September 2007
1. Spotlight on Success...Breaking down distance
2. Where’s Mal?
3. Answerman...How to create an appeal (Part 2)
By Peter Schoewe
4. Up?
5. Hands On...Donor-centered fundraising
By Mal Warwick, Editor
6. Two Approaches to Direct Mail Fundraising
7. Online...Nine tips for effective e-mails
By Nick Allen
8. Indifference
9. What's Working...This insert fits perfectly
10. Generosity?
11. Tips & Timesavers
12. Copy Corner...When one signer isn’t enough
By Deborah Block and Paul Karps
1. Breaking down distance
One of the underlying goals of every direct mail fundraiser is to figure out how to solidify the relationship between the organization and its core constituency.
In the case of many Native American nonprofits—located in some of the nation’s poorest areas and a world away from their donors—this is a particularly daunting challenge.
To get some insight into the issue, we spoke with Mark Tilsen, Creative Director at Lakota Express (Kyle SD)—a direct marketing agency on the Pine Ridge Indian Reservation that specializes in fundraising for Native American groups and causes.
Tilsen says, “As a marketer, I look at what my client has to share with the donor community—even though this charity is not physically part of the donor’s community. Because 99.5% of the donors live in other parts of the country, we’re always trying to find ways to lessen that distance.
“We try to break down the distance between the isolation of the reservation and what the media says is going on in the Indian community. To give the donors the truth in terms of how their contribution actually does impact people’s lives. And we try to illustrate that as best we can.”
FOCUS ON PERSONALIZATION
To that end, Tilsen explains that his firm has made a long-term commitment to personalization and to structuring donor communications based on donor behavior. “So the timing of who gets a letter and who doesn’t, the type of letter they get, the amount of the Ask they get, everything is very personalized.”
ADDING VISUALS
For one of Lakota Express’s clients, Oglala Lakota College, the agency is currently trying something brand new: including a DVD of the 2007 graduation weekend to high-dollar donors and offering it as a back-end premium to low-dollar donors.
“Most of what Americans know about Indian people,” notes Tilsen, “comes from TV or movies: a non-Indian view of what’s going on in the Indian community. This DVD is Indian people producing a video with Indian people speaking for themselves—presenting their culture, their college, their story to the donor.”
Tilsen sees it as adding value to the donor relationship. “Donors who watch this video are going to have an experience that I’m sure they’ve never gotten from a direct mail package before—creating a longer-term, deeper bond between them and the client.”
AVOIDING A GUILT TRIP
Tilsen has found he typically acquires new donors with a much higher average gift, even though that “lowers my response rate. If someone comes in at $45 or $55, the chances of building a long-term relationship are much higher than with the $12 or $8 donor.”
Most important, Tilsen has learned that “if we increase the guilt factor, we can get an immediate gift. But we’re not building that longterm relationship the organization needs to be stable and fulfill its mission.”
In fact, for one acquisition package for Lakota Funds, an economic development group on the reservation, Tilsen turns the guilt factor upside down, challenging the very thinking that a lot of people have about charity towards Indian people. The outer envelope screams out “Stop ‘Saving’ Indians!”—while letter copy emphasizes the need to give a hand up, not a hand out.
The results, comments Tilsen, “are much higher than any prospecting that I’ve done in quite some time.” Overall, the package is making about $6-8 profit per donor.
STICK TO THE PLAN
In terms of his underlying approach to direct mail, Tilsen believes that most profitable groups over a period of time are those that agree to a strategy and a plan and then follow it. “They mail on schedule, on budget, year after year. And they don’t allow whatever the winds that blow through organizations and whatever happens in the world to interfere with that.”
Tilsen concludes, “This is a business. Launching a direct mail campaign is the same as launching any other business. It requires a plan, an investment, and a stomach to accept a certain amount of calculated risk. But if you can mail on time and take care of your donors, then you’re going to be profitable.”
To see this entire package, click here.
