The dark secret of “churn-and-burn” fundraising

You’ve probably heard of “churn and burn” fundraising.

It sounds like something bad. And it is.

Here’s what “churn and burn” isn’t: High-frequency asking. (At least, it’s not just that.) High-frequency asking can be a part of a smart fundraising strategy for some organizations.

Churn and burn is more insidious. It’s fundraising that makes little attempt to build relationships with donors. The primary goal is to send as much mail as possible.

In its worst form, churn and burn is not a fundraising strategy. It’s a print and mail strategy. It usually happens when a large (but unsophisticated) nonprofit is under the influence of an ethically challenged direct mail production company.

What they do is maneuver nonprofits into sending the maximum quantity of mail — at the expense of pretty much any other goal. It usually works like this:

  • Massive acquisition mailings.
  • Complex, expensive packs.
  • Freemium-driven (sometimes with over-the-top freemiums, like blankets, calculators, and more).
  • Very low ask amounts (often $5 or even less).

The goal is maximum response — average gift is less important.

They then mail the heck out of the donors who respond using the same strategy: freemium-focused, low-ask, expensive packs.

The result: A lot of donors with some unfortunate characteristics:

  • Low retention rate
  • Low average gift
  • Low response to anything but fancy freemium packs

The main thing, though: The presses keep humming at a high level — very profitable for the printer.

Some who practice this kind of fundraising say that the prodigious number of donors is a large pool of potential planned giving donors and even major donors. There may be enough of these donors in some cases to make the whole exercise pencil out in the end.

But often, there’s little effort to find the gold hiding among the low-dollar donors.

In fact, I once encountered a churn-and-burn operation that actually charged the charity to rent names of their own lapsed donors — names the charity already owned! But the printer also owned the list-rental operation, so they got a commission for every needlessly rented name. On top of the profit and commission on the printing. (It was a whole new way to squeeze more revenue out of a nonprofit that wasn’t paying attention!)

So does churn-and-burn “work”? Can it fund an organization?

It used to. But postage and printing costs have risen to the level where it’s almost impossible.

It still exists because there are unethical printers in relationships with clueless (or in some cases colluding) clients who let them get away with wasteful fundraising. It generally spins off at least some net revenue at low efficiency. If the volume is high enough, the charity may be happy with the revenue, unaware of what they’re not achieving.

Churn-and-burn should have disappeared years ago. But with the profits to be made by printers, there are still willing participants.

Real fundraisers have left it behind, preferring value over volume and building relationships with donors.

I hope that’s how you’re doing it!

More on churn-and-burn:


Comments

Leave a Reply

What this blog is about

The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

Blog policies

Subscribe

Get new posts by email:

About the blogger

Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


Archives

Blogroll

Categories


Search the blog

The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

Recent Comments

About the blogger

Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.

Blog Roll

someone’s blog