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Six new challenges in direct mail fundraising
Mal Warwick

May, 2006

YOU KNOW our world is changing at a rapid rate. All you have to do is catch the morning's headlines or the evening news. But, in this unutterably complex, interdependent world we live in, it can be maddening to identify those trends that bear most directly on our work. Here's my take on the six current trends I perceive that have the greatest potential — for ill or good — to shape our future in direct mail fundraising.

1. Coping with the competition

The competitive problems that confront us are far greater than simply a steadily mounting number of nonprofits competing for gifts in the mail. The biggest problems stem from the nature of the nonprofit sector - and from our practice of direct mail fundraising on its behalf. Here are some aspects of the challenge:

Too many nonprofits have sound-alike missions, causing confusion among the public and distrust among donors. In part, this is the nature of the beast, because (in my opinion) there truly are too many nonprofits pursuing similar missions. In part, too, this is our fault, because we fail to craft our messages around the unique elements in our organizations' work.

Far too often, our direct mail fundraising packages look and feel alike — not just on the outside, but on the inside, too. Again, this reflects our frequent failure to recognize and highlight what's truly unique about our organizations.

We often employ copycat premiums and involvement devices. Why, for example, do so many mailers use address stickers in 2003, decades after the technique ceased to be fresh?

We ask for pretty much the same amounts of money of the same people, again and again and again. Why do nine out of 10 donor-acquisition letters ask for "a gift of $25, $50, $100, $250, or more" (or some close variant of that gift string)? Surely, every once in a while, some of us could suggest gift amounts that truly match the unique needs we're writing about!

And why does everyone always use a teaser!!?? My agency's repeated testing calls into question the effectiveness of this tired old device. Sure, teasers work sometimes. But, more often than not in head-to-head tests, they're shown to be of no use at all.

2. Dealing with donor demands

Everyone knows it: Today's donors want more. But few mailers are keeping pace by giving them what they want.

In the United States today, the privacy movement is gaining momentum. We've already learned, of course, that donors must be given the option to remove themselves from list exchange and list rental arrangements. (You are doing that, aren't you?)

But donors are also demanding choices. We've always viewed direct mail as a source of unrestricted gifts — but many donors, particularly at higher levels, seek opportunities to designate the use to which their gifts will be put. One of these days we may find that we're leaving a great deal of money on the table because of our failure to offer such choices.

It's well known, too, that donors are demanding more complete financial information, particularly about how their gifts are used. Typically, they also want to know what results their gifts have produced. But, apart from annual reports (which frequently go only to high-level donors) and an occasional pie chart, showing what proportions of the budget go to which programs, are we really giving our donors this sort of information? The answer is usually no.

3. Adjusting to the Internet era

In a world where's "One-Click" ordering has become the standard by which the speed of customer service is measured, it's foolish indeed to think that nonprofits can get away much longer with thank-yous that are mailed six weeks after gifts are received, or with letters or emails that go unanswered. Today's donors expect more — and they want it now.

These heightened expectations may not be characteristic of most donors in their 60s, 70s, and 80s. But the attitudes of Baby Boomers (those now between the ages of 39 and 57) were forged in a dramatically different environment — and, with luck and skill, we'll persuade them to take their places among our donors in growing numbers as the years go by. But we can't take them for granted!

Compounding this challenge is the proliferation of communications channels. Some of us live by e-mail alone. Others won't touch the stuff. Some respond only to mail, others only to phone calls. As time goes on, we'll have to pay increasingly greater attention to the individual communication preferences of our donors.

4. Paving the way for legacy gifts

What qualifies as a "major gift" in your organization? $100? $500? $1,000? $10,000? No matter - whatever the amount, it's a lot less than the average bequest in the U.S., which is $35,000. No wonder they call bequests "the ultimate gift!"

Not every nonprofit can hope to secure bequests. Perhaps there's some special reason why your organization is not a candidate: It's too new, too small, too shaky financially, or too focused on short-term goals. But if those exceptions don't apply, you owe it to yourself and your colleagues to take a careful look at legacy giving.

The most effective legacy programs begin with market research, which is just a fancy term for asking your donors what they think about the idea and what might motivate them to act on it. If it's based on a solid understanding of donor attitudes, direct mail can be an effective way to promote legacy giving.

But here's a word to the wise. If you launch a program to market legacies, don't call it "planned giving," and don't muck it up with legalistic information about charitable trusts. Promote bequests, which account for more than four out of every five "planned gifts."

5. Dealing with donor attrition

It's not enough that typical acquisition rates continue to plummet, or that it's becoming harder and harder to persuade one-time donors to give a second gift. Now we have to deal with shrinking donorbases.

There's only one answer to this challenge: superlative donor care. For many years now, fundraisers have engaged in loose talk about how our job is to build relationships with donors. But how many of us are actually doing that? Are you?

The only antidote to donor alienation and detachment is to build genuinely strong relationships with donors — by thanking them promptly and warmly for every gift . . . by giving them options to receive communications from you on their schedule, not yours . . . by keeping them fully informed about how you used their gifts . . . and by doing something other than asking them for money every single time you get in touch!

Here's the key: Ask not what your donors can do for you. Ask what you can do for your donors.

6. Gaining full value from your investment

There's a lot we can learn from Madison Avenue, and much of it is related to branding.

"Branding" may be a buzzword now, but decades of commercial experience and a number of nonprofit success stories illustrate its profound importance in laying the foundation for successful sales — or fundraising.

At a minimum, a nonprofit branding program is built on a clear understanding of donors' motivation and a well-conceived and well-managed multi-channel fundraising program. Branding requires us to take the long view and never to lose sight of the fundamentals: Acquisition Cost and Long-Term Value, the two most important numbers in fundraising.

This article was reprinted with permission from Mal Warwick. Consultant, author, and public speaker Mal Warwick has been involved in the not-for-profit sector for more than 40 years. He has written or edited seventeen books of interest to nonprofit managers. He has taught fundraising on six continents to nonprofit executives from more than 100 countries.

Copyright (c) 2001 by Mal Warwick. All rights reserved.


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