Other fundraising questions
How many nonprofits actually have a marketing plan?
Should we outsource or get rid of our failing development program?
Is brand development a strategy of fundraising and why?
Does a Foundation like ours lead with the identity of the Foundation or the organization it supports?
How can I measure the impact of an advertising campaign?
Is an annual report effective in fundraising?
What's a "successful" response rate for a survey?
How does e-mail copy differ from printed direct mail?
What is the difference between "nonprofit" and "not for profit"?
How is political fundraising different from nonprofit fundraising?
How is raising money from corporations different from individual fundraising?
What can you tell me about surveys and telefundraising?
Why do ethics standards not allow for percentage-based fundraising?
How long do you have to keep copies of checks from donors?
A few questions about testing and confidence levels
Is it better to devote fundraising resources to "trinkets" or to results?
Is it possible to project how much diversified funding sources will increase each year?
Can a foundation accept credit card gifts on its web site?
How can I verify old names and addresses?
Can a "non-event" be effective as a fundraiser?
What's the best way to announce a merger?
How can we remind donors of a merger or name change?
What can I do about an incompetent boss?
What should I know about fundraising in Spain?
How can a client of our organization ask for a gift?
What's the difference between a membership and an annual fund?
How do I raise money for separate but affiliated organizations?
What's the difference between Prospect Identification and List Research?
Is our lapse ratio unusually high?
Is telefundraising dead?
Please discuss the usefulness of telemarketing fundraising compared to direct mail.
Can you provide some information about donor solicitation in quarterly newsletters vs. direct mail packages?
Which business spends the most money on direct marketing in the world?
How can I get a copy of Type & Layout?
How much of a return can a nonprofit expect from a BRE enclosed with a newsletter versus the cost of printing it and including it in the mailing?
Is a donor less likely to respond generously to a specific fundraising request mailing if he or she recently sent a smaller donation using a BRE that came in a newsletter?
How does religious fundraising differ from other charitable fundraising?
Can you provide recent statistics on direct mail response?
Can you help me with direct mail strategy in the university environment?
What's more important: quality or quantity?
What can you tell me about direct response television campaigns?
Is it advisable to place an insert in a utility bill?
How does a direct mail appeal differ from corporate fundraising?
Is it better to test on an acquisition mailing or to existing donors?
How do you define e-philanthropy?
Does "success" sell better than "duress"?
How do I get clients as a freelance writer?
What are the best contract terms for an engagement with a writer?
Is there much difference between urban and suburban direct mail?
Have there been any studies done on urban vs. suburban direct mail soliciting?
What's the standard practice for counting the members of an organization?
What percentage of first-year donors will give a second gift?
Do you have any experience using Broadcast Voice Messaging (BVM)?
Is an EFT system worthwhile for a small organization?
How much money can you make as a copywriter?
Are my quantities too small for accurate testing?
How many nonprofits actually have a marketing plan?
How many (or how few) non-profits actually have a marketing plan? I've found very few that do, and I think we're missing something that many businesses have found useful. Many have strategic plans, however. What components do you believe are essential in a good marketing plan? Your Five Strategies book has some useful information related to this general topic.
Mal answers: You've put your finger on the unfortunate truth: despite lip service to management principles that have worked in the private sector, few nonprofit organizations really have adopted them in practice. To take the example you cite, a marketing plan — for an organization like yours with an annual budget of $7 million — would seem essential. But I haven't seen many in place (other than somewhere on a shelf or in a file drawer).
However, rather than try to convey the essentials of marketing in what needs to be a brief email message, I'll refer you to a deceptively simple but extremely useful book on the topic: the Marketing Workbook in two slim volumes from the Amherst Wilder Foundation. I've found the writing to be accessible and to the point and the exercises to be straightforward and insightful enough that I sometimes apply them in working with my clients.
Should we outsource or get rid of our failing development program?
Dear Mal, Confidentially, We have 7,000 members (donors of less than $250 annually). For the fiscal year ended on June 30, 2007, the membership program cost $246,805 (including wages and overhead) and grossed $250.401, for a net of $12,596. This income to expenditure ratio means that less than 5 cents of every dollar donated by our members is spent on programs. I find this unaceptable. Especially as we did not invest in acquisitions. I'm considering 1 outsoursing the program. 2 dumping it (kind of mean to our long-time supporters) 3 finding an alternative that costs less and better serves members. Any suggestions?
