Lists, Data, & Software
What is the "standard" response rate is for new donor acquisition? What information should be in our donor database? How do we add names to a list? What's the best way to obtain age information about donors? Can we maintain our donor database in-house? Can you recommend a good database for nonprofits? Can you recommend GiftWorks donor management software by Mission Research? How do we choose acquisition lists? Do "compiled" lists work for donor acquisition? What kind of acquisition lists work better -- nonprofits or magazines? Where can I buy a list for an acquisition mailing? Can you recommend names of companies that sell or rent donor lists? Should a small, local organization buy a mailing list? What are the criteria for segmenting a list? How can we keep our lists clean? How can we clean up an old list? Should one-time memorial donors be added to cultivation lists? What can cause a list to have no responses? Are there services available for maintaining mailing lists? Can you suggest some caging firms on the East Coast? What fundraising software do you recommend? What are standards for counting and reporting members?
What is the "standard" response rate is for new donor acquisition?
We're beginning a direct mail acquisition program. Can you tell me what, if any, the "standard" response rate is for new donor acquisition? I'm projecting a .6% response to our library cardholders list based on rather sketchy historical data and prior experience with direct mail in other organizations. But it's a tough sell to management who thinks the response will be much higher. In my experience a .5% - 1.5% response rate for new donors is typical, depending on the list. Can you tell me what rate your firm has seen as typical, and where I might find more information?
Mal answers: You're on the right track. Decades ago, it was reasonable to project response rates in acquisition of two percent or more. That still happens, and it could conceivably be the case with a warm list such as that of your library cardholders. The major variables in your case are the demographics of the cardholders and the extent to which they feel affection for the library. Unless you've done market research, you probably won't be able to guess the effect of either factor on your results.
The "typical" response rates of 0.5% to 1.5% you're referring to are for campaigns involving lists of rented or exchanged donors, members, or subscribers obtained through list brokers. Those experiences aren't relevant to your circumstances. Unless you want to spend a bundle researching the prospects, you'll probably just have to take your chances and mail.
Our Information Services department is converting our organization to a new database, which they say is adaptable to our development needs. What would you recommend as MUST HAVEs for direct mail as they design the system for us? What must a direct mail program have in order to be able to operate smoothly, in terms of segmentation, testing, tracking, etc. (which we have done very little of). We are just starting to become more "sophisticated" in our direct mail strategy, and I have a basic idea of what we would like to start doing, but have no idea how to "translate" that to the IS staff in terms of what we need the computer to do. Any thoughts for us?
Mal answers: A few years ago I prepared a checklist that I think comes close to providing a direct answer to your question. I know it's not comprehensive, but it's a good start.
Information to track about every individual donor
• Full name, correctly spelled
• Preferred title (Mr., Ms., Mrs., Miss, Dr., etc.)
• Full current address
• Date, source, amount of first gift
• Date, source, amount of every subsequent gift
• Additional involvements (volunteer, board, activist) in organization
• Whether donor responds to special appeals (or merely contributes once annually
• Whether donor responds to telephone appeals
• Whether you may exchange or rent donor's name and address
• Whether your organization is named in donor's will
Additional information useful to track about every high-potential donor
• Birthdate
• Nickname
• Name of spouse
• Names of children
• Children's birthdates
• Additional work and home addresses
• Special programmatic interest(s)
• Other notable likes or dislikes
• Approximate dates, amounts of large gifts to other organizations, especially if similar • Name(s) of board, staff, or volunteer(s) able to contact donor personally
• History of individual board, volunteer, and staff contacts
In addition to that raw data, your IS staff should be prepared to produce
regular reports of the following information:
• number of donors whose gifts fall within various ranges (e.g., $1-9, 10-24, 25-49, 50-99, etc.)
• number of donors whose last gift was received within certain intervals (e.g., 0-3 months, 4-6 months, 7-12 months, 13-18 months, 18-36 months, 37+ months)
• number of donors by the number of their contributions within the past x years (maybe 1 year, 2 years, 3 years, or, possibly, forever): 1 gift, 2 gifts, 3 gifts, 4+ gifts
• cross-tabulations of each of these benchmarks with each of the others
• average number of gifts per donor per year
• average number of revenue per donor per year
• percent of last year's donors who gave again this year -- distinguishing between those who gave their first gift last year, those who had already given previously in addition to giving last year, and those who gave in previous years but did not give gifts last year
There's lots more than this, but those measurements will get you started!
