December 2008

  1. Fundraising in Tough Times
    by Mal Warwick
  2. Would you buy a mattress from this charity?
    by Tom Ahern
  3. Fundraising Innovation in India
    by Richard Pordes
  4. It’s tough out there
  5. Destination Marketing
    by Tom Gaffny
  6. Ask Mal
  7. Using video in online appeals
    by Michael Stein
  8. Evaluating e-mail
  9. Writing an annual renewal series
    by Deborah Block and Paul Karps
  10. Ho ho ho

Where's Mal

January 29-30, 2009 — Washington, DC
DMA Nonprofit Federation 2009 Washington Nonprofit Conference
Site: Renaissance Hotel

February 25-28, 2009 — Hanoi, Vietnam
Resource Alliance Vietnam National Workshop

April 23-26, 2009 — Itasca, IL
Social Venture Network Spring Gathering
Site: Eaglewood Resort

May 5-7, 2009 — Online
IFC Online eConference

July 21-23, 2009 — Washington, DC
2009 Bridge Conference
Site: Gaylord Hotel, Resort and Conference Center, National Harbor



Please join Mal and hundreds of other fundraisers specializing in direct response at the 2009 Annual Washington Nonprofit Conference organized by the Direct Marketing Association Nonprofit Federation. It's one of the year's best opportunities to gain insight into current trends and network with your peers.


1. Fundraising in Tough Times

By Mal Warwick, Editor

Practically everybody in the nonprofit sector is talking about the impact of the fast-spreading worldwide recession on fundraising. There has been a flood of articles, workshops, lectures, blogs, and other commentaries on the topic in recent months. Most of it, in my humble opinion, is little more than opinion-mongering.

To weigh in with a logical analysis and some practical suggestions, my colleague Dan Doyle, CEO of Mal Warwick Associates, and I have written a new paper called “Fundraising in Tough Times” This analysis takes an unorthodox approach to the topic and includes some advice that many people in the direct marketing field will probably think is heretical. For those who want to dig deeper into this subject, Dan and I have also prepared a reading list.

Finally, I've just reached agreement with John Wiley and Sons to write a much-expanded version of this paper for publication as a book early in 2009. Stay tuned!


2. Would you buy a mattress from this charity?

By Tom Ahern

Nonprofits love to write about what they do. Isn't that missing the point?

In advertising, the saying goes, “Features tell. Benefits sell.”

Consider the mattress. (Patience. We'll get to fundraising in a minute.)

Its features might include (1) flexible springs that mold to your shape as you turn, (2) a fabric covering that's treated against stains, and (3) an extra layer that manufacturers call “pillow-top” padding.

But you're not really buying features when you shop for a mattress. You're buying the benefits conveyed by those features.

You're buying springs that promise you the most restful sleep you've ever had . . . and an end to backaches. You're buying fabric that's a breeze to clean and keep looking fresh. And the pillow-top padding? You're buying for your very own bedroom the kind of luxurious comfort once reserved for palaces.

In fundraising, a comparable saying goes something like this: “Activities tell. Accomplishments sell.”

Activity? “We staff Family Centers inside public elementary schools.”

Accomplishment? “At our Family Centers, parents learn how to give their children the best possible start in education. When kids succeed early in public school, they're much more likely to continue succeeding, right through high school graduation.”

Activities are what you do. Accomplishments are why you matter—i.e., the results you get through your activities.

Activity? “We have a 24-hour hotline.”

Accomplishment? “Domestic violence doesn't happen on a 9-to-5 schedule. When the bars close at 2 a.m. and the abusers head home, our trained team's ready to rescue.”

Donors aren't buying your activities. They're buying your accomplishments: kids succeeding in school, battered women saved from their tormentors.

Donors want—crave—a share of those accomplishments.

I've analyzed thousands of fundraising communications, from hundreds of charities of all types and sizes. And I see a common failing: Nonprofits talk way too much about their activities, and way too little about their accomplishments.

Sorry: wrong audience. Only insiders care deeply about what you do: the details, the nuts and bolts, the daily grind, or the underlying theory. Outsiders (i.e., prospects and donors) care mostly about your results.

Activities tell. Accomplishments sell.

Reprinted with permission from the Ahern E-Newsletter: About Donor Communications. Copyright © 2008 by Tom Ahern.


3. Fundraising Innovation in India

By Richard Pordes

In a country of one billion people, India’s 200 million middle-class citizens may be the world’s fastest- growing new pool of potential donors. Faster even than China. But don’t be fooled. India isn’t a “virgin” market any more that will respond to any kind of simple appeal. While that might have been the case a few years ago, today any gains you make will have to be carefully planned and vigorously implemented.