2. Where’s Mal?
September 24-25, 2007 – Kansas City KS
Philanthropy Midwest Conference
Workshop: How Special Events Can Help You Raise More Money
Workshop: Seven New Challenges in Direct Mail Fundraising
More info
September 27, 2007 – Winnipeg MB
AFP Winnipeg One-Day Workshop
Direct Mail Fundraising for Advanced Practitioners
More info
October 2-3, 2007 – Palm Springs CA
PBS Development Conference
Workshop: The Copy Clinic
Workshop: Seven New Challenges in Direct Mail
Site: Desert Springs Conference Hotel, Palm Desert CA
More info
October 23-26, 2007 – Noordwijkerhout, The Netherlands
27th International Fundraising Congress
Master Class: Everything You Need to Know About Direct Marketing (But Would Take You Years to Learn on Your Own)
Mini-course: How CSR Can Mean More Money for Your Organization
Site: NH Leeuwenhorst Hotel
More info
November 11-12, 2007 – Charleston SC
Blackbaud Conference for Nonprofits
Pre-conference Workshop: How to Write Successful Fundraising Letters
Workshop: Crafting a Powerful Message to Win More Supporters for Your Cause
Site: Charleston Area Convention Center
More info
3. How to create an appeal (Part 2)
By Peter Schoewe
Segmenting donorfiles for appeal mailings is more intimidating and complicated than it needs to be. That’s because too many segmentation plans dive right into the details, often pages upon pages of them, using a bunch of scores, percentages, and numbers. Success is considered a grand total that matches a predetermined quantity.
But when you begin your segmentations so deep in the weeds with an undefined or too-simple goal, you can fall into two traps.
The first trap is to throw up your hands and cut too bluntly. A segmentation plan that targets all donors who’ve given a gift in the past 12 months is never a correct segmentation plan. It includes many donors who aren’t giving frequently enough or who haven’t given large enough gifts to make them worth mailing. In addition, every file has donors who may not have given for years, but whose past pattern of giving (or whose propensity to send erratic, but very large gifts) makes them good candidates for your appeal.
The second trap is just the opposite: refining the plan too precisely. Most nonprofit organizations invest money to acquire new donors. But as soon as those donors give their first gift, they end up being added to or removed from appeals based on a short-term profit analysis. Of course, a day will come when it’s acceptable to invest in them again, but it’s after passing a magical threshold called “becoming a lapsed donor.” Unfortunately, this short-term outlook leaves donors with great long-term potential to wither for months without being offered a compelling reason to make a commitment to your organization.
With those two traps in mind, I propose the following five steps for creating a segmentation plan for your donors:
- Never start with a grand total. Don’t print or produce a single component of the package until you have a firm idea of who your audience will be.
- Know your donorfile before you create the strategy for an appeal. Make it a priority to understand the types of donors who are vital to your long-term success.
- Decide which of those donors can be successfully engaged by the appeal you are creating. Ask yourself questions such as: “Would the offer we’re considering inspire new donors to make a second gift?” or “Will this appeal engage our best donors to increase their investment in our organization?” Be sure to answer your questions based on actual donor behavior, not on assumptions of how your donors will feel or react.
- Draft a segmentation plan that refers to categories and types of donors, rather than codes, scores, and deciles. This could include statements such as “Donors who gave to this appeal in the past” or “Our new donors from the past three acquisition campaigns” or “Any donors who’ve shown they have the capacity to give us at least $100.”
- If you have a small file, that may be enough. You can attach numbers to the categories, and you’ll have a quantity to mail. If you have a large file, you can pass on your strategy and goals to an analyst who will use precise measures to create a mailing list that will maximize both immediate net revenue and the long-term growth of your donorfile.
But, most of all, I urge you never to regard a segmentation plan as a black box that will churn through a database and give you a number. I once had a professor who told me that a statistical model built without a theory is worthless, no matter how significant its measures may be. If you’re choosing the donors you mail without having a clear understanding of how you want to build net revenue, encourage long-term value, and enhance donor relationships, you’re putting far too much trust in an equation.
