Say you mail 10,000 people. That costs $1 each so $10,000 total. (Today, with postage and inflation it’s a struggle to keep it below $2 but in the late 90s $1 would have been doable. It also includes the cost of list rental; note lists are more art than science, you never know which lists will do great and which ones will bomb.) 0.85% on average will receive it, open it, read it and are intrigued by the given message, not throw it away, read it again, think about it, read it one more time, and fill it out and send in a donation. That’s 85 people. Half will do it within the first ten days, the remainder in a long tail after. 85 people x $25 LP dues equals $2,125. $10,000 in costs to get 85 donors who give $2,125, for a loss of $7,875. Average cost per new donor is $117.
Year 2 it gets a little brighter. You do all that again, another $10,000 to get 85 donors who give $2,125. But you also mail the 85 people from last year. Second year retention will be about 50%, so 85 times 50% is 43 people sending in $25 so $1,075 total. Mailing them 8 times in a year (you’ll need several reminders to get that 50%) costs $680. All told, $10,680 in costs to have 128 donors who give $3,200, for a loss of $7,480.
Year 3 we do all that again, and mail those 43 first-year donors. At this point donors mostly stick with you and retention rate is 80%. 43 x 80% is 34, and 34 x $25 is $850. Adding it up again, $11,024 in costs to have 162 donors who give $4,050, for a loss of a$6,974.
And so on. Without major gifts (identifying a few in that 162 who can give much more), you never actually break even at a $25 level. The average donor will give about 3.3 times their first gift over their lifetime. With a $117 average donation the program could break even in year one, or at a $60 donation you break even in year 5. The lifetime horizon giving of someone breaks even at about $35. In other words, direct mail with dues under $35 won’t be a money maker by itself.
This is why when I was chair I de-emphasized prospecting for $25 members as it just didn’t pencil, and ended the program where we paid bounties for new members. Instead I (1) pushed the $5 monthly giving ($60 a year) which as noted could break even in 5 years, (2) reassigned staff to upgrading existing donors including max donors, re-asking lifetime donors to give more (ceasing to ask lifetime donors to give big amounts is intuitively understandable but demonstrably wrongheaded), and setting up events and more projects like Frontier Project to give toward, and (3) had staff and lnc do more phone calls on renewals to cut the $8 cost of mailing renewals. We kept LP News and emails but emphasized positive tone, activity, and future plans for success. The net result was lower costs and two of the strongest fundraising years (2020 & 2021) of the party’s history, including a post-election year doing better than the election year, and the post-Archimedes membership high point of 20,500.
People who’ve never lived into the numbers may think response rates are 100x what they actually are or convince themselves they’ll beat the averages 2x or 3x, or simply just add up the revenue but not the costs. (A lot of consultants aren’t helpful here, all but promising that they’ll help you beat the odds, tho the costs are yours not theirs.)
All this to say it’s really very easy to lose your shirt on fundraising $25 at a time, or $35 or even $50, especially by mail.
JBH – your example numbers were nowhere close to what our results were in the 1990’s. There is a report on LPedia.com that has list by list results for three separate mailings. Why make up numbers when the actual results are readily available.
The numbers on LPedia can be found here: https://mywikis-wiki-media.s3.us-central-1.wasabisys.com/lpedia/Archimedes.pdf
Data is on page 15.
December 1997 mailings:
116,878 mailings
$36,232 cost
$26,159 revenue
596 donors
0.51% response rate
$0.31 cost per mailing
$43.89 average contribution
$10,073 Net Loss
February 1998 mailings:
227,490 mailings
$73,876 cost
$91,419 revenue
2,296 donors
1.01% response rate
$0.32 cost per mailing
$39.82 average contribution
$17,543 Net Gain
April 1998 mailings:
252,680 mailings
$73,693 cost
$55,329 revenue
1,292 donors
0.51% response rate
$0.29 cost per mailing
$42.82 average contribution
$18,364 Net Loss
Combined that results in:
597,048 mailings
$183,801 cost
$172,907 revenue
4,184 donors
0.70% response rate
$0.31 cost per mailing
$41.33 average contribution
$10,894 Net Loss
Also note that on page 12 it says that they actually had 1,020,591 mailings, which leaves 423,543 undocumented results. It says on page 4 that the project had recruited more than 6,000 new members, while only 4,184 are listed in the three batch mailing results. Assuming there were 6,025 new members, that leaves 1,841 for the undocumented mailings, which is a response rate among the undocumented results of 0.43%.
According to the February 2000 LP News…
https://mywikis-wiki-media.s3.us-central-1.wasabisys.com/lpedia/LPNews_2000-2_V15-N2.pdf
… from the start of the program through the end of 1999, 3.2 million mailings had been sent which generated 18,300 donors, for a response rate of 0.57%. Lower response rates in 1999 were already leading to reduced numbers of mailings in October of that year. “‘Our plan is to continue to test different recruitment letters, themes, and packages to try to get the response rates up to the 0.9% we need to break even with such lists.’ The party has also been hindered by declining response rates from repeat mailings to successful lists, said Dasbach,”
What JBH could have done — but chose not to do — to raise visibility and funds for the LP was to take a hard stance against the Covid mandates and lockdowns while he was chair of the party. Instead, the national LP stood by and did next to nothing during this most egregious assault on personal liberty. One wonders if this absence of opposition to tyranny was intentional.