Indian fundraisers, whether domestic or imported, are developing their own unique methods and adapting traditional Western methods to benefit local nonprofits that used to rely mostly on funding from industrialized countries.

Direct dialogue

Take, for example, the traditional Western technique of face-to-face fundraising, pioneered in the West by Greenpeace, and sometimes known as “direct dialogue.” Indian fundraisers do it too. But they add their own unique twist.

As everyone knows, India has excellent telemarketing companies that conduct inbound and outbound calls to generate sales or to service customer calls at extremely low cost. Some of these firms that started out selling credit card memberships and insurance have now branched out and started fundraising for Western and Indian NGOs eager to reach middle- and upper-class consumers.

What could be more natural, then, than using the many available telephone and address lists to reach potential donors? Taking care not to give the impression of overly aggressive fundraising, they engage people in easy-going telephone banter about the charity they’re representing. A pitch for funds is never made, because the purpose of this first stage is solely to generate leads. Recipients of calls are asked if they would agree to meet someone from the charity to describe the work of the organization.

If the answer is positive, his or her name and number are sent to a small group of trained face-to-face fundraisers, in the same or even in another city. These solicitors then call the prospective donors and set up appointments to meet at work, at home, or possibly at a tea shop. At the meeting, the fundraiser goes into action, using charm and reason to persuade the prospect to agree to a first gift.

Skilled solicitors are able to persuade about 50-75% of the individuals they meet to make at least a one-off gift, and possibly even join a monthly giving plan or child-sponsorship program. 

Pre-qualified direct mail

Another adaptation of a standard Western direct mail technique is using telephone pre-qualification of names and addresses, before sending out an appeal letter. Using this procedure helps eliminate people who are unlikely to become donors, thus saving wasted paper, printing, and postage. While the high cost of doing this might make it prohibitive in the West, the low cost of skilled labor in India makes it very cost-effective.

My colleague, Kunal Verma, who then headed fundraising at Madurai’s Meenakshi Mission Hospital in South India, offers this case study based on his own experience:

“When conducting direct mail appeals for our hospital, we aim to optimize our investment right from the start. To be honest, we started pre-qualifying acquisition mailing lists more because of challenges we faced than a new creative approach. The lists we were buying were not giving us great results, partly because we could only afford to purchase low-quality lists. We simply needed to keep our fundraising costs to a bare minimum.”

“We had three issues with the lists we were using. First, many of the addresses we rented were inaccurate because people had moved or passed away; second, many of the phone numbers attached to the names were incorrect (due mostly to poor data entry by list vendors); and third, people’s phone numbers had not been recently updated. (In India, people frequently change phone companies.) On analyzing our campaign results, we found that 28% of our DM packs were being returned owing to wrong addresses and 13% of the phone numbers we called were wrong.”

“So, on average, 40% of our rented names were unusable. This was a huge drawback, in terms of wasted paper, printing, postage, cleaning the database, and human frustration.”

“We therefore adopted two important ground rules. First, we decided never to rent any lists that have no phone numbers. Second, before mailing out any packages, our tele-calling team calls all the addressees, to ensure they really want to receive our appeals. We also ask them whether they prefer to support our cancer patients or our free meals for poor patients. We then send the appropriate appeal to each pre-qualified donor. This process not only eliminates wrong addresses or changed phone numbers, but also tells us what they’re most likely to support.”

“The tele-callers don’t make an Ask, but promise to call back after seven days (when people have received their DM pack) to answer any questions. If someone sounds very enthusiastic and motivated to give, the DM pack is sent out immediately by messenger (with a handwritten addressed envelope) so that the donor can make an immediate contribution. Otherwise it’s sent by regular mail.”

“Pre-qualifying the lists not only saves us a lot of money, but also boosts the morale of our tele-calling and direct mail teams,” says Verma.”

Since these prospects have been informed in advance about Meenakshi Hospital’s appeal, they’re well prepared for the Ask and respond at a rate of 24%. With repeated calls to the same names, Meenakshi Hospital’s fundraisers are able to persuade up to 52% of mail recipients to make at least one donation. This is, of course, a big improvement over the previously existing situation, where they were failing to connect with 40% of the rented names.