Peter Schoewe is Senior Consultant, Mal Warwick Associates, 2550 Ninth Street, Suite 103, Berkeley CA 94710-2516, phone (510) 843-8888, fax (510) 843-0142, Web www.malwarwick.com, e-mail peter@malwarwick.com.
4. Up?
Many nonprofits are generating more money through direct mail than previously, but they’re finding it tougher to acquire donors. So says a study by Target Analysis Group and recounted in The Chronicle of Philanthropy. According to the survey, which evaluated the direct mail results of 70 national organizations, in the 12-month-period ending in March, contributions increased by 2% over the preceding 12 months. Yet the number of new donors decreased by 4%. This is in addition to a 3.5% drop in the prior year. Overall, the total number of donors dropped by 0.9%.
5. Donor-centered fundraising
By Mal Warwick, Editor
The Craft of direct mail fundraising grew out of what used to be called “direct mail marketing,” best known to the general public as junk mail.
It’s junk—because, all too often, it advertises goods or services the recipient has absolutely no interest in.
Junk—because, more often than not, it’s cheaply and obviously mass-produced.
Junk—because, in its blatant commercialism and gaudy use of color and graphics, it’s frequently tasteless.
Most direct mail fundraisers (like direct marketers in general) bridle at the mention of junk mail. The truth is, however, many direct mail fundraising appeals still richly deserve to be described as junk mail. The names and addresses of the intended recipients are often misspelled or long out of date. The criteria used to select prospects are frequently fanciful, at best. The messages are poorly crafted. The appeals reek of commercialism, dominated by cheap and frequently inappropriate premiums. Any resemblance between direct mail appeals like these and the pursuit of philanthropy is strictly coincidental.
MARKETING VS. FUNDRAISING
That’s why I believe it’s important to distinguish between the marketer’s approach to direct mail fundraising and the fundraiser’s. The marketer tends to think in terms of positioning . . . of broadcasting messages . . . of the organization’s needs . . . of statistics . . . of market share and market penetration. The fundraiser, by contrast, focuses on building relationships with donors.
In reality, of course, my colleagues and I blend both approaches. The discipline of marketing has produced an accumulation of shrewd observations and insights about human behavior, and it offers useful guidance in analyzing results. We would be fools to reject all that. Direct mail is, after all, a form of marketing that has proven itself so useful because (a) it enables us to communicate with lots of people at the same time and (b) many of its results are measurable. What is distinctive about the approach that we (and some other direct mail fundraisers) pursue is that we seek to put the donor at the center of our universe.
RELATIONSHIP FUNDRAISING
This perspective requires what Ken Burnett, the celebrated author of Relationship Fundraising and other books, calls the “90-degree shift.” He is fond of drawing an analogy between fundraising and marketing, citing the difference between the brand manager’s challenge and that of the customer relationship manager.
The brand manager at the W. K. Kellogg Company must sell as many boxes of Frosted Flakes as he possibly can to meet his monthly or quarterly target. By contrast, the customer relationship manager’s goal is to increase Kellogg’s share of the 11,000 boxes of dry cereal you may buy in your lifetime. The difference reflects a 90-degree shift in perspective—and that represents the difference between what I refer to as the marketer’s and the fundraiser’s approaches.
In my view, the concept of Relationship Fundraising popularized by Ken Burnett is based on four assumptions:
1. Most donors are generous and caring people. They want to help, and the fundraiser’s job is to inspire them to avail themselves of opportunities to do so.
2. Most donors are also intelligent. They usually know when they’re being taken advantage of, and they don’t like it.
3. Most donors expect to be treated courteously and are offended when they’re not.
4. Donors are as varied in their interests and habits as people in general. Some of them demand opportunities to express their individual preferences and to be treated as the individuals they are. All of them appreciate such treatment.
Burnett’s individual perspective aside, these four points form the basis of my thinking about fundraising. They help explain why I insist on placing such emphasis on thank-you letters and welcome packages . . . why I employ personalization as often as possible in appeals to current donors . . . and why I feel it’s critical to build appeals around the benefits to the donor rather than the needs of the organization.
