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October 1st, 2018

Every charity has thousands (and sometimes hundreds of thousands) of lapsed members and donors. At what point should these previous supporters be purged from the system and no longer solicited?

Five years? Ten years? Never?
Amazingly, there are two easy answers to this question…

The advent of fundraising coops (like the MarkeTeam Prospect Database) provides an immediate answer since charities can now discover which of their lapsed supporters are still actively contributing to other nonprofits, or even nonprofits in your sector. If your lapsed supporter has stopped giving to other charities or has significantly decreased their giving, they are less likely to be a qualified prospect for an immediate gift.

However, if they were a long-term consistent supporter—and they are of retirement age or older—they should be evaluated as a planned giving prospect. Once again, there are many sources for wealth screening capabilities in addition to coops to determine potential for a 5-figure or higher planned gift. If qualified, then a regular schedule of communications biannually or quarterly should be implemented to keep your organization top of mind that may lead to a planned gift at low incremental communication cost.

The second answer to the value of lapsed supporters is a bit more difficult: long term value (LTV). With a large database of previous donors, former supporter reactivation should be compared to the cost of identifying new supporters and then tracked over a two to three year period. Typically, recaptured lapsed donors and members have higher LTV than new contributors, especially since efforts can be targeted to the better/higher dollar former supporters.

Age is another important factor for evaluation. If new supporters can be sourced at a similar investment level but at a somewhat younger age when they are more engaged digitally, charities have more levers that can be managed to cultivate and encourage support over a longer period, leading to greater lifetime yield. Lapsed supporters are typically older (otherwise they couldn’t have lapsed for multiple years), have lower digital interactivity, and have already shown that they are somewhat resistant to your messaging or mission.

THE ANSWER—Compare the up-front response and investment of lapsed households to new households, and then track subsequent giving over the following years. The math is somewhat tricky but typically, lapsed households whose average gifts are equivalent to new supporters are better upfront (no list rental cost and higher average gifts, if selected correctly) and often have better one-year retention than new donors.

By modeling a lapsed file using external data, multiple tiers of former supporters can be developed and compared against similar tiers of new name acquisition. By interleaving upfront costs and LTV tier-by-tier between acquisition and recapture efforts, your organization can develop a strategy that optimizes short-term and long-term value, and grows your file cost-effectively!

By Kelly Mostowy | Account Executive

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