How do we add names to a list?
How do you recommend adding new names to a list...what techniques and selction factors ensure widening our net?
For a more general discussion of your question, which is a highly complex one, please take a look at my book, "Revolution in the Mailbox."
What's the best way to obtain age information about donors?
What's the best way to obtain age information about donors? What do you think about adding the following to our remit form: "Which of the following age groups are you in (optional)?: 30-40 yrs/ 40-55 yrs./ over 55 yrs.:
Mal answers: First, if you have a standard "remit form," I suggest you use up the copies as quickly as possible. It's far better to create a response device for each mailing as it occurs, with the text and any graphics specific to the appeal. More importantly, with existing donors, it's a mistake to ask them for gifts in a standard array (such as "$25, $50, $100, or more"), since they've already demonstrated how much they want to give. You should take advantage of that by personalizing the response device in each appeal.
Second, without testing this proposition, I wouldn't know what to advise you about it. It could depress response — because many people are sensitive about their ages, or because the more information you request, the more excuses people will have to set aside your appeal — or it could come across as a sign that you are genuinely interested in knowing more about your donors and thus have no depressing effect.
Chances are, I would guess, that those who are unsettled about the question would simply skip it. But I don't know that. In any case, you will persuade only a small percentage of your donors to supply that information in that way.
There are other ways to obtain age information. I prefer to seek age information in questionnaires or surveys, or by "appending" age data from a publicly available database, which have been compiled by big vendors such as R.L. Polk & Company or the printing company R.R. Donnelley. You can contract with such a company, or one of its resellers in the fundraising field (Target Analysis Group of
Can we maintain our donor database in-house?
Hoping you have some insight into this: we've been thinking about taking our list management and moving it in house. We would still work with list brokers for our dierct mail list planning. Do any of your clients do this successfully and if so, could you point me in their direction so I can get some advice? Do you have any words of wisdom in this area?
Mal answers: Many nonprofits insist on keeping list maintenance in-house, as you're considering now. Those we work with almost invariably experience several problems -- well, to be charitable, let's call them challenges:
(1) The software -- whether it's Blackbaud or from some other vendor -- is typically costly, complex, and requires technical support to operate properly. It takes a great deal of skill to put some of these packages to work in the service of direct mail fundraising.
(2) The conversion to new software is lengthy and rarely trouble-free. Really complex programs sometimes take years to set up properly.
(3) Technological change -- both in software and in hardware -- is very rapid. It can be an expensive proposition keeping up with all that -- and not necessarily cost-effective for an in-house operation. Nonetheless, falling a few years behind could put you at a great disadvantage when the time finally comes to convert to a new system: another protracted and expensive conversion.
(4) The people you have to hire to run these in-house systems are typically paid little, and they turn over quickly. Few people are content to work month after month, let alone year after year, doing data entry. In the worst case, you'll start to feel like a personnel agency managing a revolving door process.
Those are the reasons why I started my own service bureau to assist our direct mail clients. Except for the very largest nonprofits -- with files in the hundreds of thousands of names -- I recommend outsourcing.
Can you recommend a good database for nonprofits?
I m planning a database upgrade/new database. We are a nonprofit with over 250,000 records. We use ebase file maker pro 5 and want a better database. Is there a better database geared for nonprofits? If yes, what is it?
Mal answers: I suggest you check into GiftWorks at www.missionresearch.com. This is a new product developed by a thoroughly professional software development team with an impressive record in the industry — and a strong commitment to build software of true value to the nonprofit sector. GiftWorks is easy to use, flexible, adaptable — and cheap. The company intends to seize a large share of the nonprofit market, and it has priced GiftWorks appropriately.
GiftWorks isn't yet fully featured, but it's moving quickly in that direction. I expect to work with the company to expand the software's reporting functions and to increase its functionality for donor file maintenance. Even so, the program is already poised to compete effectively with other software offerings that cost thousands of dollars more.
FYI, I've been asked similar questions by countless nonprofits over the years. In the past, I've always thrown up my hands in defeat, since I've never before been comfortable recommending any software for this purpose. I think you'll find GiftWorks is well worth considering.