THE COMMUNICATIONS STREAM
If you accept these four premises, then you’ll think about your development program in a holistic fashion, taking into account all the communications from your organization to your donors—not just those appeals your own department produces. The bi-monthly newsletter counts, too. So do the quarterly magazine, the annual report, the legacy marketing materials from the planned giving department, the invitations to special events, and whatever else might be included in the communications stream your donors may receive in the course of a year. If you want to put the donor at the center of your universe, you’ll analyze this stream of messages, research which items donors want to receive and which ones they don’t, and revise the fundraising and communication program accordingly.
But it’s not enough to break down the vertical barriers separating your department from all the other offices that independently communicate with your donors. You’ll also need to eliminate the horizontal barriers that, in so many nonprofit organizations, rigidly separate donors by giving level. Such divisions are well-intended. For example, by segregating upper-level donors in a “major gifts office,” extra-special donors are guaranteed extra-special treatment. However, all too often, this treatment means that these donors are excluded from the benefit of the messages you have crafted so carefully to inspire them to give. I have seen countless cases in which major donors—defined as those whose individual gifts reach the $1,000, $5,000, or $10,000 level—are removed from the direct mail or membership rolls and stop receiving most of the printed materials that succeeded so brilliantly in inspiring them to become major donors. If you truly subscribe to the concept of donor-centered fundraising, you’ll never make such a mistake.
This article is excerpted from Revolution in the Mailbox: Your Guide to Successful Direct Mail Fundraising, Revised Edition, by Mal Warwick, published in 2004 by Jossey-Bass Publishers. Copyright © 2004 by Mal Warwick.
6. Two Approaches to Direct Mail Fundraising
| The Marketer’s Approach |
The Fundraiser’s Approach |
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How can I position the organization to gain the broadest possible public support?
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How can I best inspire donors to provide generous, continuing support for the organization?
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What message can I deliver that will maximize response within our chosen market?
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How can I communicate with my donors, taking into account all that I know about them individually, to build the strongest possible relationships with them?
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How can I describe the organization and its needs, its history and its mission, in the most compelling way?
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How can I best relate the mission and the goals of the organization to our donors, in terms of their values, beliefs, and aspirations?
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How can I achieve optimum cost-effectiveness, generating the size and number of gifts that will maximize revenue at an acceptable cost?
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How can I minimize donor attrition, maximize donor retention and upgrading, and nurture relationships with my donors that will maximize their loyalty?
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How can I maximize market penetration and market share?
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How can I provide ideal opportunities for my donors—and for prospective new donors—to validate their values, beliefs, and aspirations by supporting the work of my organization?
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7. Nine tips for effective e-mails
By Nick Allen
E-mail may seem boring, what with Google Earth, Web 2.0, Twitter, widgets, and badges, but it’s still the workhorse of online fundraising and communications. In-boxes are more congested every day, and more and more people are checking their e-mail on cell phones and other mobile devices. So you’ve got to keep grooming your email to keep it readable and relevant.
Here are nine questions to ask when you’re preparing a message:
1.Is there a compelling reason to send the email? Is it urgent, interesting, funny, sad? Would you forward the message to a friend or family member? If there’s no good reason for it besides “it’s on the calendar,” consider taking the day off.
2.Does it have an effective “From” line? Usually the “From” is the name of the organization, but it could include the name of the signer, such as your Executive Director or a celebrity supporter, especially if the name of your organization is short enough that most people can see the name of the signer and the name of the organization in their in-boxes. The “From” and the subject line are the two main ways your recipient decides whether or not to open your message.
3.Does it have an effective subject line? We all struggle over this, and books have been written about it. One option for large lists is to test two or more subject lines and roll out the most opened one.
4.Does it make the point in the first vertical inch or two? Many people won’t see images—your header, wrapper, or photos—because their e-mail software turns them off. Or they may be getting your message on a BlackBerry or Treo or cell phone.