Mal answers: Clearly, there's something wrong with your program. But the answer is not to dump it.
First, you need an audit. Somebody with direct marketing experience needs to take a close look at the giving history of your donors and at the segmentation model your staff is using. I'm confident that parts of the program are, indeed, profitable.
Second, I find it hard to believe that you couldn't grow the program through acquisition, if not by direct mail then online. That could be studied in an audit. There's no reason why you shouldn't be doing a lot better than you are.
There are independent direct mail fundraising consultants around who are available to do audits of the sort I'm suggesting. So is Mal Warwick Associates. If you want more information, please contact our CEO, Dan Doyle, at d.doyle@malwarwick.com.
Is brand development a strategy of fundraising and why?
Thank you for answer.
Mal answers: I regard brand development as a strategic tool that underpins all fundraising, marketing, and communications. All the efforts an organization undertakes in any one of these areas can support -- or detract from -- the development of a strong brand. So there is considerable interplay among these concepts.
The linkage between fundraising and brand development becomes obvious if you view the difference in fundraising results enjoyed by an organization with a strong brand compared to those experienced by an organization with a weak one. For example, a letter or phone call from Greenpeace is likely to be paid more attention by the recipient than one from a less-well-known, less-well-established environmental organization. This difference is likely to make itself felt in the results secured by the two organizations.
Does a Foundation like ours lead with the identity of the Foundation or the organization it supports?
First off, I want to thank you for writing "How to Write Successful Fundraising Letters". We followed your recommendations this spring for soliciting high dollar gifts, completely retooled our mail package for the appeal (soliciting gifts of $1,000 or more) and achieved dramatically better results. One donor, whose largest previous annual gift over the past 5 years was $250, wrote a check for $10,000 and sent it in using our BRE!
I have a branding question: I’m trying to develop internal guidelines that explain when to use the Foundation graphic identity in our print/digital materials and when to use the Society graphic identity. For example, in the past we have used the Society name and logo on the outside envelope of invitations to cultivation and fundraising events (even though the Foundation is actually sponsoring it) and various direct mail fundraising packages because supporting the Society’s programs and services are what interest our prospects and donors. If we used the Foundation name and logo, we’re afraid our audience would expect it to be some kind of solicitation and may not open it at all. Thus, the Foundation name and logo are generally only used in print materials once someone has made a gift. There are also obvious situations where both logos have been used side by side, but they are limited. Using this formula, it is very difficult to gain greater visibility for the Foundation itself. I’m sure this has to be an issue many Foundations grapple with. Does a Foundation like ours lead with the identity of the Foundation or the organization it supports? I would really appreciate any guidance you are able to provide.
Mal answers: Thank you for the kind words about my book -- and for the good news about your success with high-dollar direct mail.
Your question is, as you suspect, a fairly common one, since a great many associations and special-interest societies as well as nonprofit advocacy groups operate hybrid organizations that include a foundation as well as some other form of nonprofit entity.
I suspect that the matter isn't nearly as important to your donors as it is to you. For one thing, there are legal aspects of the question that you haven't referred to: you do have to satisfy both the IRS and the U.S. Postal Service that you are correctly identifying the entity on whose behalf you're mailing a solicitation. It's possible you've been doing things wrong for years and have just never been caught! It's also possible, of course, that everything you're doing is strictly by the book and has been confirmed by your attorney. I certainly don't want to venture a legal opinion, since I'm not a lawyer. In fact, most lawyers don't know squat about these matters.
But you probably were hoping for an answer from the perspective of a direct mail fundraiser anyway, not a lawyer or a postal official. Unfortunately, I can't do more than render a guess about whether the use of one logo or another would impact your results. I suspect it wouldn't. This is, of course, the sort of thing you could (theoretically) test. Chances are, though, even if your file is large enough to permit a statistically valid test, the differences you would observe would be essentially too small to measure. At least that's my hunch.
How can I measure the impact of an advertising campaign?
My nonprofit client is launching an advertising campaign to communicate its message to a larger audience. Do you know of a way to quantify the impact of such a campaign on direct mail response rates? Thank you.
