity to give – younger people establishing careers, holding debt,
having families are less likely to give

39. Generations
Civics / Seniors Boomers Gen X Gen Y
Current Age 71+ 52 - 70 36 - 51 21 - 35
Giving Behaviours • 80%+ give
• Most likely to give
cash
• More likely to
donate goods
• 70%+ give
• Most likely to do
payroll giving
• More likely to support
peer-to-peer
• 70%+ give
• More likely to
fundraise
• More likely to
advocate
• Technology savvy
• 50%+ give
• More likely to
fundraise
• More likely to
advocate
• Technology driven
Where are we acquiring
them?
• Direct Mail
• Phone
• Door to Door
• Direct Mail
• Phone
• Face to Face / Door to
Door
• Two Step Digital
• Peer-to-Peer
• Phone
• Face to Face
• Two Step Digital
• Peer-to-Peer
• Face to Face
• Two Step Digital
• SMS
• Peer-to-Peer

40. Our donors are changing - meet Margaret
She has a Facebook and looks
regularly
Has an email address and keeps
in contact with family and
friends
Visits magazines and special
interest sites online forums etc.
Uses Skype to keep in contact with
family overseas
Still reads printed
Newspapers
Responds well to
traditional Direct Mail
Connect with professional
networks via linked in

41. Generations
• Civics / Seniors were hot but now huge pressure on them
– Before you look at acquisition → retaining and growing those you
already have is more valuable
• Boomers looking hotter
– Bought in the 80’s, wealth now with less intention to have any left
– Life-stage for giving
• Gen X & Gen Y are hot and cold
– Volume recruitment opportunity
– Low commitment – what percentage are still there 4 years later?
– Want transparency and control

42. Generations
• Who do you need and why?
– $$ now
– Voices now
– $$ increasing into the future
– Increasing number of voices
– (Ongoing) participation
– Big bequest pay days down the track

43. Regardless of Generation
More channels = More
opportunity
They use multiple
channels but in varying
degrees
• Some for responding
• Some for consuming
Establishing channels
early is better
You can increase
channel penetration

