Don’t let anyone fool you when discussing fundraising programs – remember “Nothing but Net” matters.

Whenever talking fundraising, remember to always focus on “Net” – a.k.a. net revenue.  Fundraising is designed to raise money to support your mission.  Every decision should be considered based on how it affects the overall Net, or the amount your organization will have as a result of the decision.  Whether it’s a test in a specific program, a yearly mailplan, or a 3-year plan, it’s always about Net.  Consultants and experts will always tell you other things are more important (usually when their advice didn’t work) like response rate or average gift, but it really is all about Net revenue.

Direct mail is a necessary tool to raise money to achieve your organization’s mission.  You always need to focus on what your organization will net on any program or series of programs.  All the other metrics are just variables in the calculation of Net.

Let me put it in basketball terms.  Is there anything better than scoring more points than the other team?  Would you prefer that your team have more points or be more athletic, have better looking uniforms, or better shoes?  I prefer more points.

• Renewal programs are designed to raise Net for the organization this year and in future years.  It’s hard to argue anything is better than netting more from a renewal program.
• Acquisition programs are designed to bring on donors to make money in the future.  Acquisition needs a time horizon.  We all invest in acquisition, but without it our Net raised to support our mission will be dramatically lower.  So if you net more over 2 years you are likely better off than when maximizing any other statistic.
• Lapsed recover is designed to bring people back to the active file to raise more money in the future.

Net is the right long-term metric; it will never fail you if you focus on how are you netting.  If someone questions your acquisition strategy, tell them how much you will net over three years.  Ask how any change will net you more money.  For example, if you are interested in a lapsed recovery program, many times people will tell you it’s about how many people you reactivated.  This is important, but you must ask over a period of time – what will I net?  The goal is to reactivate donors in order to net more for your organization, so if reactivating them doesn’t lead to more Net, who cares how many came back?  Remember, when someone tells you response rate matters more or even cost of a package, postage savings, average donation, or any other statistic . . . I always want more Net.

– Don McKenzie is the President & Chief Growth Officer at Innovairre, which supports more than 500 nonprofit organizations around the world. Don can be reached at DonM@Innovairre.com.