Give $10 on 10/10/10 to support our cause.  Cute, huh?  Kinda catchy?  Low price point could work well in the current economy.  Easy to implement on Facebook, Twitter, your website or elsewhere online, right?  Would probably get more responses than an offer asking for $25, $50 or $100 gift.  Right? 

All of those points above are probably technically correct.  But what do they do to the quality of your donor file?

Take, for example, this ‘Just $5’ e-mail appeal from MSPCA that I found tonight on SOFII. 

On the surface, it looks like a great campaign.  The organization touts that they raised $9,000 from 600 donors, and attracted 243 new donors.  In a short amount of time, raising $9,000 and acquiring 243 new donors are both pretty good accomplishments.

But . . .

$9,000 / 600 = $15.  That’s a $15 average gift.  From an online donor.  We know that typically, online donors make larger contributions than do direct mail donors.  So to have a $15 average gift to an online campaign should be of concern.  Two things will likely come of this.  First, I’d bet that existing donors were downgraded through this very low dollar ask campaign.  Second, the newly acquired donors are probably lower quality than those that could have been acquired with a higher dollar offer.

Once you’ve downgraded an existing donor, you’ll have to work even harder to bring them back up to their original giving level – or to increase their giving to a level above their original gift amount.  And you also run the risk of more of these downgraded donors lapsing (especially if your segmentation strategy calls for suppressing donors with a last gift below the threshold of their recently downgraded gift amount).

If you’re acquiring donors through a low dollar online offer like this, you will want to pay special attention to second gift conversion, retention and long-term donor value.  It is more likely than not that low dollar donors will never make a second gift.  And for those that do, the likelihood that they will continue giving is also lower than those donors who come on your file at a larger first gift amount (unless the donors acquired are monthly donors via credit card or EFT).  It’s also very difficult to upgrade a donor that comes on your file at a very low amount. 

I applaud the organization’s attempt to increase revenue, acquire donors, and cast a wide fundraising net.  However, I am concerned that this particular effort may do more harm in the long-term than the good it will do in the short-term.