By James Oaksun, candidate for LNC treasurer
Originally published at LibertyForAll.net
I’ve done all the heavy lifting for you. The analysis is complete and these are the results.
First, a couple charts. (Click on charts to enlarge.) The first shows total revenue from itemized contributions, adjusted for inflation. We do this to put everything into constant dollars and prevent the current management from taking credit from the debasement of our currency.
As the current management has frequently stated, the first year of the cycle is typically the weakest. You can see that clearly here. Yet that does not explain why 2005 was weaker than 2001. Or why 2009 was weaker than 2005 – in fact, why 2009 was the weakest year of the last decade.
The next chart shows the number of itemized donors, adjusted for population growth. Population in the US increased by about eight percent this past decade. We should have gotten some boost from that, even if we were standing relatively still. Did we?
Our number of itemized donors dropped by nearly 50 percent this decade. That is right – nearly by half.
Folks, we’re moving backwards. All around us we see evidence of the forces of liberty moving ahead – with the Ron Paul campaign, with C4L, with YAL. But not with the Libertarian Party.
Using the FEC data I have constructed a database of Libertarian Party itemized donors from 2001 to 2009. I know who they are, where they are, how much they gave and when.
In total there are 5,120 names on the list.
111 of these people gave all nine years! Amazing! When I’m elected treasurer, I will seek them all out and give them a smile and a hearty handshake.
Interestingly, nearly 2,900 of the people – 56 percent of the total – gave only one time. Another 912 people – 18 percent of the total – gave just twice.
It is a law of fundraising that it is much easier to keep someone giving who has already given, than it is to find a new donor. Yet we’ve been failing at this miserably.
We can also use the data to construct lapse rates for both existing (gave at least once before) as well as new (never gave before) donors. The differences here are quite striking.
Sources indicate to me that the current management uses a “rule of thumb” of a 50 percent lapse rate after one year giving, and 15 percent for years two and later.
The data filed with the FEC indicates that, for first time donors, this is a wildly optimistic assumption.
Over the last nine years, the first year lapse rate for first time (never gave before) itemized donors was 75 percent! Only one in four gave again the next year. If the person gave again the second year, there was a 50 percent chance they would give the third year.
The situation is even worse if the person’s first contribution was in a presidential election year. In that case, the first year lapse rate is a mind boggling 86 percent!
Lapse rates for people who have given at some point previously are much better. First year lapses average 38 percent for previous givers (45 percent for a presidential-year donation). Over time the lapse rate declines, reaching 15 percent (the current management’s year-two assumption) after five years.
The Libertarian Party needs new members, and enhanced donor giving. Various mechanisms have been suggested for achieving this, from the Internet to direct mail. The ultimate success of these programs is highly sensitive to the lapse rate assumption used.
Depending on the size of the program initiated, a 10 percent error in the lapse rate assumption can be worth several hundred thousand dollars. Given the Libertarian Party’s current precarious financial situation, a miscalculation of that magnitude could be a fatal error.
Mr. Oaksun is a candidate for LNC Treasurer.