Mal answers: The only way I know to reach your objective is to do what mainstream advertisers do: carve out geographical "test markets" and measure the difference between those that are exposed to the broadcast message and those that aren't. However, if your client covers only a single limited geographical area, you can't do that. In such a case, my answer would be no -- with one caveat. You could, of course, simply launch your advertising effort and measure its (presumed) impact over time by looking for improved results year by year. I doubt that would be helpful for you, though. If you can think of some other approach, let me know, please. You'll have my admiration.
Is an annual report effective in fundraising?
We have a high-dollar direct mail program with approximately 5,000 active donors, $100+. Average gift is about $700. How could we calculate the efficacy of doing an annual report? Are they generally valuable as a complement to solicitations, newsletters, and other informational pieces?
Mal answers: This one's easy: the answer is Yes. Depending on the client, we've used annual reports in two different ways: simply as a cultivation device, with no hint of resolicitation (which sometimes yields substantial gifts, anyway); or as the centerpiece of a major solicitation. Both ways have worked well for us.
What's a "successful" response rate for a survey?
How do we determine what a successful response rate to a survey is? We recently sent a survey to 8,000 donors. How many responses do we need to have to consider it a success? Thanks for your help.
Mal answers: Generally speaking, a "survey" isn't really a valid survey unless it's sent to a large enough randomly-selected sample of a list to ensure that the results are statistically meaningful. You'd have to ask a market researcher or statistician to learn what is a "good" return, or, for that matter, what is large enough to be meaningful.
However, it sounds as though what you're mailing isn't a survey in the statistical sense. It's a questionnaire you send to a large portion of your donor file, presumably because you want to get information from them (not dollars). In such a case, response might be all across the board. I've seen the rate range from 10% or so on the low end to as high as 50%. Usually, when I personally have done such mailings, response has been in the range of 20% to 30%.
How does e-mail copy differ from printed direct mail?
I know that people 'read' things differently on the screen than they do with a print letter. How do I write my e-fundraising request to my membership list? Any pointers or suggestions for places to see good letters?
Mal answers: Here are ten of the rules I try to follow when writing an e-mail appeal:
(1) Write the best possible headline -- something that's intriguing and engaging. You'll have only a couple of seconds to grab the recipient's attention -- even less than in direct mail.
(2) Make sure the message is timely and urgent. If it's not, it's all too easy for the reader to delete it.
(3) Pay attention to the name and address of the sender. Ideally, use the name of an individual who's well-known to the recipients. If possible, stay away from confusing-sounding technical or institutional addresses.
(4) Write in an informal, engaging style. Online communication is much less formal than what's written on paper. Keep your sentences short and your language as clear and expressive as possible.
(5) Remember that you can't personalize the ask (i.e., tie it to the individual donor's giving history) unless you have in place either a sophisticated e-mail messaging system tied to your donor database, or the similar capacity to create personalized Web pages on the fly in response to donors who click onto your site. Very, very few nonprofits have this capacity now. So it's important to think through very carefully who you're writing, and why. For example, it would be a mistake to ask a $1,000 donor for a $25 gift online.
(6) Personalize the copy as much as possible. At a minimum, start off with a personal salutation ("Dear Leslie").
(7) Make sure you don't "send" or "copy" the message to a long list of people simultaneously, which could result in the list's appearing in its entirety to every recipient. (This is bad form, and raises hackles.) Use the "blind copy" function.
(8) Keep the copy short, and avoid long, dense paragraphs. White space may be even more important onscreen than it is on paper. If you have a lot of background material on the issue or project about which you're writing, upload it onto your Web site and include a link for readers to check it out.
(9) To accept donations, point the recipient to a dedicated page on your Web site -- one that's devoted exclusively to the current appeal. This will permit you to monitor and track results without fuss, and it will permit you to repeat the appeal's marketing concept on your site.
(10) Make sure you've got the capacity to accept credit card gifts -- the preferred form of payment online. If the scope of your program and your budget allow, arrange for gifts to be transmitted via a secure Web site.
I'm sure some of this is self-evident to you, but I hope it helps. Thanks for writing, and best of luck!
What is the difference between "nonprofit" and "not for profit"?
What is the difference between "nonprofit" and "not for profit?" Do all "not for profit" organizations need a 501c?
