Saturday, January 30, 2010

Should You Buy A Donor List?

As the new year of fundraising gets underway and you’ve evaluated your 2009 year-end performance, you may be considering purchasing a donor list to bolster your 2010 giving. But, should you? How do you evaluate whether this is a good idea?

Take Arrowhead Management’s quick quiz to determine whether your giving program – and organization’s bottom line - would benefit from purchasing a list:
  1. Have you experienced high donor retention, but negligible donor growth rate over the last two years?

  2. Do you understand why your donors give to you?

    • By this we mean, statistical analysis to determine the top drivers that motivate your donors to give, not the musings of an occasionally engaged Board member. For instance, if you’re Planned Parenthood, your donors are liberal and well-educated women.

  3. Do you have the time and capacity necessary – as well as a strategy – to cultivate this list over the next 12 months?
At the minimum, you must answer yes to questions 2 and 3 before buying a list will increase your revenue. Also, if you have short-term cash flow challenges and think buying a list will solve these, we advise against it.

Prospecting requires a significant investment of both capital and human capital and you likely won’t reap the financial benefits for at least one year. Just sending out your “best” appeal from 2009 to this list won’t significantly improve your bottom line.

If you’re thinking about buying a list, we recommend doing so sooner rather than later, so you have an entire giving cycle to introduce and cultivate prospects before your next year-end ask.

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