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Four reasons your nonprofit needs a direct mail fundraising program

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A direct mail fundraising program can:

  • Rapidly build a large file of consistent donors
  • Provide a regular stream of revenue for your organization
  • Quickly build brand awareness in the community through robust acquisition
  • Develop a large pipeline of potential planned and major gift donors

Rapidly build a large file of consistent donors

Direct mail fundraising is by far the quickest and most cost-effective way to build a large file of donors who will make ongoing contributions to your nonprofit. 

For certain, there are other ways to acquire donors cost-effectively.  You can use special events, social media, cause-related marketing, networking/individual engagement, etc.  Those will all bring new donors to your organization.  And some of these channels will deliver donors at a lower cost than direct mail. 

But none of these other means have the ability to quickly generate the high volume of new donors that direct mail can at the same costs. 

Because the donors you acquire through the mail are direct mail responsive, you can continue to solicit them through the mail on an ongoing basis and generate additional revenue regularly.

Provide a regular stream of revenue for your organization

Don’t believe me?  Do the math with me.

Let’s assume you have 20,000 donors, and you mail them once a month.  Let’s further assume that you get a 5% overall response rate, and a $32 average gift (neither are overly aggressive).  Here’s what that would look like on an annual basis:

20k x 12 = 240k (pcs mailed) x 6% = 14,400 (resp) x $32 = $460,800. 

That’s nearly a half million dollars a year in revenue, using pretty conservative response rates and average gifts.  It doesn’t take into account any special middle donor upgrade programs, any large gifts that will undoubtedly come from your mail campaigns, or the value of these donors to other areas in your organization (special event attendance, advocacy, volunteering, planned/major giving, corporate sponsorships, etc.).

Quickly build brand awareness in the community through robust acquisition

A robust direct mail acquisition program will help your nonprofit quickly build brand awareness in your market.  Your brand and your key messages will be delivered directly to your target audience, en mass.  It’s one of the most cost-effective ways to get your brand in front of thousands potential donors (and in some cases, even in front of potential clients).

If your acquisition strategy is multi-channel, and includes things like Insert Media, SEO and other vehicles, you’ll garner even stronger brand awareness (and better fundraising results) from your acquisition program.

Develop a large pipeline of potential planned and major gift donors

Target Analytics’ planned giving research has consistently found that donor loyalty (specifically giving over multiple years) is one of the most predictive factors in the likelihood to make a planned gift.

And we know that one of the best ways to increase donor loyalty in the way of consistent gift giving is through a monthly direct mail solicitation program (I’m sure jaws just dropped across the blogosphere . . . but yes, I said monthly solicitation).  The best way to increase frequency of giving is to increase frequency of asking. 

Go figure!

When it comes to major gifts, you’ll find that some of your most valuable major donors have come through your direct mail program.  It shouldn’t be a surprise.  They might first check you out by giving you a $20 gift in response to an acquisition mailing.  But if you prove yourself (i.e., you’re trustworthy, you show them what their gift accomplished, and prove that you’re a good steward of their funds), you might just earn a position as a favored charity.  This could someday lead to a major gift for your organization.

A few years ago I was leading annual giving at a children’s hospital.  Our file was almost 100% direct-mail acquired.  Since we were ramping up for a capital campaign, we needed to identify potential major donors in our existing donor base.  We contracted with a wealth profiling service to review our existing donor base and identify potential major donors.  Out of ~70,000 records, we were able to identify approximately 2,500 people who could make cash gifts of $10,000+.  Many of these people first came to know our organization by responding to a direct mail acquisition campaign. 

If you don’t believe me, just look at your own data.  Watch for donors who increase their giving over time, and you’ll start to see patterns.  Donors who double or triple their giving in a defined period are sending you a signal.  Take the time to research them, get to know them – what motivates them, why they give, why they give to you – and you’ll probably find that they have the potential to make an even larger investment in your organization.

I’ve blogged about this connection between direct mail and major gifts before, and so has my good friend, Roy Jones, over at Roy Jones Reports

Now that you know some of the benefits of a direct mail fundraising program, find out if direct mail fundraising is right for your nonprofit.

Direct Mail Fundraising: Is it right for your nonprofit?

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Is your nonprofit thinking about starting (or significantly expanding) a direct mail program in 2011?

Russ Reid’s Heart of the Donor study (August, 2010) found that a majority of donors still give by mail (61% of donors who made a gift in the last 12 months reported doing so by mail), which makes direct mail a smart place for many nonprofits to invest.

But starting a direct mail program from scratch is a big investment.  It can be a scary thing to take on.

Here’s a series of questions I get all the time.  Maybe you’ve asked them a time or two yourself . . .

