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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!

Six Types of Wealthy Donors

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Here’s another take on major donor personality types and motivations.  This article was pulled from AFP.  There are some similarities and distinct differences between this research and the research data I posted about recently in Understanding Major Donors

(Jan. 12, 2010) A new study identifies six types of high net worth donors and explains what motivates them to give.

The findings of the study, conducted by Barclays Wealth in London, explain how factors such as age, source of wealth, religious or political beliefs are influencing the ways in which high net worth individuals give to charity.

Based on findings from 500 high net worth investors in the U.K. and U.S., the study identifies the following diverse typologies:

Privileged Youth (motivated by a desire to engage)

Typically younger, and having inherited some or all of their wealth, the Privileged Youth tend to enjoy a comfortable lifestyle yet feel an element of guilt regarding their wealth.

For the Privileged Youth, giving their time and energy to charity is a means of offsetting some of this guilt, and it provides them with a mechanism to give back to those less fortunate than themselves. Furthermore, they have been brought up to believe in the importance of charitable work, and similarly wish to set an example to their own children.

As a group they are well-travelled, heavy internet users, and see themselves as citizens of the world. As a result, they tend to support global causes, especially social welfare causes such as homelessness.

Eco Givers (motivated to save the planet)

This group is typically younger and, of all six groups, the most likely to be female. They live very comfortably but do not believe that children should inherit large amounts of money. They themselves have worked hard for their wealth.

The Eco Givers primarily donate to environmental charities and to disaster relief, being fundamentally concerned that climate change is now reaching the point of no return, and believing that funding causes that alleviate environmental disasters and help slow or reverse the effects of climate change are the most important way for them to help. They also support children’s and social welfare charities.

Altruistic Entrepreneurs (motivated by duty to give back)

Altruistic Entrepreneurs are typically middle-aged business owners, with teenage children, who have already experienced several liquidity events. They are entirely self-made and still have strong ties to their roots.

This group strongly believes that the wealthy have a duty to give and to share their wealth, and in particular they support causes that give back to the communities where they grew up. Religious beliefs also play a part in their desire to be philanthropic.

Altruistic Entrepreneurs are very generous, and make few demands on the charities they give to; furthermore, they are the least likely group to cut back on their donations during difficult periods in the economy. They are not a group that needs any public recognition for their donations, and indeed are happy to leave their wealth to be donated and spent after their death.

This group tends to donate across the major causes – spanning education, social welfare, and environment – and aside from their (often quite substantial) financial donations, they are happy to be very active fundraisers.

Reactive Donors (motivated by peer pressure)

Predominantly male, high-earning executives, Reactive Donors tend to give to charity because it is expected amongst their peers, rather than through a moral or social conviction.

This group give very little of their time to charities, and when they do give money it will tend to be in straightforward, low-engagement ways such as monthly direct debit payments from their salary. They believe that corporations and businesses should take a larger share of the responsibility to support causes than individuals.

Though not big donors, when they do give, they are most likely to support health and medical charities, potentially as their own ‘insurance’ policy in case they become ill. They are also more likely than other groups to want public recognition for their donations.

Cultured Inheritors (motivated by legacy)

Cultured Inheritors are in their late 50s and 60s, often in semi-retirement, and with young grandchildren. Though they tend to be financially successful in their own right, they have typically also inherited wealth and plan to bequeath much of their wealth to their children and grandchildren.

Religious beliefs are not at the heart of this group’s philanthropy, but rather social and moral beliefs. Cultured Inheritors are strongly motivated to give to immediate family and community causes; they are also one of the few groups who retain a strong interest in supporting the arts.

They are generous with their time, both in organizing fundraising events, as well as serving on the boards of particular charities where they can bring their experience and networks to bear.

Professional Philanthropists (religious and political motivations)

As one of the oldest groups, Professional Philanthropists are high-earning executives and business owners who have reached the pinnacle of their careers or recently sold their business interests. Collectively, they are almost exclusively self-made millionaires, who have been extremely successful professionally.

Professional Philanthropists are large donors and will look to support causes both through sizeable one-off donations, as well as by providing their business and commercial experience to their preferred charities. Given their professional background and large contributions, they are more demanding of charities, wanting to see the impact of their donations. They want to know exactly how their money will be spent and encourage charities to be open in terms of the success that their work is achieving.

They tend to donate to education (most often universities) where they hope to give others the opportunities that they never had, as well as to religious causes, supporting their local churches and the broader fundraising activities of their faith. This group is less likely to support global or environmental causes.

About the Report

The white paper Philanthropology: The Evolution of Giving was authored by Ledbury Research on behalf of Barclays Wealth, to understand in more detail the different philanthropic motivations and personalities behind the complex wealthy populations in the U.S. and U.K. Click here for more information.

CALL FOR FEEDBACK: What do you think, is this type of information helpful to you as a fundraiser in better connecting with donors? Does it change the way you fundraise when you find out the motivations of groups of donors? Let us know by emailing your thoughts to ewire@afpnet.org. Please use the subject line “Donor Types”.

Three Reasons Your CEO Must Be Your Chief Fundraiser

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 How involved is your CEO in your organization’s philanthropic efforts? 

That’s a question I like to ask every organization that I consult with.  It’s an important one, and typically sets the tone for the organization’s overall fundraising approach.  In many organizations, the CEO is intimately involved in the philanthropic process.  But from time to time, I’ve seen organizations where the CEO wants nothing to do with fundraising.

That’s a problem.  In order for your organization to reach its fundraising potential, your CEO must be your chief fundraiser. 

Here are three key reasons your CEO needs to lead your philanthropic process:

1. She’s the face of your organization.  In addition to being Chief Executive, she’s Chief Communicator.  Chief Facilitator.  Chief Promoter.  Chief Connector.  Community leaders, local media, and anyone with an interest in your cause will look to her to set the tone for your organization.  Because of the role she plays, she’ll have access to the highest level leadership in your community, which is critical for spreading your message and building the relationships that can lead to significant support.

2. She sets the example for your entire organization.  Staff at all levels will mimic her behavior.  If she’s apathetic toward philanthropy (or worse), your people will fall in line with similar behavior.  If, however, your CEO makes philanthropy a priority, so will members of your staff.  If you want everyone, from your administrative assistant to your program manager to embrace philanthropy, then your CEO must model an appreciation for it. 

3. Donors expect it.  This is especially true with entrepreneurially minded individual major donors and corporate funders.  It’s even becoming more common for mid-level donors to want access to your CEO as well – or at least to know that the CEO is heavily involved in the fundraising process.

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