Mal answers: Now, for starters, I'm no lawyer. And this is a somewhat complicated question, believe it or not. But here's my non-lawyerly take on the matter:
(1) "Nonprofit" and "not-for-profit" are frequently used interchangeably. However, when I'm feeling especially technical, I might refer to such public interest efforts as political campaign committees as "not-for-profits," whereas I would never call them "nonprofits." I reserve that term for organizations with educational, scientific, cultural, environmental, or human service concerns.
(2) Under the IRS tax code, there is a whole slew of organizations covered in section 501(c). The most numerous are those cited in section 501(c)(3), which includes most of the nation's "nonprofit" organizations. (Over 600,000 of them.) Other sections deal with such not-for-profit enterprises as professional sports teams, industrial or professional trade associations, and so forth.
(3) I believe that religious organizations dedicated to the observance of faith -- churches, synagogues, and mosques, in other words -- are exempted from section 501(c). But those organizations that provide human services or conduct advocacy on current issues from a faith-based perspective are not exempted -- at least, I know of a great many such faith-based groups that are, indeed, organized under section 501(c).
With all that said, if you're starting a nonprofit organization of any type, or if questions have been raised about the legal status of a current nonprofit, I strongly suggest you talk to a qualified attorney to be certain that you're operating within the law. I am not giving you (or anyone else) legal advice by virtue of this e-mail message.
Thanks for writing! Good luck to you.
I have been asked to write a letter to local candidates requesting funds for a cutting edge program that will provide candidates with information and resources from one central location on the web. I have had your book "How to Write Successful Fundraising Letters" in front of me for 3 hours, and I still don't have a letter. Is campaign fundraising different than the examples in your book?
Mal Answers: I've done both political and nonprofit fundraising by mail for years. Many people think there are great differences between the two, but I don't agree. The differences are minor, matters of timing and content more than of form. However, the letter you're writing is NOT a fundraising letter in the sense that I write about. Your task is to persuade candidates to invest in a system that will bring them direct and immediate benefits. It's about investing, not giving. It's a business letter, not a personal letter. Straightforward is probably the best policy.
How is raising money from corporations different from individual fundraising?
I have been able to raise significant funds from personal relationships and one-on-one requests, but I can't figure out how to approach large companies. We are putting together a convention that draws close to 2000 people. Wouldn't large companies love to advertise with us? Why am I finding so many roadblocks? Maybe I just don't know who to call? Or could it be because we are a Jewish/religious organization companies don't want to advertise or sponsor?
Mal answers: Raising money from corporations is a lot different from individual fundraising. First, as you no doubt have figured out, there are at least three potential sources of financial support at any big company:
(1) Corporate philanthropy, generally from the company foundation or a philanthropic fund managed by top executives
(2) Marketing dollars, which are under the control of the marketing department or its equivalent
(3) Gifts from individual executives and other employees
In this case, you seem to be going after marketing dollars. Here, you have to be prepared to furnish a quid pro quo. Any marketing manager will ask "What's in it for me?" You need to be prepared to answer that question. To be more precise, you need to answer the question before it's asked. In other words, to seek corporate marketing money, you'll need to offer well thought-out sponsorship packages that include such things as signage at your events, visibility (perhaps including introductions) at individual sessions, advertising space in the program booklet, inserts among the materials handed out to meeting participants, and perhaps access to the list of attendees as well. All these benefits need to be clearly laid out in printed materials that you can present to interested companies. Set several different levels of sponsorship to give the companies a choice.
It's also important when going for marketing money that you choose your targets carefully. Look for companies that have some specific reason to be interested in the people who attend your conference. Companies that sell to the Jewish community are, of course, a natural choice. I'm sure you can think of many less obvious examples.
In seeking marketing dollars, don't make the mistake of implying that a transaction would be philanthropic (unless the individual circumstances suggest that the marketing people might be motivated by that possibility).
What can you tell me about surveys and telefundraising?
We are preparing a survey to help us evaluate our alumni calling program. Tentatively, our pilot survey would be sent to 250 of the 4,000 prospects in our Fall 2003 calling pool. The main objectives of the pilot survey would be to measure response rates and proportion of positive to negative responses. This would help us determine how large a sample to use of this survey. Some staff members have urged that we consider an in-house calling program that would involve hiring and training our own medical students, whereas others believe that is not feasible and/or might not raise more money. Is there some way to add an unbiased survey question that would help us predict whether our alumni would give more in response to a call from a medical students? My assumption is that if we ask "Would you rather receive a call from a paid medical student, or from a paid caller from a telefunding company?" that would be adding unacceptable bias to the survey.