I’m not sure if direct mail fundraising is right for us.  It’s expensive.  It’s complicated.  Takes a lot of time and effort to build a successful program.  If we invest in direct mail, how do we know it will work for our organization?

These are good questions, and it’s important that you ask things like this before you jump into something as complicated as a direct mail fundraising program.

If you’re considering starting a direct mail fundraising program, you want to make sure your organization answers these three questions first.

Question #1: Do the masses care about your work?

Direct mail fundraising is a volume game.  In order to acquire large numbers of donors through the mail, you have to mail to a large audience.  That’s why you need a clear understanding of how widely supported your cause is.

Is what you do important to millions of people (or even hundreds of thousands)?  Are you working to cure childhood cancer?  Feeding the hungry?  Saving abused animals?  If so, there’s a good chance you’ll be able to find a large enough pool of potential donors to make direct mail a viable acquisition channel for your organization.

But if what you do has a limited base of potential supporters (maybe you’re a small, locally-focused nonprofit, or what you do only resonates with a small segment of the overall population), you’ll have trouble finding a large enough audience to make an investment in direct mail acquisition pay off.

It’s also important to note that there are some causes that, for one reason or another, just don’t work all that well in the mail.  The issues may be too complex or too controversial to be successful in the mail.  Or maybe there’s another reason that we just haven’t nailed down yet.

Examples of these kinds of causes are:

  • Domestic violence prevention
  • Transitional housing for the working poor
  • Gambling addiction recovery
  • Sexual abuse / violence prevention
  • Hospice care

If you’re not sure where your cause falls on this spectrum, seek out expert counsel.  Fundraising agencies and consultants that specialize in direct response fundraising can pretty quickly assess whether or not your cause and your organization have the mass appeal necessary to be successful in direct mail (especially in donor acquisition).

Question #2: Does your name clearly and simply explain what you do?

Ask any direct mail fundraiser and they’ll tell you one of the greatest challenges in direct mail acquisition is getting the envelope opened. 

That’s why your name is so important.  If the person holding your envelope isn’t already a supporter, one of the critical aspects to getting that package opened is whether or not they can easily understand who you are and what you do. 

If your name clearly and simply conveys what your organization does, you have a much better chance of getting that envelope opened. 

So what are some easily recognizable / understandable names?

Notice that only a few of these are major national organizations.  Those envelopes will get opened simply because of the national brand recognition that ARC and Salvation Army have. 

The other three organizations aren’t as well known, but just looking at their name you can easily understand what they do, and the value they provide to the community.  Rescue missions, food banks, humane societies – the majority of people in any market in the U.S. or Canada will know what these types of organizations do simply by reading their names.

If your organization’s name is that clear and simple to understand, you stand a good chance at successfully getting your envelopes opened.

But what if that’s not the case?  Here are some examples of organizations that aren’t as easily recognizable or understandable. 

The challenge with these organizations isn’t that they don’t do good work.  In fact, I’m sure these organizations are all doing vital work in their communities.  Unfortunately, their names aren’t descriptive of that work, which will make it much easier for a non-donor to bypass their direct mail appeal for one that is more recognizable. 

Question #3: Are you solving an urgent problem?

In direct mail (or any direct response channel) fundraising, you must quickly compel someone to make a buying decision (a gift to your nonprofit).  It’s not unlike commercial direct mail marketing, in that respect. 

Unlike major gifts or planned giving, you aren’t afforded multiple personal visits and significant time to convince a prospect. 

You have maybe 15 seconds to influence a decision in your favor.  And if, in those 15 seconds, you can’t convince me that I need to give right now, you probably won’t get my gift. 

If what your organization does doesn’t solve an urgent problem, direct mail probably isn’t right for you.  Direct mail fundraising needs urgency in order to be effective.

Could a child die if I don’t send a gift today?  Will my neighbor’s family go to bed hungry tonight if you don’t get my check?  Can my $200 today provide clean water for a child in Africa tomorrow (these are all online examples, but the urgency translates to their mail programs as well)?

Those are compelling, urgent issues that need to be solved immediately.  And I can understand that my inaction (not sending a gift) will have dire consequences for the people served by these organizations.

To be clear, these organizations do many other things in addition to those highlighted above.  But they don’t focus on them in their fundraising efforts.  Why not?  That’s simple – the more urgent offers work better.

If your organization provides multiple services, there’s nothing wrong with using your most compelling service as the primary offer for your fundraising.  In fact, if you don’t, chances are your direct mail fundraising program won’t work as well (or at all).

