I once sat across from the leadership team of a major national nonprofit, one that has faithfully served families across our nation for decades. They were beaming with pride about their fundraising numbers. "We raise $26 million annually through our mail program!" they announced.
Then I showed them the real math: $26 million raised, but $22 million spent to get there.
Their net?
Just $4 million—a 15% efficiency rate that would make any business owner cringe.
But here's the kicker: when I suggested redirecting a few million from their mail volume to hire relationship-building staff, they simply said, "That's not how our model's built, and we're not comfortable with reducing our mail volume."
This is the addiction that's killing nonprofit fundraising.
From Transactions to Transformations
After helping over 1,000 nonprofits raise more than a billion dollars, I've seen this pattern more often than I care to admit.
Organizations have become addicted to gross revenue instead of focusing on net impact. They're so busy chasing the next transaction that they've forgotten the power of relationship.
I should know something about this. I built my career on direct response marketing—direct mail, DRTV, email campaigns, Connected TV, etc. But about a decade ago, I started feeling conflicted about this approach. If we really want to accomplish big vision and move the needle on homelessness, human trafficking, global evangelism, hunger, and poverty, we have to stop just kicking the can down the road.
The breakthrough insight came from observing the organizations that were doing this well: small grassroots nonprofits with maybe 250 donors who had built deep, lasting relationships. They understood something that bigger nonprofits had forgotten—Relationships Change Everything™.
When you invest in relationship, revenue flows naturally.
The Psychology Behind the Problem
Why do so many organizations stay stuck in this cycle? It's not just about the numbers—it's about psychology. Building meaningful donor relationships requires leadership to be front and center with donors on an ongoing basis. Human beings have to put themselves out in the world and engage with other humans in what may be messy, imperfect, and unpredictable relationships. It means dealing with the angst of personal solicitation, of making an ask and potentially getting a no.
For many nonprofit leaders, it's easier to write a check to a direct marketing agency than to navigate the emotional complexity of relationship building. They can focus on program management and service delivery—the work that feels less risky and more comfortable.
But this comfort comes at a massive cost.
The Path Forward
The solution isn't abandoning direct response entirely—it's about strategic focus. If donor A can only give $100 and donor B can give $10 million, you do a disservice to your mission by not spending more time and energy with donor B. It's not popular to say in our sector, but it's reality.
Organizations need to shift from measuring gross revenue to tracking what actually matters: donor retention rates, relationship depth, annual value per donor, and net revenue growth. They need to invest in people who can build relationships, not just process transactions.
The organizations making this shift are seeing dramatic results: higher donor lifetime value, better retention rates, and most importantly, more money going directly to mission work instead of marketing agencies and the postal services.
The Choice is Yours
Every nonprofit faces a choice: continue churning through donor names with mechanized programs, or invest in the kind of transformational relationships that create lasting change.
The question isn't whether you can afford to make this shift—it's whether you can afford not to.
After all, if you're not willing to build relationships with your most generous supporters, how can you expect them ever to give their best gifts to you?
Our team helps level up leadership for our partners every day and we can help you too. Email me at andrew@dickersonbakker.com, or call or text me at 612.201.1967 if you want to talk about how to gain clarity for your organization.