Yes, JBH did not focus on your pet issue. Live with it.
Freedom is not just a pet issue. Most Libertarians believe freedom is the issue. This includes the freedom to breathe; the freedom to travel; the freedom to access and use one’s property; the freedom of association; the freedom to alternative health care. All of these freedoms were abridged by the government during Covid. Libertarians are supposed to support “all of your freedoms, all of the time.” Well, except they didn’t during Covid.
You do understand, Jake, that private businesses have every right to mandate masks for their employees and/or customers, right?
They also have every right to mandate vaccines, if they choose.
It’s called freedom.
LP and JBH were always against government mandates.
As far as private businesses, it’s up to them.
Again, freedom and liberty.
Bingo. We should also be against states such as Florida with Gov. DeSanctimonious, who pushed a state ban on businesses that wanted to mandate masks or vaccines. Government mandates are bad either way.
My business, my rules.
Right.
Government shouldn’t be mandating anything.
Private businesses, however, can mandate whatever they want.
Many so called libertarians, unfortunately, don’t seem to understand this.
JBH was against all government mandates.
But he still gets crap from “libertarians” for having the actual libertarian position on the issue.
I’m a Michigan Libertarian (Yooper) who believes our Governor Whitmer did the best job in the country when it came to lockdowns/preventions during the pandemic. Liberty might be essential, but science must always trump liberty. The founders of the libertarian movement didn’t have access to the same science and technology that we do today. Science should always be followed because it is neutral, while liberty is a fluid concept.
I’m not sure what any of that has to do with fundraising, and I avoided commenting on this tangent til now for that reason, but since comments about it keep being approved, Tommy seems to be mixing up science with religious faith. Science has never been neutral – it’s highly politicized, and always has been, most especially on anything anywhere approaching politically controversial issues.
Following “the science” is nonsensical as a political slogan. There are always, and have always been, disagreements among scientists on all sorts of subjects, and especially on how to best translate science into public policy. This dialectic or oppositional approach is essential for peer review and the scientific method to function. The notion that science is settled is scientism or a form of religious faith, not science.
I personally agree with Mr. Piontowski.
As for government restrictions and mandates on businesses, masking in public has been illegal in my state of Georgia under a 1951 law curtailing KKK activity, and many other States and DC had similar laws passed around the time as well. In writing this, I thought I remembered that it was also illegal under federal Ku Klux Klan acts passed in 1871. I have not found support for that, and don’t want to spend more Time on it, but did find this from the NY Times:
“New York’s 1845 law, the oldest anti-mask law in the country, was repealed in May 2020. The law, which made an exception for “a masquerade party or like entertainment,” was passed during an armed uprising by cash-strapped wheat farmers who disguised themselves as Native Americans during protests over feudal rent arrangements.”
I could go further into the subject as it pertains to my other state of Florida, the complicated relationship between government and businesses which are open to the public, sometimes subsidized by the public through the government, regulated and licensed by government in various ways, etc, but I’m straining to think of how to tie any of that back to fundraising.
Perhaps this is on topic since the tangent started with a discussion of the author of the comment which was elevated to an article here, although I won’t be surprised if the editor deems we’ve gone too far off course here. If not yet, I’d expect it if I went more in depth on those subjects. I would certainly expect the hammer to descend quite fast and hard if I likewise shared my perspective on the other tangent about world power political leader’s, so I suppose I shouldn’t comment on that.
It might be useful if the LP got out in front of the crowd and called Trump corrupt.
Maintaining that Putin is an enemy of the United States, as well as being a war criminal, and that Trump through his foreign policy, is aiding an enemy of the United States (for this there is a one-word description) and urging his impeachment and conviction on that charge, would also be positive.
That would be great to do as a big newspaper ad or anything else.
You all have an interesting idea of what’s positive or useful. Something tells me a point by point reply from an opposing perspective would not be approved here, but before my partisan or factional loyalties are therefore assumed, something actually directly related to fundraisers and fundraising that might lead someone to (equally wrongly) different factional loyalties on my part.
At IPR, X asks about whether it’s a coincidence that the theme of next year’s libertarian national convention – freedom calls – which was chosen through a fundraiser auction – is the same as the name of the telemarketing company owned by Angela McArdle’s husband Austin Padgett – Freedom Calls.
X also asks about the timing and reasons of Mrs. Padgett’s resignation from her 2nd term as LNC chair. At the time, she said she was resigning to take a soon to be revealed opportunity – as in job – which would make some heads explode. This was rumored at the time to be a Trump Administration job, perhaps underneath HHS Secretary Kennedy. More recently,I’ve seen only second or third hand reporting that she’s working as a paralegal outside government and running for a third term as LNC chair at the “freedom calls” convention.