Mal answers: It's not clear to me exactly what your survey model will be. Do you plan to survey the entire base of 4,000 prospects, with pre-testing of just 250? That's what you seem to imply when you write that this would "help us determine how large a sample to use of this survey."
I'm no statistician, but I suspect that if you set out to call 250 people, you won't be able to reach quickly more than, say, 150-175 of them at most. It would be worthwhile to check in with a survey researcher as to whether such results would be likely to yield statistically viable numbers.
However, your direct question is a lot easier to deal with. You're right, of course, that asking people point-blank whether they prefer to speak with a medical student rather than a professional telemarketer will produce precisely the results you expect. So, I assume you won't do that.
My sense is that well-trained and well-supervised student callers are likely to be more effective than professional telemarketers 90% of the time. I say that despite the fact that I've been involved professionally in telefundraising for two decades. But please note that I emphasize the phrase "well-trained and well-supervised." Telephone fundraising requires a good deal of craft and finesse.
I'm a little skeptical, though, that medical students would have the time to take on jobs like this. Aren't they the crazed, red-eyed folks who typically stumble through 20-hour days at most medical schools throughout the country?
Why do ethics standards not allow for percentage-based fundraising?
I have been questioned by a non-profit organization about the background of the ethics standard which states that fundraising professionals should not be compensated based on a percentage of the funds they raise. I see this rule consistently stated by respectable fundraising professionals, but it appears in conflict with a growing trend, and indeed with the direction this organization seems headed. Can you explain the reasons for it?
Mal answers: I'm not sure why you perceive percentage-based fundraising to be "a growing trend." In fact, it's my impression that this practice, which is widely rejected by fundraising professionals, has been on the decline for many years.
People new to fundraising often find this option attractive. However, I can speak from personal experience that it's a surefire way to create ill will (and possibly even lead to litigation).
When I began, not knowing any better, I agreed to a percentage-based program for a new, high-risk fundraising program. To my delight, the program was an immediate, huge success. Money came pouring in, and I began earning far more for my effort than I was worth. The client began grumbling. It was only because I agreed that my work wasn't worth what I was receiving, and voluntarily reduced my percentage, that the matter was resolved amicably. However, had it gone the other way and not worked out, I would have felt cheated, having put in a great deal of work without adequate compensation.
But that situation directly affected only the nonprofit and the fundraiser. There's a more important player in such matters: the donor. Just try telling a major donor that a sizable percentage of her gift is going directly to the fundraiser — and listen to the howls! Donors hate percentage-based arrangements.
These are among the reasons that the Association of Fundraising Professionals includes within its Code of Ethics a strong prohibition against percentage-based contracts. Fundraisers are professionals, and as such we deserve to be paid a professional wage that reflects the levels of our experience and talent — neither more nor less.
How long do you have to keep copies of checks from donors?
Are there any rules and regulations regarding how many years you have to keep the copies of checks from donors after the checks have been entered into the development database?
Mal answers: I personally don't know the answer to this question. But one of my colleagues checked with her client, the San Francisco AIDS Foundation, and this is what she wrote me:
"According to SFAF's long time Controller Dan Cawley, the IRS does not offer specific rules on this but they do suggest nonprofits retain copies of check donations for 7 years."
That sounds pretty authoritative to me!
A few questions about testing and confidence levels
I have a few questions about mail testing and confidence levels.
Mal answers: Spalding, I asked our Programmer/Analyst, Dan Suzio to respond to your questions.
Question #1: I was reading the chapter in your book, Testing, Testing, 1,2,3 about calculating confidence levels. At the end of the chapter it says, "this chapter addresses only the question of response rate — not average gift, donor acquisition cost, or other factors. Evaluating the statistical relevance of those variables requires other, more complicated, formulas." Where could I find these more complicated formulas?
Dan Suzio answers: A good place to start would be Statistics for Experimenters, by George Box, William Hunter, and J. Stuart Hunter. Chapter 2 of that book is a discussion of how to compare averages, and the formulas that are used. I have to warn you, though, the book is pretty dense — it may cause you to run out and buy a copy of Statistics for Dummies just to review the concepts.
