Efficiency is a flawed metric

The baker who bakes a cake fastest and cheapest usually doesn’t have the best tasting cake.

And the fundraiser who yields the most immediate return for the least amount of dollars spent usually doesn’t have the happiest, most generous donors.

Efficiency is a flawed metric.

In our latest study, The Missing Middle: Why Neglecting Middle Donors Is Costing You Millions, Roger Craver says, “Transactional analysis of fundraising by most direct mail people is that all the analytics are geared toward efficiency. Which part of the file do I use to get the most return for this particular of campaign? None of these metrics has anything to do with the effectiveness in terms of how they are helping me keep this donor.”

Finding the bit of the file that gets the most immediate money for the least expense is a recipe for ignoring one of the most productive donor segments on your file: Middle donors.

This group represents the most significant block of money, commitment and loyalty in a donor file because they will be retained and upgraded far more than smaller donors and far more than major donors — if cultivated well.

But because the long-term value doesn’t happen overnight, fundraisers often focus their efforts on the parts of the file where they can prove out an investment in 0-12 months or 13-24 months.

In order to solve this problem, we have to rethink organizational priorities and metrics.

Roger adds, “In the data, organizations will find that loyal direct mail donors are a significant well spring for middle donors, then major donors and almost always for planned giving.”

Instead of efficiency, we should be looking at cradle-to-grave long-term value metrics first and foremost.