As a result of pre-qualifying lists, Meenakshi Hospital now has a clean and updated house list. The tele-calling and DM teams are happy. People in the community don’t receive unsolicited mail. And the hospital fundraising team has learned how to turn a low-quality list into a database that converts over one out of two prospects into donors

Richard Pordes retired from UNICEF in 2006 and now consults internationally. He can be reached at 99 Dolphin Cove Quay, Stamford CT 06902, phone (203) 316-9190, e-mail richardmpd@aol.com


4. It’s tough out there

Even the nation's largest charities say they're “increasingly hard pressed to keep up with the skyrocketing increases in the cost of providing services.” So says The Chronicle of Philanthropy in reporting on the publication's newest edition of The Philanthropy 400. This prestigious annual list ranks the nation's top not-for-profits based on income. In case you're wondering, here are the latest top five, in descending order of size:


5. Destination marketing

By Tom Gaffny

In my year-long study of the online practices of 144 nonprofit organizations, I learned about 12 ways that charities are using the online medium to bring donors closer to the cause . . . again and again. They’re thus making their organizations more relevant, more provocative, more stimulating, and more engaging.

Here, once again, are those 12 techniques:

  1. Be relevant—be local

  2. Highlight the video

  3. Engage constituents

  4. Leverage techniques that work in the mail

  5. Send information in bite-size chunks

  6. Work at channel integration

  7. Personalize your organization

  8. Be visual—be provocative

  9. Say “thank you” in different ways

  10. Ask friends to “get the word out”

  11. Be timely—be there

  12. Highlight your partners

In my previous columns, I addressed the first eight of these 12 approaches. This month I’ll cover the ninth.

Say “thank you” in different ways

A prominent major gift fundraiser has been known to advise those who attend his workshops to “thank each donor six times.” Now, he’s referring to mega-donors, those whose gifts run to seven, eight, or even nine figures. But the basic point holds true for donors at every level. The single most important thing you can do to bond a donor to your organization is to express appreciation—warmly, personally, and frequently.

Does this mean that you should send six thank-you letters or six e-mail acknowledgments for each gift? Of course not! It means you need to apply the same level of creativity to donor acknowledgments that you do to donor appeals.

In any respectable online fundraising operation, a bounceback message is automatically triggered when a gift is received. But that isn’t enough. It’s the minimum required, not the state of the art. To build strong relationships with online donors, you’ll need to do more.

Consider, for example, the following message from CARE (Atlanta GA)



And how about this excellent example from World Wildlife Fund (Washington DC)



In each case, the organization has used a widely observed holiday to highlight the donor’s connection to the group—and provided an unsolicited service that's the surest way to express appreciation . . . account management options in the case of CARE, Father’s Day cards for WWF.

Your own online fundraising will benefit from the use of similar communications.

Tom Gaffny can be contacted at Tom Gaffny Consulting, 71 Cliff Road, Wellesley MA 02481, phone (781) 685-6825, fax (781) 685-0817, e-mail tomgaffny@hotmail.com.


6. Ask Mal

Since 1994, when the Mal Warwick Associates Web site went online, Editor Mal Warwick has answered fundraising questions posed by visitors to the site. Hundreds of those Q&As are available here. In this feature, we'll spotlight one Q&A from the most recent month.

Question: A veteran direct mail fundraiser, now retired, supplied me with the following “standard upgrade chart” to use when determining how much more money to ask for in direct mail appeals:

Last Gift Amount 1st Upgrade 2nd Upgrade 3rd Upgrade
$1.00 thru $4.99 $5 $10 $15
$5.00 thru $9.99 $10 $15 $25
$10.00 thru $14.99 $15 $20 $30
$15.00 thru $19.99 $20 $25 $40
$20.00 thru $24.99 $25 $30 $50
$25.00 thru $34.99 $35 $50 $75
$35.00 thru $49.99 $50 $75 $100
$50.00 thru $74.99 $75 $100 $125
$75.00 thru $99.99 $100 $125 $150
$100.00 or more Last Gift “or more”

Is this an appropriate way to determine upgrade amounts?


Mal answers: This chart makes little sense to me. My colleagues at Mal Warwick Associates and I have found it most productive to vary the formulas used in upgrading gifts. For starters, we haven’t had much success in upgrading donors whose highest previous contribution was less than $25. In general, with donors of $25+, there are three types of upgrade—what I might call shallow, steep, and transformational.

  • A shallow upgrade might be used when poor economic conditions or a spotty history of giving suggests caution. The formula in such a case could lead to an Ask string of the following sort: $[LASTGIFT+10%], $[LASTGIFT], $_______. In cases where a percentage increase is indicated, the amount is usually rounded off to the nearest $5.