But the most complicated part of evaluating direct mail results involves looking at the overall goals of the program, and finding the right balance of cost, revenue, number of donors, etc. I don't think anyone has a formula for that.
Question #2: Also, I wanted to know generally about testing. If you perform several tests that consistently produce results in which one test cell "wins" but whose differences are not statistically significant, what inferences can be made about what is being tested? How many consecutive tests would be required to be confident that your results are significant, even if they fail the test for statistical significance? If you're testing the same thing on several occasions, is it valid to aggregate results so that you're dealing with a larger sample size?
Dan Suzio Answers: Statistics theory is based on the idea that separate events are independent, and have no effect on each other. In real life, though, the rules are often fuzzy, and you could make a valid argument for combining two or more tests conducted at different times. You would have to think of the "event" as a series of mailings, say over the course of a year, and be very careful to make sure the conditions are identical for each mailing in the series.
You can also look at results that are consistent, but less than "significant," as indicators of trends. If you repeat a test 3 or 4 times with the same results, but with a confidence level of only 85% or so, you'll probably get the same results the next time. But I wouldn't bet the whole program on it — I'd try to repeat the test with a larger quantity.
Question #3: Finally, when you test something, do you test it once (assuming you get statistically valid results on the first try), or do you plan on conducting several tests over a period of time? Someone told me that when he conducts direct mail tests he plans on conducting them over the course of a year or for at least 3 quarters before making inferences. Is that necessary, overkill, or nice to have?
Dan Suzio Answers: Repeating a test 3 or 4 times would definitely give me more confidence in the results! But unfortunately, I suspect most mailers would consider it an unnecessary luxury.
Here at Mal Warwick & Associates, we'll often mail the same test twice, but generally only for a client that mails in larger quantities and can absorb the added costs of testing several packages at once. For most of our clients, limited budgets and relatively small quantities mean we need to read results quickly and move on.
Is it better to devote fundraising resources to "trinkets" or to results?
You are kidding me with that Thanks for All the Stuff article by The Phantom Donor, RIGHT? Now, maybe this is just because I happen to be a minimalist, an environmentalist, a development director who works on a shoestring budget, and, most importantly, a donor, but I really took offense to the suggestions of that article. Why would we want to waste resources on ridiculous little trinkets that just become trash?
Mal answers: Apparently, the sense of humor of my friend, The Phantom Donor, is difficult to penetrate. Your first instinct — that this was a humorous piece — was, indeed, correct.
Now, I don't mean for a second that the information reported in the article was inaccurate in any way. Woefully, it's not. All that "stuff" was real.
I share your discomfort with this phenomenon. It ticks me off as much as it does you. In my case, however, the annoyance comes from my conviction that an abundance of premiums of the sort described in this article leads donors to a transactional frame of mind, not a philanthropic mindset. I don't think of myself as a marketer, selling "stuff" — but as a fundraiser, building relationships with donors.
With all that said, however, you'll no doubt be disappointed to learn that there are perfectly good reasons why these successful nonprofit organizations mail so much junk. Your donor survey turned up the answer that donors almost always give: "We don't want the stuff!" In reality, however, donors prove over and over again — by responding to mailings like these — that they DO want the stuff. What people say, and what they do, are often two very different things. Premiums such as these lift response rates, sometimes dramatically. Premiums have accounted for the growth of many — an overwhelming majority, I'd guess — of the largest direct mail donor files in the U.S. — including those of environmental organizations. Some would say, especially environmental organizations.
Many of us argue that premiums may lift response in donor acquisition mailings but predispose donors not to renew their support unless they're given similar premiums again. Some nonprofit organizations have studied this phenomenon and concluded exactly that. However, sad to say (from my perspective, and yours), many premium-based direct mail programs have concluded precisely the opposite — that response rates, and donor loyalty in general, are little different between donors acquired with premiums and those acquired without them. In fairness, my colleagues here at Mal Warwick & Associates have recently found that to be the case in working with two of our clients.
Nonetheless, I routinely give most of my clients exactly the same advice you're urging — to minimize the use of premiums and limit them to mission-appropriate items. The numbers notwithstanding, I can't believe that glitzy premiums encourage people to become philanthropic donors, perhaps even major donors or legacy donors — and, as far as I'm concerned, that's the fundamental purpose of direct mail.