44. TO THINK ABOUT

45. Measuring ROI / Value beyond the campaign
ltv2014
Warm Costs Contact % Pack/Call Postage F2F cost Total cost
Cash program 100% $1.50 $0.41 $0.00 $1.91 1
F2F RG 90% $0.00 $0.00 $15.00 $13.50
1 $0 $0 $0 $435,000 $0 $0 $0 $0 $371,000 $806,000 EOYR 100% $1.00 $0.41 $0.00 $1.41 Ongoing DM Ongoing Premium
2 $0 $0 $0 $1,000,000 $0 $0 $0 $0 $314,433 $1,314,433 RG Conversion 50% $12.00 $0.00 $0.00 $6.00 100% 100%
3 $0 $0 $0 $1,000,000 $0 $0 $0 $0 $314,433 $1,314,433 RG Prem Conv 35% $12.00 $0.00 $0.00 $4.20
4 $0 $0 $0 $970,000 $0 $0 $0 $0 $314,433 $1,284,433 RG Servicing 100% $10.00 $1.10
5 $0 $0 $0 $940,900 $0 $0 $0 $0 $314,433 $1,255,333 6 7%
6 $0 $0 $0 $912,673 $0 $0 $0 $0 $314,433 $1,227,106
7 $0 $0 $0 $885,293 $0 $0 $0 $0 $314,433 $1,199,726 Activity Cash Resp RG Resp Cash Ave RG Ave Year 1 ROI
8 $0 $0 $0 $858,734 $0 $0 $0 $0 $314,433 $1,173,167 DMCash 2.000% 0.000% $35.00 $0.00 0.00 3
9 $0 $0 $0 $832,972 $0 $0 $0 $0 $314,433 $1,147,405 DMCash Prem 8.000% 0.000% $33.00 $0.00 0.98
10 $0 $0 $0 $807,983 $0 $0 $0 $0 $314,433 $1,122,416 F2F RG 1 0.000% 90.0% $0.00 $30.00 0.00
F2F RG 2 0.000% 95.0% $0.00 $35.00 0.00 3
Cash Inserts 0.500% 0.000% $66.00 $16.00 0.00
RG Inserts 0.000% 0.080% $66.00 $16.00
RG O/L leads 0.000% 7.000% $0.00 $15.00 0.00
Expenditur Acq Warm Conversion Net Inc Expenditure Gross Inc Net Inc Cash RG C DRTV 0.000% 0.011% $0.00 $23.80 0.00
Year 1 $889,741 $307,882 $195,561 $5,901 -$380,396 $889,741 $509,344 -$380,396 9,330 0 #
Year 2 $1,731,570 $707,775 $762,142 $53,457 -$208,196 $2,621,310 $2,032,718 -$588,592 30,777 0 # F2F 1 F2F 2
Year 3 $1,871,288 $707,775 $1,779,769 $108,514 $724,769 $4,492,599 $4,628,776 $136,177 52,225 0 # 10% 15%
Year 4 $1,919,230 $686,542 $2,533,135 $154,376 $1,454,822 $6,411,829 $8,002,828 $1,590,999 73,029 0 # DMCash $0.80 $0.60 $0.00 $1.00 $1.42
Year 5 $1,961,149 $665,945 $3,235,135 $193,281 $2,133,213 $8,372,978 $12,097,190 $3,724,212 93,210 0 # Prem DMCash $1.15 $2.50 $0.00 $1.00 $3.73
Year 6 $1,988,702 $645,967 $3,879,553 $226,074 $2,762,892 $10,361,679 $16,848,783 $6,487,104 112,784 0 # F2F RG 1 $0.00 $0.00 $300 $5.00 $304.50
Year 7 $2,006,202 $626,588 $4,469,475 $253,498 $3,343,359 $12,367,881 $22,198,344 $9,830,463 131,772 0 F2F RG 2 $0.00 $0.00 $321 $5.00 $326.05
Year 8 $2,015,024 $607,790 $5,010,120 $276,212 $3,879,099 $14,382,905 $28,092,467 $13,709,563 150,190 0 Cash Inserts $0.00 $0.25 $0.00 $1.00 $0.26
Year 9 $2,015,275 $589,557 $5,530,781 $294,801 $4,399,864 $16,398,179 $34,507,606 $18,109,427 168,055 0 RG Inserts $0.00 $0.25 $0.00 $1.00 $0.25 2
Year 10 $2,007,211 $571,870 $6,065,690 $309,779 $4,940,127 $18,405,391 $41,454,945 $23,049,554 185,385 0 RG O/L leads $2.50 $14.00 $0.00 $5.00 $9.85
DRTV $0.02 $4.64 $0.00 $5.00 $0.02 0 1
0
Lowest net income point is -$1,086,273 in Month 25 0
0
Expenditur
e Expenditure Gross Inc Net Inc
Year 1 $1,388,265 $1,388,265 $8,172,618 $6,784,353
Year 2 $2,214,230 $3,602,496 $16,872,419 $13,269,924
Year 3 $2,332,930 $5,935,426 $26,364,384 $20,428,959
Year 4 $2,356,176 $8,291,601 $36,404,320 $28,112,718
Year 5 $2,361,754 $10,653,356 $46,984,482 $36,331,126 Acquisition Breakeven Month is Month 36
Year 6 $2,374,895 $13,028,251 $58,028,944 $45,000,693
Year 7 $2,379,255 $15,407,506 $69,493,066 $54,085,559
Year 8 $2,376,086 $17,783,593 $81,336,743 $63,553,150
Year 9 $2,365,386 $20,148,979 $93,548,535 $73,399,557
Year 10 $2,347,313 $22,496,291 $106,150,657 $83,654,366
Year F2F RG F2F RG 2 Cash DM
Cash DM
Prem
Thankyou Total cost
Executive Summary
Acquisition
Cumulative DonorsCumulativeAnnual Income
Pack/Call
Cost F2F Cost
Warm DMProgram
RG Conversion in month
F2F Attrition
Bequest Income
Major Donor Income
Cash Inserts RG Inserts RG O/L leads DRTV Fixed Costs Total
Acquisition Spend
$11,464,121
$11,843,677
Non Starter Rate
Gross Income
$8,172,618
$8,699,801
$9,491,965
Acquisition + Existing
Annual Income Cumulative
DRTV Attrition
O/L Lead Attrition
Acq Costs Lists and Post
$12,211,793
$12,602,122
Net Inc
$6,784,353
$6,485,571
$7,159,035
$7,683,760
$8,218,408
$8,669,567
$9,084,866
$9,467,591
$9,846,407
$10,254,810
$10,039,936
$10,580,162
$11,044,462
0.6 0.9
1.4
1.8 2.1 2.4 2.7 2.9 3.2 3.5
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Year
9
Year
10
NewROIby Year
-$2.0
$0.0
$2.0
$4.0
$6.0
$8.0
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Year
9
Year
10
Millions
New Income by Year
Net Income Gross Income
0.6 0.8
1.0
1.2 1.4 1.6 1.8 2.0 2.1 2.3
0.00
0.50
1.00
1.50
2.00
2.50
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Year
9
Year
10
Cumulative NewROI by Year
-$10.0
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Year
9
Year
10
Millions
Cumulative New
Income by Year
Net Income Gross Income
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Year
9
Year
10
Thousands
Est Major Donor Income
by Year (newDonors)
Est MD Income
$0
$500
$1,000
$1,500
$2,000
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Year
9
Year
10
Thousands
Est BequestIncome
by Year (newDonors)
Est Bequest Income
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Year
9
Year
10
CombinedCumulative ROI by Year
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
Year
1
Year
2
Year
3
Year
4
Year
5
Year
6
Year
7
Year
8
Year
9
Year
10
Millions
CombinedCumulative Income by Year
Gross income Net Income
-$5.00
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
1
6
11
16
21
26
31
36
41
46
51
56
61
66
71
76
81
86
91
96
101
106
111
116
Millions
Acquisition Breakeven Month is Month36
Lowest net income point is -$1,086,273
in Month 25
• ROI 1 year and 5
year
– Consider ALL
costs
– Consider ALL
income

46. Direct to Bequest

47. Different Quality Donor Groups
Lower volume
for better quality
Higher Volume
for bigger
prospecting pool
High Value
recruitment

48. THANK YOU
Fiona McPhee
fiona.mcphee@paretofundraising.com
Twitter: fimcphee
Phone: +6421 336 905
Web: www.paretofundraising.com