  • A steep upgrade is more widely used in direct mail. The formula in such a case could be: $[HIGHGIFT+30%], $[HIGHGIFT+15%], $[HIGHGIFT], $_______.

  • A transformational upgrade involves either a conversion from one-off giving to monthly giving or an invitation to join an annual giving club or giving society. In the former case, a donor who may have been giving gifts of $25 or so three times per year could be invited to contribute $10 or $15 each month via credit card. In the latter case, a donor whose highest previous contribution was, say, $250, could be invited to join a $1,000-per-year giving society.

7. Using video in online appeals

By Michael Stein

You’ve probably heard that online video is the big Internet story for 2008. As an online trend, it ranks high up with the 100 million subscribers of Facebook, precipitously dropping “open rates” for e-mail messages, the iPhone, and a winning U.S. presidential candidate who used e-mail, text messaging, and online video to help him win an election.

The people who make a living measuring things online tell us that Americans watch over 10 billion videos online each month, which accounts for over three hours a month per person, a 66% jump from the previous year. Drill down even more, and we learn the average online American watched 75 videos per month in 2008 (source:www.comscore.com/).

A big part of the phenomenal success of online video is the widespread availability of broadband Internet connectivity in homes and offices, and Web portals such as YouTube where 200,000 videos are uploaded each day by individuals and organizations. Over 200,000,000 videos are played on YouTube each day by viewers worldwide. With YouTube, it’s cool to spend three hours a month browsing for fun video clips of friends or celebrities.

Online video has been quickly adopted by nonprofits across the country as a powerful tool for communicating with supporters and donors. It's rapidly taking its place alongside the Web sites, e-mail messaging, and Facebook pages as a key technique for online engagement.

As you consider your online video strategy, here are my 10 tips for incorporating online video into your nonprofit messaging:

  1. Video should complement your other messaging. Consider how your online video will fit in with the other online and offline content that you’re producing. Video should extend other content so that it will attract viewers and a broader audience. Your online videos should fit into an existing campaign you’re engaged in so you can broaden the reach of your work.

  2. Let your creative juices flow. Online video gets high marks and praise when it can break out of the formula and entertain viewers. Make the investment to add music, first-person speakers, and lively camera angles to make watching fun, and to encourage viewers to forward the video to friends. You can use videos to introduce your organization, recruit volunteers, present slideshows of actual program activities, or show stories from the field.

  3. Keep video messaging simple. Videos often attract new audiences, especially individuals who may not be familiar with your mission and programs. Don’t assume your viewers are up to speed on everything you’ve done. Script videos to educate viewers from the ground up.

  4. Keep video messaging short. Under three minutes is best. If you must produce a longer video, break it into multiple parts.

  5. Use video to go in-depth about an issue. While it’s important to keep things simple, you can also use online video to explore a particular issue in depth, targeting your more knowledgeable supporters. They’ll appreciate the effort you’ve made to connect with them.

  6. Invite video submissions. Many organizations have been successful at opening their doors to video submissions from supporters. Your best volunteers may have dreams of directing a video about your organization.

  7. Keep your production quality high. To get a good end result, shoot your video with Web publishing in mind. Prepare a script and get feedback. Shoot “B-roll” (background visuals) to use in the video. Sound is critical to enhance the images.

  8. Aim to go viral with your video. The more fun and engaging you can make your online videos, the more the video will get talked about and passed along to others. Make it easy, on your Web site and in your e-mails, for people to forward the video to others, post to Facebook and MySpace, or add to their own Web site.

  9. Be patient and build your online video audience over time. Like Web site traffic and e-mail subscribers, building an online video audience requires patience and consistency. From campaign to campaign, online videos will attract a viewing audience among your core supporters and then more broadly.

  10. Learn more with the See3 “Guide to Online Video.” For a more in-depth look at this growing trend, I recommend an informative seven-part video series created to introduce nonprofits to online video. Find it here.

Michael Stein is Senior Online Strategist at Mal Warwick Associates, 2550 Ninth Street, Suite 103, Berkeley CA 94710, phone (510) 843-8888, fax (510) 843-0142, e-mail Michaels@malwarwick.com.


8. Evaluating e-mail

For your reading and writing pleasure, my colleagues at Donordigital and I have developed an assessment form that you may use to evaluate the effectiveness of the e-mails you send to solicit gifts or promote involvement in advocacy. Check it out!


9. Writing an annual renewal series

By Managing Editor Deborah Block and Paul Karps

With the economic downturn affecting just about every nonprofit in some way or another, it’s easy for panic—or, at the very least, uncertainty—to set in.