Is it possible to project how much diversified funding sources will increase each year?
How much can we reasonably expect contributed income to increase each year? We're working on a new long-term plan, and our operating budget is just about to level out after a few straight years of significant increases. Assuming that everything else stays the same (personnel resources, monetary resources, economy, etc.), what figure can we reasonably plan for?
Mal answers: I'll forego the opportunity to question why the American economy requires every enterprise to grow every single year. Constant growth isn't necessarily either wise or necessary.
But I'll take for granted that the Tacoma Art Museum needs to increase its budget year-to-year (and to an extent greater than the rate of inflation, as you seem to imply). And I'll assume that your sources of revenue are similar to those of most art museums — a mix of membership dues, entrance fees, corporate sponsorships, major individual gifts, and — perhaps, depending on how long you've been around and how doggedly you've pursued them — legacy gifts.
In a situation such as that, with a diversified mix of funding sources, the only reasonable guide to an organization's rate of income growth seems to be your past experience — unless you introduce some significant change into the picture. In other words, if I were you, I wouldn't expect any significant growth if all things stay the same, as you posit.
The implication of this assumption is that, if you truly want to grow, you'll need to do something different. The options include (a) intensive legacy marketing, (b) aggressive new-member acquisition, (c) an ambitious donor-upgrade program to identify, cultivate, and solicit new major donors, or (d) a dramatic new initiative to attract more and bigger corporate sponsors, perhaps around high-profile new exhibits. There may be other options, of course. But I think it would take something like that to enable you to project meaningful growth in the years ahead if everything else stays the same — since your income has reached a plateau.
In any case, none of the options I've cited would be likely to lead immediately to significant revenue increases. In all cases, I'd think you'd have to expect shallow short-term increases, at best, with the real payoff to come several years or more down the line.
Can a foundation accept credit card gifts on its web site?
Is it legal and ethical to allow visitors to our website to make a donation to our foundation and provide for credit card donation? Are there other hospitals that do this? Thanks!
Mal answers: I can't speak to your second question, about whether other hospitals feature online giving opportunities -- but I would be very surprised if some didn't. This option for donors is becoming increasingly common -- and successful -- for nonprofits of many different types and sizes. While I wouldn't predict that you would reap major rewards in the short run, offering that option to your donors could be perceived as a service. Just one word of caution: be sure to arrange for a secure server.
Lots of luck, and thanks for writing!
How can I verify old names and addresses?
We have recently added some "lost" donors into our database. These were folks who supported a major capital campaign in 1985. We tried to clean up addresses as best as we could but the best we could do is go back 5 years. I want to verify that these are the same people who donated in the 1985 campaign. I have put together a postcard that I will send to them to verify their info. Do you have some thoughts about how to word this request?
Mal answers: I suggest you simply send a polite postcard spelling out the truth. Something along the following lines: "We've lost track of you, but we're hoping to get back in touch to bring you up to date about the [extraordinary developments?] here at the MCBC Foundation during recent years. We'll be writing you again very soon."
Now here's why that works: The post card will not be delivered if the address is bad. If you print on the address side of the card "Return Service Requested -- Forwarding Postage Guaranteed," which I believe is the latest USPS wording for "Address Correction Requested," and if the postal service has the current address, they'll notify you AND forward the card to the addressee.
Honesty is (almost) always the best policy! Good luck, and thanks for writing!
Can a "non-event" be effective as a fundraiser?
What do you think of the fundraisers inviting members to a "Non-Event"? Are they effective, or simply hokey?
Mal answers: Good question! Unfortunately, I don't have anything more than an opinion as an answer, since I have only anecdotal (and conflicting) reports about whether this technique works. I think this may be a clever and successful gimmick for a local or regional organization that already stages special events -- especially those that hold lots of them and may be tiring their donors. I wouldn't suggest trying it for either an organization that never has or is unlikely to hold an event, and I certainly wouldn't do it for a nationwide organization. There you have my opinion!
What's the best way to announce a merger?
We're a small organization, planning to merge with a larger nonprofit. The final decision about the merger will be made just before our annual appeal is scheduled to drop. Is there any reason why we should NOT include a concise announcement about the merger in our annual appeal letter that we send to our current donors and SYBUNTS and LYBUNTS?
