It’s the time of year when Americans count their blessings and gather together to give thanks. And in the world of nonprofit fundraising, let’s focus on just how incredibly powerful that small gesture of saying “thank you” is.
Perhaps the ultimate cultivation device, a simple “thank you” conveys appreciation for the donor’s thoughtfulness and financial contribution, but also encourages loyalty, further donations, and other ongoing involvement with your organization.
Besides being the right thing to do, systematically thanking donors also improves donor retention and future giving. Just remember that direct mail is not your only option. One study suggests that a thank you call to a new donor can significantly increase that donor’s subsequent giving – a good investment in professional telemarketing, or a productive use of volunteers’ time.
You can also train telemarketers who are calling on a specific appeal, to pivot from a refusal to a sincere thank you, making mention of the donor’s previous contributions. You can turn the point of refusal into a positive conversation just by thanking the donor and recognizing his or her past support. That positive contact is what’s important.
Similarly, you can make any non-donation auto-responders you use online more meaningful. Whether thanking the supporter for joining your email list, submitting an idea/opinion, or taking another action, a heartfelt thank you in these cases is yet another opportunity to provide a positive touch point with your organization.
Some reminders on how to thank your donors:
Anyone who’s worked for a nonprofit knows how valuable Board members are – they play a key role in any organization’s mission fulfillment. And anyone who’s served on a nonprofit Board knows that there are unique dynamics between the Board and the organization’s staff. Staff members are always trying to balance giving the Board members enough information so that they can make educated decisions, but not wanting to bog them down with the nitty-gritty of day-to-day fundraising.
Direct marketing is complicated, and challenges can arise when we try to simplify it, or use our own opinions to drive strategy. The following are some helpful direct response fundraising pointers for Board members to keep in mind when making decisions:
1. Our donors are not unique to our organization. They likely give to a number of nonprofits and trying to be overly controlling of what fundraising communications they receive (and how much) can cause more harm than good.
2. It is very difficult to recruit young donors and change your organization’s demographics. Unfortunately, direct marketing donors tend to be a self-selecting group. They are often older, and not very diverse. But research shows that those younger populations will eventually evolve into donors!
3. We know it’s cheap and easy and quick and everyone’s online – but here’s the deal: online fundraising is not taking over direct mail any time soon. It is still a small part of overall giving, and while online is growing, we cannot give up on direct mail. A solid mix of fundraising channels (mail/phone/online) is most effective to achieve a long-term, steady revenue stream.
4. We can’t make changes or decisions affecting the marketing program based on what we like. There is a science behind direct marketing and it is based on years of data. This data has been tested and quantified and is never based on one data point, or a handful of them. So we need to apply the science and give it time to work.
5. It is important to understand the consequences of our fundraising goal decisions, before we make them. For example, if we want to increase membership by 200%, this will likely come at the expense of the type of member acquired and our net revenue. If we want high net revenue, it will likely come at the expense of our member counts. Each goal should be fully understood before the directive is made.
6. Direct mail is a solid and predictable investment, yet it is not limitless. We cannot pour massive sums into a program and continue to see increased return year over year. It doesn’t expand infinitely, because universes are limited. There is a balance for each organization and careful planning and analysis is needed to determine what the “right” amount is.
Having worked with nonprofits for more than 20 years, including serving on several nonprofit boards, I’d like to make the case for ongoing investments in donor acquisition. All too often, it seems that nonprofits don’t close the deal with their board members, who are unconvinced about the critical need for ongoing investment in donor prospecting. And with the typical net revenue loss on a mature acquisition program, it looks like a no-brainer budget item to cut.
Board members: consider this your wake-up call.
You have a fiscal responsibility to go where the money is – that’s the only way your organization will have the funding it needs to fulfill its mission. And here’s where the money is: in multi-channel, integrated fundraising campaigns that begin with donor acquisition, move to engagement and cultivation, renewals/reinstatement, donor upgrading, and gift acknowledgements.
Simple concepts. But they require detailed, constant attention and funding to work.