We are considering purchasing GiftWorks fundraising/donor management software by Mission Research. You are listed under the "testimonials" section of the website. Can you please tell me if you would recommend this product and how you would rate your experience using it?
Mal answers: For starters, I want you to know that I am a member of the Advisory Board of Mission Research, the company that has developed GiftWorks. I also have a modest investment in the firm. However, I was invited to join the Advisory Board, and I made my first investment in the company, because I learned through a personal demo of the software by CEO Charlie Crystle how remarkably well-designed the software is. Later, I met with Charlie and some of the other principals of the firm to discuss the evolution of the software, and I provided them with information about the mission-critical needs in fundraising for software to collect, manage, and report on data to permit full development of the potential for direct marketing. I haven't personally used GiftWorks, but I believe I have a unique perspective on its development. And I couldn't be more impressed. The software is able to do pretty much everything I'd want it to do — and it does so smoothly and without a whole lot of fuss.
GiftWorks brings several strong advantages to the software marketplace:
Its designers and developers are a team with a track record of success in software development. They're not, like those who have marketed other options, people from the nonprofit sector who have grown their own systems "at home" and then sold them to other organizations. These are software development professionals. They know what they're doing.
This is a new product that isn't saddled with the limitations of legacy systems. The major offerings on the software market were developed many years ago for computers entirely different from those now in wide use. GiftWorks is tailored to meet today's technology to confront today's and tomorrow's fundraising challenges.
Mission Research is not just offering another product to compete in the donor management software market. The company has priced GiftWorks to put it within reach of the very smallest nonprofit, though I believe the program will work for a great many much larger organizations that are now struggling with seemingly unmanageable systems. Mission Research intends to gain a large share of the market, displacing many of the software offerings that have caused so many fundraisers to tear their hair out by the roots. I believe believe the company will succeed.
It's normal in the case of a new company to question whether it has the resources to ensure that it will be around in a year, five years, or ten — whether you can count on a stream of upgrades. Mission Research started very small, with the capital the developers could muster on their own. However, as the product has developed, more and more investors like myself — including some with much more money — have joined the company. Capital is accumulating fast. I'm convinced Mission Research is here to stay. (FYI: though I don't have a whole lot of money, I'm a seasoned investor with decades of experience in judging start-up companies.)
One more important thing: To grow big, most start-up companies attract venture capital from investors whose only interest is to make a great deal of money. Mission Research hasn't accepted any traditional venture capital. The firm is independent and will not be guided by sharks who insist on such things as raising prices through the roof to make a quick buck. The company is committed to socially responsible business policies and practices.
Now you know much of what I know. But there's one last point to consider: GiftWorks is so inexpensive compared to the major programs in the market that it makes sense to buy the program just to try it out!
How do we choose acquisition lists?
We have a new membership brochure that our board president felt strongly about doing and mailing out to a list that we would buy. We are an urban forestry educational organization and I feel that those who would join us are the same type who would join the Arbor Day Foundation. So, I have looked into a "conservation minded" list of those who have given to that cause. How does one decide who in the state to send to? (We are a statewide agency) Do you go to the major cities and use certain zip codes? Our name is the Tennessee Urban Forestry Council, so do we go with only urban areas? I would appreciate your thoughts.
Mal answers: Your questions focus on list selection, and I'll get to that topic. First, though, I urge you not to mail a "brochure" as a way to recruit donors or members. If your board president can't be dissuaded, then conduct the very smallest test you can possibly conduct. You'll need instead a letter package — without a general brochure included — if you want to recruit supporters by mail. Every bit of research I've ever seen has made it clear that brochures (and I suspect you mean self-mailer brochures) simply don't work as an acquisition device.
Now for lists. Once you have a suitable donor acquisition package developed, you'd be well advised to talk to a list broker — and I suggest someone in New York or Washington DC who specializes in fundraising lists — about appropriate targets for you. The National Arbor Day Foundation is an excellent example, but you'll have to check with a list broker to find out whether that list is available to you. When you do, you'll learn about other, similar lists — ideally, lists of people who have previously sent money by mail to nonprofit organizations. A broker might also suggest such possibilities as the subscribers to a city magazine (if there are any) in
Most fundraising lists made available on the market require a minimum rental (or exchange) of 5,000 names. I have no idea how many appropriate national lists would contain 5,000 or more names within
Do "compiled" lists work for donor acquisition?
