How Long to Break-Even?

New donor acquisition can be a drag on your cash flow. It seems that most acquisition loses money out of the gate, and this impacts cash flow.

However, the payoff is in the subsequent giving of the acquired donors. Or so we've been told. What does this look like? The following graph shows Long-Term Net Revenue per New Donor for one organization:

This graph shows the average net revenue given by each new donor from one acquisition campaign. We see that the campaign lost money initially. There was a loss of about $7.50 for each donor acquired. If 10,000 new donors were acquired that would be a loss of $75,000. That's a hit to the current year's cash flow.

Fortunately, these donors continued to give (and the organization continued to offer new chances to give). By the sixth month, the subsequent giving of these donors was sufficient to recover the acquisition loss (break-even). This is excellent news.

I've run this graph on many organizations and many acquisition programs (TV, radio, DM, etc.). Some break-even within twelve months and some take as long as four years. How can a program sustain itself if it takes four years to recover an acquisition investment?

My recommendation is to run this analysis on each of your acquisition programs. Know when your campaigns break even. Sure Long-Term Value is important, but you need to count the cost. And you need to understand the impact acquisition has on your current year cash.