Let’s face it. Your donors are old. And for the most part, they respond predominantly through direct mail. Yet when they give through multiple channels they have higher long-term value to your organization. When embraced, traditional direct marketing channels can be reliable and predictable, providing steady revenue for an organization.
Let’s get to some basic facts because there is no silver bullet — no way to magically bring in new donors — without an ongoing, consistent monetary investment.
Do you think “inexpensive” online appeals are the panacea we’re looking for? Let’s do the math.
The biggest impact on performance is average response rate. The average direct mail acquisition response rate is about 1%, and the average online response rate is roughly 0.03% — not 0.3%, but 0.03%!
So for every 10,000 pieces of mail you send, how many donors and how much revenue will you add to your file? For every 10,000 emails you send, how many donors and how much revenue will you add? And that’s assuming we have equal-sized prospect pools, which we don’t. Email prospect files are a fraction of the size of direct mail prospect files.
As I wrote last September, if your year-end fundraising planning isn’t on the front burner yet, move it there now! Don’t forget that donors are paying attention and looking for last-minute giving opportunities at the end of the year.
Please check out last year’s ideas to implement best practices for your year-end campaign, and then read on for a few more ideas for this year. Some of these are probably strategies you’re already using, but here’s what’s working for us:
Test timing. Have you been using the same schedule for the past few years without evaluating what timing works best? Revisit your schedule to see if earlier/later mail and send dates might improve results.
December 31. Are you maximizing the last day of the year? This is — by far — the most productive date, so be sure to send an online appeal on December 31, and at a time that gives it the best chance to be seen. And consider sending twice – many organizations have had success with this approach, with the goal of staying at the top of the donor’s in-box.
Giving Tuesday. Give it a try: create a test campaign strategy around this date – December 3 this year — to kick off your year-end online giving.
Monthly sustainers can be a nonprofit’s lifeblood – providing steady, reliable income, a strong return on the initial investment, and members who stay with the organization year after year. It’s tempting to acquire sustainers and let the money roll in month after month. But sustainer programs need attention and cultivation to make sure the gifts keep coming, and are periodically upgraded if possible.
Here’s a quick reminder of ten ways to properly steward a sustainer program.
At Avalon, we’ve often found that the most effective ways to encourage donors to upgrade their giving are often also the simplest. Here are ten that, time and again, work for our clients.
1. Ask. I know, I know. It sounds too obvious to be true, but very few members will volunteer to upgrade their support – so ASK THEM!
2. Personalize your upgrade ask. Base ask strings on the donor’s highest previous gift, and increase from there. Standard ask string = HPC/1.5HPC/2HPC, but don’t be afraid to experiment with others, like HPC/1.25HPC/1/5HPC. Highlight the upgrade ask with a circle or asterisk and note: “A gift of this amount would really help!”
3. Upsell in renewals. Take advantage of the attention donors give to renewals, and list new benefits they can experience at higher giving levels. Don’t suggest a downgrade option – just offer “Other” with a blank line.
4. Use a DM/TM/EM multi-channel campaign. Upgrades may not happen on the first ask, so make it a conversation — invite donors to increase their support through multiple channels.
We’ve all heard of a merge/purge and in general, know what this particular chunk of direct mail jargon means. But do you know how sophisticated the merge/purge process has become?
The USPS is out with a reminder of the new postal regulations that went into effect in January, and they mean business. The Post Office has made it clear that they’re going to be sticklers for detail and won’t accept any variances to full compliance with their rules. So let’s go over the top three most important changes:
Here we go again! The Postal Regulatory Commission is reviewing proposed postage increases, and if approved, the rates will be effective on January 27, 2013. The proposed rates include a one-cent increase for first-class mail and a 2-4% increase in standard and non-profit mail, depending on the level of automation.
The good news is that we’ve outlined below some best practices to help you maximize your postal discounts:
As you’re budgeting, the inclination is always to try to decrease your per-piece direct mail costs. But how? At Avalon, we’ve created an internal committee tasked with shaving direct mail package costs through tried-and-true methods and strategies.