In determining an acquisition list strategy for an NPO that deals with terminal illness, would "illness/health" related lists (like cancer research) be a better choice than a select of known philanthropic donors (to a variety of factors)? I've read that the average donor these days gives to 10 different types of organizations.
Mal answers: It's certainly true that most donors -- direct mail donors, at any rate -- give to several organizations. (Whether the average is 10 or not, I wouldn't know.) Sometimes they give to organizations that have similar missions. For example, there are environmental donors who may give little or nothing to other organizations save perhaps their alma mater and/or a place of worship. Others may spread their largesse over a wide variety of charities.
However, the breadth of possibilities is breathtaking. The donors on a list of "known philanthropic donors" could have given to a ballet troupe, a university, or the Red Cross -- none of which would suggest they are necessarily good prospects for your organization. On that score alone, I suggest that you would be better off seeking some degree of affinity in the interests of the prospective donors you include in your donor acquisition mailing.
There's another reason, however. Donor lists supplied by individual organizations are almost always better bets than so-called "compiled" lists of the sort you're referring to. (A list of "known philanthropic donors" was compiled by someone -- a list broker, probably.) Its origins are uncertain. And, more to the point, the chances are that it's an older list, less "fresh," and therefore not a great bet as a prospect list for you.
What kind of acquisition lists work better -- nonprofits or magazines?
In planning a NPO acqusition list strategy (when they have had minimal work/success in the area) what would be the better mix of lists -- NPO lists (like American Cancer Society), or direct mail responsive magazines (like the New Yorker)?
Mal answers: When I'm asked a question like this, my typical answer is Yes. Especially in a case where there is little or no previous experience in the mail, it makes sense to test several different markets in the initial acquisition mailing. Both areas you suggest would clearly be candidates, as far as I'm concerned.
Where can I buy a list for an acquisition mailing?
Can you recommend some reputable companies where I can buy a list for an acquisition mailing?
Mal answers: There are a great many list brokers that can gain you access to thousands of mailing lists for one-time rental or exchange (not purchase) in fundraising programs. I'm not sure where you can find a comprehensive guide to brokers that specialize in fundraising lists. You might try the Direct Marketing Association in
Can you recommend names of companies that sell or rent donor lists?
Mal answers: There are hundreds of list brokerage companies in the
The companies with which I've had personal experience include Names in the News (
Should a small, local organization buy a mailing list?
Our small local but dedicated organization is hurting financially. I am the only staff and of course end up doing everything, including fund raising. We did do a mailing but it was not a success for several reasons, most important of which is that we do not have a good mailing list. How can we get a better one? Is it worth while to buy one? We have tapped into some names from similar local organizations but the pool is small and limited. Any ideas would be appreciated!
Mal answers: I do not recommend that you use direct mail as a fundraising technique for your neighborhood association. By its very nature, your organization is local. You're able to conduct fundraising face-to-face -- the ideal fundraising method because it's most powerful. The mails might be useful as a way to broadcast information, through a newsletter or other devices, but not for fundraising. Try houseparties instead.
What are the criteria for segmenting a list?
How do you segment a list (what criteria do you use), and how large does it need to be to be segmented? The organization that I run has a list in the vicinity of 1000, maybe 1100. I tried segmenting a mailing by doing a more personalized piece to the donors of $50 or more, and a more generic one to the rest of the list. While the mailing to the $50 & over only went out to 114 people, it brought in 42% of the results from the mailing. Anyway, how do you segment a list?
Mal answers: It looks to me as though you've already gotten the gist of segmenting! There are criteria other than dollar amount you can use -- most importantly, recency: how recently you received the last gift, and that one's important -- but with a list as small as yours, none of the others would make a lot of sense.
To learn more about this, I suggest you read my book, Raising Money by Mail. It will answer this and lots of other questions you're likely to have.
Good luck!
How can we keep our lists clean?
