Stop Prospecting! Do This Instead to Raise Revenue

When your non-profit is struggling economically and falling short of its fundraising goals, it's natural to start looking for more major donors.

You want to make up the difference, so you tell your team to find new prospects, fill the pipeline, and bring in more money. It makes sense on the surface. More donors should mean more revenue, right?

But before you ask your team to do more prospecting, there’s a bigger question you need to consider: What if some of the revenue you need is already sitting in your donor file?

At Veritus, we regularly see non-profits overlook opportunities to grow giving from donors they already know. Meanwhile, their fundraising teams are stretched thin, trying to build new relationships while keeping up with the ones they already have.

There's a real cost to that approach. You can spend months trying to bring new donors into the pipeline while losing revenue from the donors who are already giving to your organization.

So before you add more work to your team's plate, take a closer look at your existing donor file. You may find more revenue than you realize.

Three Places to Look for Hidden Revenue

While evaluating a non-profit's donor file, we often find opportunities that aren't obvious when you're looking at overall fundraising results. Here are three places I'd start.

1. Hidden donor attrition

Some donors are giving less than they used to, or have stopped giving altogether, without anyone recognizing the trend. New donors can mask those losses, making your overall revenue look healthy while the value of existing relationships declines.

2. Clogs in your pipeline

Donors can sit in the same stage for months without being qualified, engaged, or given a clear next step. Adding more prospects won't solve the problem if your team can't move existing relationships forward.

3. Donors who could give more

Some loyal supporters may be ready to increase their giving, but without thoughtful stewardship, meaningful offers, and a plan tailored to their interests, they may never get the opportunity.

These are the places I'd look before asking your team to find more prospects. However, hidden donor attrition is the area that deserves most of your attention.

The Revenue Growth You're Celebrating May Be Hiding a Problem

Let me give you an example of what this can look like.

Imagine we're evaluating a major gift program and looking at all the donors who gave at least $1,000 cumulatively across two consecutive years.

In Year 1, the program raises $2,560,000. In Year 2, that figure grows to $3,100,000, an increase of 21%.

That's great news, isn't it? Most non-profit leaders would be thrilled to see that kind of growth. You might assume the program is healthy and that your team is doing a good job building relationships with donors.

But let's look a little closer. Instead of comparing the program's total revenue from one year to the next, let's look at the same donors who gave in Year 1 and see how much they contributed in Year 2.

Here's what we find: Those donors went from giving $2,560,000 in Year 1 to just $1,305,600 in Year 2. That's a loss of nearly 49% of their value. So how did the program still grow by 21%?

New donors contributed $1,794,400 in Year 2, more than making up for the revenue lost from existing donors. Their giving masked what was happening with the donors who had supported the organization the year before.

Ultimately, the program was growing overall, but the value of its existing donors was declining dramatically. This is the kind of pattern that keeps emerging inside major donor files we assess, where annual donor value attrition is roughly 40% to 60% among the same donors.

And in many cases, the organization hasn't recognized how much value it's losing.

You May Not Need More Donors. You May Need a Better Plan.

The best way to understand what's happening in your donor file and give your fundraisers the support and strategy to respond starts with asking better questions.

Are your existing donors giving less than they did last year? Where are donors getting stuck in your pipeline? Which relationships could grow with more thoughtful stewardship and a clearer plan?

Once you can see those patterns, you can begin to address them.

We've seen the difference this can make with the fundraisers we work with. When donors are managed and stewarded well, annual value attrition among managed donors can drop from those earlier 40%–60% numbers to just 7%–12%.

That's a significant difference. And it shows why taking care of your existing donor relationships can have such an important effect on your revenue.

This doesn't mean you should stop looking for new donors. Prospecting has an important place in a healthy major gift program. But if you're relying on new donors to make up for losses in your existing file, you may be overlooking an opportunity to make your fundraising more sustainable.

Your team is already working hard. Before you ask them to take on more, make sure they're getting the most out of the relationships they've already built.

Find the Hidden Revenue in Your Donor File

This is a good time to let you know I'm hosting a FREE webinar on Thursday, November 5, at 2 p.m. Eastern called “You Don’t Need More Major Donors: How to Increase Revenue Without Chasing New Donors.”

I'll walk you through how to identify hidden revenue in your donor file, recognize where giving is slipping away, and uncover opportunities to help offset grant losses, budget cuts, and other funding pressures.

I'll also share our FREE Donor File Assessment, which gives Veritus an opportunity to evaluate your data and help you see where revenue may be hiding.

If you're feeling pressure to raise more revenue but aren't sure where to find it, look inward. Your next opportunity for growth is likely already in your file.