Organizations might be wondering just how much money to put into their direct mail efforts or whether to mail at all. And, of course, as some nervous fundraisers learned after slashing their mailing programs post 9/11, it’s never a good idea to stop mailing.

Instead, it’s once again time to get back to basics. And there’s nothing more basic than a basic annual renewal series!

So if your organization renews its members or donors by mail, you might want to consider forgoing cleverness, glitz, and intrigue as renewal Marketing Concepts. For it’s the tried-and-true that will most likely keep your boat and your budget—not to mention your organization—afloat amid these stormy waters.

That said, perhaps its been a while since you’ve mailed traditional renewal packages—or maybe you’re a novice at this kind of appeal. Whatever the case, here are some tips for making the most of your series:

Begin at the beginning

Your outer envelope should shout that it’s time to renew. (In fact, “It’s time to renew!” is an often-used teaser.) Another common carrier has a stamped “RENEWAL ENCLOSED.” In other words, think of your mailing as a magazine subscription notice informing your reader that her subscription is about to run out.

Thank you, thank you, thank you

All through your series, be sure to recognize the member or donor’s support right away. You might say something like, “Since you’re a valued friend, I want to thank you for your loyal support during the past year.”

Then, keep on stroking

Don’t thank the reader once and leave it at that. Several times during your letter, remind the reader it’s only with her annual support that you’ve been able to feed hungry families or save imperiled wildlife. Then tell her something like, “When you renew your support, we can move forward on a number of important fronts in the coming year.”

Stay on message

As with the outer, don’t beat around the bush. The reader should recognize this isn’t a special appeal or, heaven forbid, an acquisition package. Make it clear this is a renewal notice and you need the supporter’s ongoing commitment to continue your work for another year.

Keep the lingo coming

Sprinkle traditional renewal language throughout your appeals. Here are just a few examples: “Please renew today.” “During the past year, with your help, we were able to. . .” “With your continued generosity,. . .” “Can I count on your participation for the coming year?” Don’t be shy about repeating the word “renew” or its derivatives over and over again.

Treat donors as insiders

These are your bread-and-butter supporters. So make them feel like the special folks they are. For instance, acknowledge a donor’s insider status with such language as, “Since you’re someone we can really count on, let me fill you in on our upcoming projects.”

The old “cross-in-the-mail”

After your first or second notice, make sure you include some kind of language like, “If this letter and your renewal gift have crossed in the mail, please accept my appreciation. But if you have yet to respond, I look forward to hearing from you soon.”

In later notices, you can exchange the genteel “I look forward to hearing from you soon” with “please let me hear back from you without delay” or even “please respond ASAP.”

Switching up the content

As we move from one effort to the next, we typically like to focus on different aspects of an organization’s mission. This helps keep the content fresh and hold the interest of the reader. Additionally, one program might resonate more than another—increasing the odds of a renewal gift.

Change the tone

This leads us to the issue of tone and the increased sense of urgency as you move through the series.

In the first renewal, you’ll want to use more superlatives when it comes to the recipient. After all, this is her first chance to renew. So give her the benefit of the doubt and go all out to thank her for her commitment to your cause. (What’s more, most typically, the greatest number of your members or donors who renew will do so early in the series.)

In later notices, you can reiterate all that the donor’s renewed support will mean and how “we can’t do it without you.” You can even express your “concern” that you haven’t heard back from her. And don’t worry about sounding “pushy.” Many people do need a push!

Follow through on the theme

Your response mechanism should prominently include the word “renewal,” perhaps in a headline such as “XYZ Annual Renewal Form.” Same goes for the reply envelope. You might include stamped copy like, “PLEASE RUSH: MEMBERSHIP RENEWAL ENCLOSED.”

Click here for several well-crafted sample donor renewal packages.

Copywriters Deborah Block and Paul Karps are partners in BK Kreative, 1010 Varsity Court, Mountain View CA 94040, phone (650) 962-1499, e-mail bkkreative@aol.com.


10. Ho ho ho

More than half of Americans say they'll be giving to their favority charity during the holidays with the click of a computer mouse. This according to a study by Jupiter Research and reported in Fundraising Success Giving 2.0. The survey estimates that online charitable contributions in the U.S. will total over $3 billion in the 2008 season of giving.


 

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Mal Warwick's Newsletter: Successful Direct Mail, Telephone & Online FundraisingTM
(ISSN 1067-9316) is published 12 times per year by Strathmoor Press, Inc.,
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