Certified Fund Raising Executive (CFRE) Practice Test

In direct mail fundraising, different prospecting approaches are utilized to determine what aspect?

1. Audience engagement levels

2. Cost effectiveness

3. Donor loyalty patterns

4. Potential for major gifts

The correct answer is: Cost effectiveness

In direct mail fundraising, the use of different prospecting approaches is primarily employed to assess cost effectiveness. This means evaluating how much it costs to generate a donation through various methods and comparing the return on investment for each approach. By analyzing the cost effectiveness, organizations can determine which methods yield the best financial results while maximizing the resources allocated to fundraising. Evaluating audience engagement levels, donor loyalty patterns, and potential for major gifts are important considerations in the broader context of fundraising strategy but do not directly relate to the specific aim of prospecting in direct mail campaigns. Prospecting is fundamentally about identifying the most efficient and financially viable approach to reach potential donors and maximize funds raised with the available budget, emphasizing the significance of cost effectiveness in this process.