So what if you don’t provide an urgent service like those I’ve outlined above?  Well, mail just might not be right for you then.  All programs and offers are not created equal.  Some just aren’t right for direct response fundraising.  While it might be frustrating to hear that, it’s better that you hear it now and that it becomes part of your decision-making process early, rather than finding it out only after you sink hundreds of thousands of dollars into a program that doesn’t work.

Bonus Question: How’s your web presence?

Recent studies confirm that your website is critical to your fundraising success (offline and online).  In fact, Russ Reid’s Heart of the Donor study found that more than 60% of donors who gave a gift in the last year went to the nonprofit’s website prior to making a decision to contribute.

Similarly, a recent study by research firm Campbell Rinker found that as much as 30% of an organization’s revenue from a given direct mail campaign may come via online responses.  This is especially true if you have a younger than average donor base.

Before you jump into a direct mail program you might want to make sure your website is up to the challenge.

Now what?

If your nonprofit can answer all of these questions in the affirmative, and you don’t yet have a direct mail fundraising program, then I’ve got to ask . . . what’s holding you back?  It’s clearly an opportunity to generate significant additional funding in the coming years.  Go for it!

9 Tips to Maximize Year-end Giving

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2010 is quickly coming to a close.  It’s been a tough year, no doubt.  But this is no time to put the brakes on your fundraising efforts, despite what some “experts” are saying about the continued bad economy. 

In fact, the last few weeks of the year are huge for most nonprofits – so make sure you’re poised to reap the benefits in the coming weeks.

Here are some tips to help maximize your year-end success:

1. If you can, reach out (in-person or via phone would be best, but mail/e-mail can work too) to every middle and major donor that hasn’t yet given in 2010.  Make sure they know just how critical their support is to the lives your organization touches.  And how much you depend on their continued partnership. 

2.  Adjust your marketing calendar to squeeze in an extra year-end mail appeal or telephone solicitation.  Even if you only contact your most committed donors, the extra income from one added solicitation (especially in December), can have a huge positive impact on your bottom line.

3.  If you have a monthly giving program, year-end is a great time to ask these highly committed donors to make an extra “stretch” gift. 

4.  Don’t overlook planned gift donors at year-end.  They’ve planned for your future in their will, but many will also help you meet current needs at the end of the year if you have a compelling reason to give.

5.  Don’t go dark in the week after Christmas.  There’s a tendency to send staff home for vacation that week.  And rightly so!  They’ve worked hard.  It’s been a tough year.  Everyone deserves a break.  But I’d caution you to have at least a few staff members in the office throughout that week to help with gift processing (you should see a spike in gift volume), making thank you calls, and especially to reach out to donors that haven’t yet made a gift in 2010.  This is also one of the busiest weeks for organizations that receive year-end gifts of stocks and other securities.  You’ll want someone in the office who can handle these kinds of inquiries from donors, and who can work with your bank or broker to accept these gifts before year-end.

6.  Invest in Search Engine Marketing (SEM).  In recent years, testing indicates that the final three weeks of the year see dramatic increases in people conducting web searches for terms like “year-end giving.”  Donors and prospects alike are on the web during the final weeks of the year, and are actively searching for causes to support.  SEM will help ensure you’re front and center on the web when people in your community are looking to give.  Even a modest investment in Search Engine Marketing of $500 – $1,000 can yield returns as high as 3:1 – 5:1.

7.  Use a three-part e-mail series to build awareness, excitement and fundraising momentum at year-end.  Tie your campaign to specific year-end and holiday needs to ensure success.  Time your campaign so that each e-mail is at least a few days apart, and e-mail #3 is in mailboxes on December 31, to highlight the final giving opportunity of 2010 (for tax purposes). 

8.  Make sure to ask your volunteers for a year-end gift.  We had one client who recently did this and generated a 16.5% response to this request.

9.  Remember that you still have time to seek out a matching gift from major donors and corporate sponsors.  Nothing will improve your year-end results like offering donors the opportunity to have their gifts matched by others.

I hope you find some of these tips helpful as we come to the end of the year.  Don’t hesitate to give me a call or shoot me an e-mail if I can be of assistance to you in any way.

Want more tips to improve your year-end fundraising?  Go visit Roy Jones Reports for five more great recommendations.

Wishing you much success this holiday season!
Andrew

Quick Poll: Where will your nonprofit invest in 2011?

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It’s hard to believe, but 2011 is right around the corner.  Right about now, most nonprofit executives and boards are making plans for the coming year, and looking at budgets for the coming year. 

Since it’s budget time, I thought it might be interesting to see where nonprofit organizations are planning to spend their resources in 2011.  There’s a quick poll below.  If you work in a nonprofit, I’d appreciate it if you take a minute to cast your vote.  If you don’t see the area where you’re planning to invest, just add it in the “Other” section.