As we are getting better at direct mail, I'm starting to get very concerned over how to keep our mailings clean (both internal lists and rented/exchanged lists). Our internal lists are merged/purged, NCOA'd and CASS certified by the mail house. But, we still seem to have a lot of dupes. Do you have any suggestions on how we can reduce this? I'm hoping to educate myself to 1) communicate better with our mailhouse, and 2) increase the effectiviness our direct mail program. It seems that the major catalogs do not run into such problems. Is there better sfotware out there that they use? Or, do they have the ability to really "comb" their lists to eliminate the dupes? Thank you in advance for your help!
Mal answers: The problem you describe is a common one. Unfortunately, the quality of data entry performed at most commercial service bureaus is very low. All too often, they hire people at low (often minimum) wages, and lots of the employees are either semi-literate or lacking in English proficiency. Misspellings -- the cause of so many duplicates -- are inevitable.
Before leaping into the fray, however, be sure that your problem is significant. If the percentage of duplicate or bad records on your file is small -- say, 1% -- you should probably shrug it off. If it's 5%, 10%, or more, well, you've got a real problem.
The big catalog and magazine mailers avoid most of these problems by (a) getting more accurate information from their buyers -- since they're getting items of value in the mail -- and often (b) double-entering and comparing every record before saving it onto the database.
For a nonprofit, there is only one solution I know to addressing this problem: impose quality control. If your mailhouse isn't receptive to making changes in its procedures, well, there are some service bureaus that have much higher standards than others. Ultimately, the solution may be to move the file.
How can we clean up an old list?
I am new at LCCS and have inherited a mailing list that has over 3,000 regular donors and 30,000 non-donors. The non-donors have not received anything from the institution in several years, nor can anyone tell me how they got on the list. What is the best approach to prospecting this list for donors?
Mal answers: There are, of course, several different ways to approach this challenge. You might simply start by sending an appeal to test the non-donors' responsiveness. Or you could begin instead by sending them one or two issues of a newsletter by way of cultivation — and then mail them an appeal. But I recommend a third course.
I suggest you write to them to ask whether they're interested in hearing from you. What could be simpler than that? You could send a letter with a Business Reply Card (BRC) enclosed, that the recipient could return with an answer to the question. Alternatively, you could mail a double-postcard, with one-half a BRC that includes the recipient's name and address and his or her response to the question.
If response to this first mailing is strong — say, 10% or more — you could then repeat it with the non-responders, which might bring in another 5-6%.
Whoever responds affirmatively could then be placed on an in-house prospect list — and then you could decide whether to solicit them straightaway or to precede an appeal with one or more newsletters.
Please let me know what you decide to do, and how it turns out. Yours is a classic challenge, and others can benefit from what you learn.
Should one-time memorial donors be added to cultivation lists?
If someone gives a one-time gift in honor or memory of someone, should we add them to our newsletter mailing list and begin to cultivate them? There seem to be differing schools of thought regarding the cultivation of individuals who give to your organization in honor or memory of someone.
Mal answers: I've heard that this practice yields mixed results. Some people report that a meaningful number of memorial donors give again later. Others say they have had little luck persuading them to do so. Most such gifts appear to be a one-time phenomenon, but some such donors may be willing to contribute an honor or memorial gift on an annual basis. Others may have deliberately chosen your organization for honor gifts because they — the donors themselves — feel an affinity for your mission, so they might well be good prospects for further giving. On balance, I would take the chance that the cost of cultivation is worthwhile — but I would limit it to, say, one year. If there's no second gift within that time, I would be inclined to give up.
What can cause a list to have no responses?
I recently did an aquisition mailing and I purchased 10 lists from a reputable list broker. I tried a list I hadn't tried before. Out of 8,000 names on this particular list we did not receive one response, no less a return of address. I asked my mailhouse to verify that they included this list in the merge/purge, which they did. The mailing verification from the post office matches the number of pieces they said they mailed out, and the list broker checked the list and said they could not find anything wrong with it. I am puzzled, not to mention out of some money because of this. Any clues to what went wrong? Thanks for input.
Mal answers: Early in my career in direct mail -- but, blessedly, not since then -- I had a couple of experiences like this. At first, I was inclined to write off the phenomenon as just one more indication of how crucial is the choice of lists.
