ABSTRACT
It is widely accepted in fundraising, as in commercial marketing activity, that it costs five times as much to conduct business with a new customer than with an existing one. While fundraisers can expect to generate a return on investment (ROI) of up to 5:1 from a campaign targeting existing (warm) donors, acquisition campaigns are more likely to require an investment, or at the very best achieve break-even, than to generate a positive return. More enlightened and informed non-profits tend to be content with this scenario in the confidence that they will be able to cultivate profitable relationships with the donors they recruit over the full duration of their relationship with them. Less well-informed and experienced organizations frequently find it hard to justify and explain high recruitment costs to Board members.