So you want to be a Nonprofit Rockstar, huh?

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You’re early in your career, passionate about the cause you’re working to advance, but sure wish you could climb the career ladder more quickly.  Right?

Maybe you want to go from being a Program Assistant to a Program Director.  You’d like to make the leap from Special Event Coordinator to Development Director.  Or maybe, just maybe, your goal is to lead a nonprofit from the Executive Director’s office.

But how do you get there from here?  What steps should you take?  What should you be doing right now today to prepare you for those challenges?  And how can the way you approach your career lead you to a brighter future?

You’ll find those answers, and so much more in Rosetta Thurman and Trista Harris’ new book, How to Become a Nonprofit Rockstar: 50 Ways to Accelerate Your Career.

Rosetta and Trista have packed this new book full of smart, easy to digest, actionable recommendations to help advance your career.

You owe it to your future self to pick up a copy of this new book!

Without spoiling too much, here are two key tips they share in the book:

Establish a Great Personal Brand.

Simply, Rosetta and Trista say that your personal brand is, “what other people say about you when you’re not in the room.” 

And they’re right.

Guard your personal brand closely.  It’s the greatest asset you’ll ever have.  It doesn’t matter how smart you are, how many letters you have behind your name, or where you went to school.  If I’m a hiring manager, and I find out you don’t follow through on your commitments, or I can Google you and find links to the wild keg party pics you posted on Facebook, chances are you’ll never get an interview.

Learn How to Raise Money

There’s a natural inclination to shy away from asking for money.  You, like the rest of us, probably don’t like to hear “NO” all the time.  Maybe you’re afraid that someone will chase you out of their house with a broom stick when you call on them (hint: I’ve actually heard a development officer say this).  Or maybe you’re afraid that if you ask a friend or colleague for a contribution for your organization, you’ll damage your relationship. 

Rosetta and Trista point out (so appropriately), that if you can get comfortable – and good – at asking for money, you’ll always have a place in the nonprofit sector.  In fact, if you’re any good at asking for (and getting) contributions, you’ll most certainly get a seat at the table for important discussions and decisions at your nonprofit.  And the more you show your boss that you can raise support for the organization, the more valuable you become.

There are dozens more tips in this book – I’ll share more thoughts in the next week or two.

But until then, get your copy today!

Mobile Giving, the Red Cross, and your nonprofit

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Interesting update on Mobile Giving from Philanthropy Journal today.

Nonprofits find texting tough way to raise money

While the Red Cross raised over $30 million by mobile phones after the Haiti earthquake, triggering a rush by nonprofits to try to raise money through text-messaging, reproducing those results has been tough for most groups, often because the costs of supporting a mobile-donating program can outstrip the returns, The New York Times reported Oct. 31 (see charity texting story).

The bottom line is, the Red Cross is successful here for several reasons. 

1. When a crisis like Haiti happens, it owns the airwaves for a long period of time.  When the Haiti quake hit, it was around-the-clock news on every network and cable news station.  There were evening news specials, mid-day reports, etc.  There were celebrity telethons to support Haiti.  Radio updates throughout every day.  This story was top news on the web.  And everywhere a Red Cross story got exposure, they mentioned the mobile giving option and their short code.

The Red Cross didn’t have to pay a dollar for this media exposure.

2. The Red Cross has a disaster response plan that includes outreach/philanthropy.  They were able to capitalize on this within hours to ensure they had the funding necessary to handle this and future disaster challenges.  They didn’t try to throw a campaign together after the disaster happened – they simply implemented the plan that was already established.

3. They had a truly integrated campaign – not just a mobile initiative.  Yes, the Red Cross raised a TON of money via mobile after Haiti.  But they probably also raised significant dollars via direct mail, online, and maybe even DRTV.  The Red Cross knows they can’t just use mobile fundraising, so they made sure they had an integrated campaign.  And it worked well.

So here’s the dirty little secret.  A lot of nonprofits are looking at mobile as a way to cut costs and still raise money.  But it’s not going to work unless an organization has a MASSIVE audience (like the Red Cross did after Haiti).  You need a captive audience, or a major world-impacting issue in order to leverage mobile in any significant way.  If your organization doesn’t have that, mobile probably won’t work for you.

The downsides of mobile should make you think twice before you jump on the bandwagon.  You don’t get donor contact info (makes it very difficult to build long-term relationships).  Largest gifts you can generate are $10 gifts.  It could take months for you to actually get the contributions. 

I hate to be so negative, because in the long-term, I think mobile has a lot of potential.  But that’s what it is right now, just potential.

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