Then I became better acquainted with the mechanics of the mailing process itself -- and I was no longer so sure. Perhaps you really made a disastrous pick. I suppose that's possible. But it's also within the realm of possibility that:
(a) the list owner (or its service bureau) sent the wrong list of names to the merge-purge house. Perhaps the service bureau housed dozens or even hundreds of lists, making occasional errors of this sort more likely. Stranger things have happened. (In fact, I can document one case where that happened to me.)
(b) to save fuss and bother, the list owner had selected a single segment of its list, say, three years ago, to send to any outside mailer to test -- and this small list had become so badly overused that it simply stopped responding. This would be stupid for any list owner to do, because it would make it far less likely that other mailers would roll out to the list, but human behavior isn't always rational, is it?
That's the best I can do for guesswork. Better luck next time!
Are there services available for maintaining mailing lists?
We recently merged three reasonably sized, yet disparate, databases, deleted duplicate addresses and merged our fundrasing records to develop a working software package for fundraising. We then mailed a single piece (our first "appeal grande") in our history to all members of our database (members, former members, former donors, friends) — with little to show for it as yet. We aim to test several subsets in 2005, yet the return for this mailing has been poor, to say the least! The popular guess here is too many bad addresses, which brings me to my question: How do we know if we have good addresses? Are there subscription services available to keep our data current?
Mal answers: Ooops! Cart before the horse, eh? The answer is yes, there are ways to update a mailing list, and you might have saved yourself some anxiety (and some money) if you used them before sending an appeal. It's never too late, though!
First, the U.S. Postal Service constantly updates its Change-of-Address file. There are many service bureaus and lettershops around the country certified to run this file against lists such as yours. Charges are modest. That's a great place to start.
Once you've eliminated the hopeless addresses and updated those that can be corrected, then it makes sense to mail something — not an appeal — to the people on the list to ask whether they would like to stay in touch with you. If you publish a newsletter, for example, you might offer a free subscription. Just send, say, a double-postcard, with one half detachable that contains a checkoff for the addressee to indicate interest in staying in touch. (Both halves would include the addressee's name and address.) And, by the way, I suggest you imprint "Address Service Requested — Forwarding Postage Guaranteed" (or whatever similar message your postmaster recommends) to ensure propery delivery.
I wouldn't give up on those who don't respond to that post card mailing. But those who do respond would probably be your best prospects for gifts. You might elect to personalize the appeals to them.
Now, with all that said, I'll go out on a limb here and suggest that you might consider whether the appeal you sent was in some way partly responsible for the poor response. True enough, the list is the most important element in any appeal. But the offer, the package, the copy, and the design all play roles, too.
Can you suggest some caging firms on the East Coast?
We are looking around the Philadelphia area for Caging Firms and are unable to find any. I have called several local non-profits to see if they use any caging firms to process their Direct Mail responses and they only use local banks (Lockboxes). Can you suggest some caging firms on the East Coast?
Mal answers: My colleague, David Dogan, who runs my firm's Washington, DC office, reports as follows:
Two firms come to mind on the East Coast. Both are in Hagerstown, MD:
Direct Mail Processors, Inc., 301-714-4700
Merkle Response, 301-790-3100
What fundraising software do you recommend?
Mal answers: I wish I could help you. Unfortunately, I tuned out on this question many years ago. There are so many vendors, so many software packages, and such frequent changes in technology that it seemed
to me a full-time occupation to track all this stuff. I've been able to get away with this habit because virtually all my clients have either outsourced their back-end operations to service bureaus or have bought one or another of the big-ticket systems that generally include hardware as well as software. Perhaps the folks at CompassPoint or at the Media Alliance can point the way for you. They're both in
What are standards for counting and reporting members?
Are there any guidelines or industry standards for counting and reporting the number of members a nonprofit organization has? When an organization reports numbers to the media, is it acceptable to count all members who have contributed to the organization regardless of their recency?
Mal answers: As best I can tell, standard practice is to exaggerate the number of members when reporting publicly. After all, if an organization has 50,000 members whose dues are up to date, isn't it more impressive for them to include all their members with dues in arrears and claim 100,000 members instead?
In my opinion, however, there are practical limits to this practice. Beyond a certain point, such numbers are no longer credible. For example, if an organization is engaged in grassroots lobbying and can never mobilize more than a few thousand faxes, letters, and emails to Congress, it's not believable that they have hundreds of thousands of members. I also think there are ethical questions that come into play.
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