Details:
https://independentpoliticalreport.com/2025/05/former-libertarian-chair-shares-details-of-trump-meeting-in-nh-liberty-forum-speech/#comment-2744200
The freedom calls theme was chosen through an auction which was used to fundraise for the lnc. Freedom Calls the company was, iirc, used as a fundraising contractor for the LNC during Mrs. Padgett’s previous term(s) before it was public knowledge that it was the chairwoman’s husband’s company. Both matters seem fundraising related to me, as well as worth further looking into. Particularly if it’s true that she will be running again …
“Maintaining that Putin is an enemy of the United States, as well as being a war criminal, and that Trump through his foreign policy, is aiding an enemy of the United States (for this there is a one-word description) and urging his impeachment and conviction on that charge, would also be positive.”
Go for it. That will definitely make news.
(Not to mention how much he is using his office to benefit personality from the crisis in the Middle East.)
Thanks Joe for explaining how it functioned with key details.
As originally posted when it was a comment,
Thank you, that was an interesting read. I agree with your point about $5/month. Even though that’s $60/year, people are more apt to pay more when it’s in smaller increments. But even more importantly, it’s typically charged on some type of card and remains opt out for 3-5 years or however long before the card expiration date and possibly other card info is updated. As opposed to opt in renewal you have to beg for each year with huge attrition rates and renewal costs.
Some people will opt out before the card expires and some will cancel the card or have insufficient funds, but it makes the process much smoother.
Thank you for also confirming my suspicion that online fundraising hasn’t fully hit its stride to the point of magically eliminating most of the cost.
(Questions:)
1. Did you ever try a boiler room of cold callers hitting up rented/purchased lists (or even the phone book or its modern equivalents)?
2. Textbanking?
3. If so, are any of these beating direct mail yet, or if not besting approaching cost effectiveness? (In your direct experience)
4. How effective were you bounty or phone/text/mail tree programs leveraging volunteers?
5. What other such approaches have you seen or tried and which ones were relative successes and failures?
(Clarification from the original: questions 1-4 are directly to the author regarding personal experience with organizations he has worked with, and question 5 is about what he has seen himself in indirect personal experience)
As further clarification of what I’m asking and what I’m not, and of whom:
George Phillies said
“As a thought, for answers read Viguerrie’s Go Big.. He may be wrong on issues, but he knows something about the topic of direct mail.”
I replied:
I’ve read it, and all his other books.
My question for Mr. Bishop-Henchman was about his own experience and current trends, and other such ancillary things as I listed.
(There are very few issues I’ve ever found Mr. Viguerie to have ever been wrong on, but I agree that even those who are generally wrong on the issues (that is, those who think he is generally wrong on the issues) can benefit from his expertise on direct mail.)
(Mr. Viguerie, incidentally, is a long time friend; I’ve known him since he was at Young Americans for Freedom in the early 1960s. Most people don’t know that he sought the AIP nomination in 1976.)
Regardless of how right or wrong I think Mr. Bishop-Henchman is on which public policy issues, I’m interested in his specific knowledge, to the extent he’s willing to share it, on these questions, as he is someone who has helmed at least two national organizations of some decent level of significance over recent years. If there are others reading with that level of recent organizational experience who are willing to share their knowledge without profit, I’m interested as well.
These are questions I ask other people in other places and contexts, public and private. Sorry if the way I originally phrased it was unclear – hopefully I’ve fixed it now and not made a worse mess.
” I agree with your point about $5/month. Even though that’s $60/year, people are more apt to pay more when it’s in smaller increments. ”
I agree. My credit card still gets faithfully charged $5/month for the LP long after I forgot when I had made that commitment.
The major theme of my LNC service and time as Chair was that there are limits to what volunteers can do, and at some point you need a sizeable paid professional staff to do key tasks like fundraising. (I disfavor contractor bounty programs for the same reason.) The fundraising team under me grew from 1 to 3 but they raised a lot more in a sustainable way: donations grew from 2019 to presidential 2020 to post-presidential 2021.
It was controversial, as a lot in the LP prefer that everything be done by volunteers and don’t really see the need for paid full time staff. It’s “free,” after all. But volunteer-based fundraising isn’t free. It makes the labor cost appear to be zero but someone has to prepare lists, monitor performance, do grunt work tasks. Some volunteers are amazing, some are not good at certain tasks, and some no-show because of other things in their life. Some efforts are wasted, some have to be redone. I mainly used volunteers to do thank you calls, but generally preferred that volunteers do non-fundraising things (ballot access, door knocking, campaigns, voter phone banking and text banking, state and local parties, etc.).
The first question I have is what does the bank charge to process each of those credit card or debit card transactions?
Around 2-3%. When I was chair I added the option for donors to pay a little more and “pay the service fee” for us. The vast majority of donors checked that box to do so.
That still exists. I think most people check it.