5.Is it easy to scan the message (since very few people read it all the way through)? Can recipients get the idea at a glance? Are the key terms and images clear to most recipients (remembering that most people don’t open most messages, and even when they do, they barely pay attention)? If you say “Plan B,” will everyone understand you mean the morning-after pill? What about the NLRB—do they know what it is?
6.Does the headline make the offer? Does the first or second paragraph make the point and provide a link for action? Is the call-out box simple and clear, making a single point and with no more than a sentence or two at the most?
7.Is it as short as possible? Does it contain vague, unemotional language that repeats what’s already been said? Can you edit out the useless words and clichés that just slow down reading or turn people off, such as “unwavering support” and “heartfelt tribute?”
8.Does the Ask feel compelling? If it’s advocacy, does the action feel as though it can make a difference? If it’s fundraising, is it clear what the money’s for, and does it seem as though your donation will make a difference?
9.Does it feel like one person writing to another? As impersonal as e-mail can be, you still want it to feel like one person’s message to another. Work with your signer to give the message a personal feel. If it’s from your Executive Director, can it mention something about her life? If it’s from Meg Ryan, can it mention an experience she had while making a film (“When I made When Harry Met Sally, we were reading about the famine in Ethiopia as we shot the scenes. Now 20 years later . . . ”).
There are plenty of other tips and tricks—technical and editorial—that can help your program. You can learn more at industry sites such as marketingsherpa.com and clickz.com, and nonprofit blogs such as The Agitator and Sea Change Strategies. You can also get my own e-newsletter at donordigital.com.
Nick Allen is Managing Director of Donordigital, which helps organizations use the Internet for fundraising, advocacy, and advertising. Contact nick@donordigital.com.
8. Indifference
Jeff Brooks’ Donor Power Blog recently picked up an important item called “The One Thing That Scares Customers Away” from the CustomersAreAlways blog. Here are the reasons revealed by a study of customers’ explanations for why they stopped doing business with a given company. The reasons were:
- Death 1%
- A move or relocation 2%
- A relationship with a salesperson 4%
- Price and other relevant costs 11%
- Dissatisfaction with the product 14%
- Attitude of indifference from someone representing the company 68%
Perceived indifference is by far the most common reason customers give up on a company. It sends customers away nearly five times more often than dissatisfaction with a product.
Nonprofits don’t usually have intense face-to-face interactions with donors. But there’s a critical point in the donor relationship where they can easily appear indifferent—immediately after a donor gives. It can play out in these ways:
- Late (or nonexistent) receipt.
- Thank-you letters that are more intent on educating the donor than thanking her.
- Lack of (or just lackluster) reporting back on the impact of the donor’s giving.
These things signal indifference; they’re the charity equivalent of the airline gate agent who shrugs off the fact that you aren’t getting home tonight.
Reprinted with permission from the Donor Power Blog.
9. This insert fits perfectly
When you consider what extra components—if any—to add to a direct mail package, you might think of a lift note, petition, drop-in photo, or the like. But for a recent acquisition package, the Democratic Senatorial Campaign Committee (Washington DC) came up with something we’d never seen before . . . one that makes perfect sense.
More specifically, one that makes perfect sense for this particular appeal and the letter’s famous signer.
Not surprisingly, the package’s Marketing Concept consists of a scathing attack on George Bush’s record in Iraq and here at home. The 2-1/2 page letter uses a series of bullet points and statistics to make its point.
The kicker is that the signer is none other than Al Gore. The ex-VP asks for the recipient’s support of the DSCC by stating emphatically, “It was the DSCC that engineered the Democratic takeover of the Senate—and they need your help now to keep control in 2008.”
There’s also a brochure-style piece slamming the President that includes “6 Reasons the DSCC Needs Your Early Support Today!”
As for the intriguing insert that so aptly fits the package’s theme—and Gore’s personality? The size and weight of a business card, the piece is printed two sides with seven stats on what the Democrats consider to be Bush’s financial bungles. The headline reads, “7 Numbers that Prove George Bush is Destroying America.” The mischievous subhead: “Show this to every Republican you meet!”
