Annual Giving and Direct Mail Flashcards

What is the primary purpose of an annual fund in a nonprofit organization?

Answer: To provide a broad base of unrestricted operating support from many donors

The annual fund provides broad-based unrestricted operating support, allowing the organization flexibility to meet day-to-day expenses and programmatic needs.

Which metric best measures the effectiveness of a direct mail acquisition campaign?

Answer: Cost per dollar raised (CPDR)

Cost per dollar raised (CPDR) measures how efficiently acquisition spending converts to revenue, making it the most comprehensive effectiveness metric.

In direct mail fundraising, what does 'RFM' stand for?

Answer: Recency, Frequency, Monetary value

RFM (Recency, Frequency, Monetary value) is a segmentation model that ranks donors based on when they last gave, how often they give, and the size of their gifts.

What is the typical response rate range for a direct mail renewal letter sent to lapsed donors?

Answer: 2% to 5%

Lapsed donor reactivation mailings typically achieve 2%–5% response rates, higher than cold acquisition but lower than active donor renewal.

Which element of a direct mail appeal package has the greatest impact on response rate?

Answer: The list and offer

Research consistently shows that the mailing list quality and the strength of the offer (the ask) have the greatest influence on response rate.

A donor who has given every year for 5 or more consecutive years is typically categorized as which type of donor?

Answer: Loyal or consecutive donor

Donors who give consecutively for multiple years are classified as loyal or consecutive donors and are prime candidates for upgrade and major gift conversations.

What is 'donor attrition' in the context of annual giving?

Answer: The percentage of donors who do not renew their gift in a subsequent year

Donor attrition (also called lapse rate) measures the percentage of donors who gave in one period but did not renew in the next period.