And can’t you just hear Al Gore urging every Republican he meets to do just that?
To see this entire package, click here.
10. Generosity?
Thinking about the ideal time to send out that next e-mail fundraising blast? Well, consider this: The NonProfit Times reports that a national survey by the Network for Good found online donors are at their most generous on weekdays—as opposed to weekends—and between 10am and noon. Among the other intriguing findings: Internet donors give the most money on Mondays, Tuesdays, and Wednesdays—though the actual number of gifts is evenly spread throughout the workweek.
11. Tips & Timesavers
Last year the Indiana University Center on Philanthropy conducted a study of high net-worth philanthropy on behalf of the Bank of America. Its most striking finding was that nearly all high net-worth households give—96.9% of those with net worth from $1-$5 million and 99.5% or higher for those with more money.
Among the implications of the study for the practice of fundraising were these:
- Focus on stewardship when fundraising. Donors want to know the impact of their gifts.
- Give donors multiple ways to see (hear, feel, touch) the impact of their giving.
- Even if you aren’t requesting funding for it directly, make the case for administrative functions. Donors want to see honest operating expense reports.
- Explain the relationship between financial security and donating to allay fears that generous gifts will jeopardize donors’ financial security.
- Propose making provisions in a will or an estate plan as a means of planned giving.
Thanks for this tip to Giving USA Spotlight. Send your own Tips & Timesavers to mal@malwarwick.com.
12. When one signer isn’t enough
By Deborah Block and Paul Karps
The real power of direct mail fundraising lies in the ability it gives you to communicate on a warm, personal level with your donors, members, and prospects. And the very essence of this dialogue is to create a one-on-one relationship between the letter signer and the reader.
Yet we’re well aware how many organizations face internal political situations in which the political circumstances dictate two letter signers. In other columns, we’ve gone into detail as to why this is almost always a bad idea. Now we’d like to offer you some specific ways you can keep your bosses happy . . . while sticking to the tried-and-true one-signer approach that maximizes the strength of the direct mail medium.
INCLUDE A LIFT NOTE
It’s the most obvious solution to the dual-signer dilemma: Have these two people sign their own letters. One signs the main letter, the other a lift note. That way, each one can be personalized to the respective signer.
What’s more, the lift note will serve to complement the main letter—specifically, by expressing an additional point of view. In fact, we’re always confused when we see a lift note signed by the same signer as the primary letter. At least in our book, this seems counter-productive to the notion of adding a short note in the first place.
ENCLOSE A MEMO
Consider this a variation on the lift note concept. The strategy is to include a separate memorandum written by the person who would otherwise be the co-signer of the primary letter. The memo could then be addressed to Person #1, who can explain in her own letter that when she got this memo from Person #2, she wanted to pass it along. In this case, you could even add a post-it note to the memo from the letter signer, as in, “Here’s the memo I wanted you to read.”
An alternative is to have Person #2 address the memo to the donor herself (personally or in a generic sense). This works well when the memo-writer is “in the field” and, therefore, unable to communicate directly with the donor.
FEATURE A QUOTATION
Another strategy is to quote the second person prominently in the letter. For example, “As our founder and President Jane Smith has said . . . ” Indeed, this approach might actually elevate that individual’s status in the mind of the reader (which will surely please the higher-ups).
The quotation could be in the body of the letter—indented or in italics—or even serve as a Johnson Box. In these ways, it will really stand out and look important.
ADD COPY TO THE REPLY SLIP
One final approach would be to write a brief note from Person #2 as part of the reply device. This could be done by either including it in a larger formatted reply—say an 8-1/2 x 11" sheet—or by adding a second panel to a standard 3-1/2 x 8" one. The advantage of using the reply as your communication vehicle for the second individual is that it gives you the opportunity to personalize this message to the reader—since the entire form will already be lasered.
Managing Editor Deborah Block and Paul Karps are partners in BK Kreative, 1010 Varsity Court, Mountain View CA 94040, phone (650) 962-9562, fax (650) 962-1499, e-mail bkkreative@aol.com.
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