Mal answers: If your donors are like those of other nonprofits with which I've worked over the years, it's going to take them some time to get used to the fact that you've merged. You'll need a whole lot more than a mention or two in an appeal mailing to get the point across.
In fact, I suggest that, if the details of the merger are indeed final, you send a special, upbeat letter to all your supporters announcing the merger, spelling out its many benefits for your organization — and not asking for funds. Then, in your year-end appeal, mention it again. And again in each subsequent appeal for the next year.
If there's not enough time to send such a letter before your year-end appeal, then I suggest you skip any mention of the merger in the appeal and send an explanatory letter in January.
How can we remind donors of a merger or name change?
I recently commenced working for one of the oldest charities in my area that merged with another charity 18 months ago and changed their name. The problem is that many people still do not know who this 'new' charity is or still refer to it by the old name.
As well as continuing to mention the merger in direct mail appeal letters, I am considering including an insert like a bookmark to further promote our organisation. Do you think a bookmark will work or do you have another suggestion for an insert that is cost effective? What do you suggest should be included on the bookmark? What wording should I be using regarding the merger, bearing in mind that it was nearly two years ago.
Mal answers: Your idea of producing a bookmark seems right on target to me — but I think it's only part of the solution.
It's not unusual for people to continue referring to a charity by its old, pre-merger name, and if that's the extent of the problem, it's not a very big one. However, if many people still don't recognize the organization when they hear the new name, you've got a real problem — a PR and marketing problem.
Organizations that successfully go through name changes typically maintain both names in all marketing materials for a considerable period of time. (For example, "Save the Human Race, formerly People for People.") I can't tell from what you write whether your predecessors did that. If not, you may need to work with your marketing department, if any, to promote more public visibility for the new name.
In other words, inserts like bookmarks may be a part of the solution. But they're only a beginning.
What can I do about an incompetent boss?
Putting conspiracy theories aside, what do you suggest I do as development director of a third level institution with a president who witholds information, does not have a paper trail for exisiting gifts and pledges, refuses to allow the development office to correspond with donors or acknowledge gifts, does not follow any strategic relationship building with donors and, I think, used restricted donor money for unapproved uses? By the way, I do think the CIA killed JFK. Help!!
Mal answers: Get a new job.
What should I know about fundraising in Spain?
1) In your opinion, what are the main differences between the North American and the European (Spanish) market for nonprofits fundraising?
2) Could you recomand us a fundraising consultant in Spain?
Thank you for your answer.
Mal answers: I don't feel fully qualified to answer your first question. I'm familiar with the nonprofit market in Europe, but only superficially, and I haven't yet visited Spain. All I can do is cite a few characteristics of the charity fundraising market in the United States that I believe are not fully shared in Europe:
** The U.S. nonprofit market is truly saturated, with conflicting appeals from tens of thousands of active, aggressive fundraisers competing in every conceivable communications channel. People in Europe tell me that the Continent is also saturated, but I'm convinced that competition is not nearly so intense there.
** The privacy movement hasn't penetrated as deeply into the public consciousness here in the United States as I understand it has in much of Europe. As direct mail fundraisers, there are few restrictions on our use of mailing lists. I know that in Germany, for example, and in at least some other EU countries, privacy laws dramatically limit fundraisers.
** The people of the United States have a long, proud tradition of generosity to support nonprofit causes and institutions. Three out of every four Americans gives to charity each year. Together, we contribute more than 200 thousand million dollars per year ($200 billion). I'm led to believe that the philanthropic tradition is not so well established in Europe.
** The U.S. government does not accept responsibility for providing society with adequate health care or social services or for supporting the arts, and much of higher education here is privately operated. Thus, a majority of the money raised in the United States by nonprofits goes to colleges and universities (including many publicly-owned but underfunded ones!); hospitals and other healthcare organizations; and museums and performing arts companies. I'm told that your nonprofit market in Europe is more narrowly defined.
Those, I believe, are the biggest differences.
As for recommendation you request, I have to say I know only two fundraising consultants in Spain well enough to mention their names to you. One is Ricard Valles (I hope I've spelled his name right); he runs a fundraising consultancy in Barcelona. The other is Daryl Upsall in Madrid. Daryl was for years the director of fundraising for Greenpeace International. His email is daryl@darylupsall.com. I'm sorry, but I don't have Ricard's address.
How can a client of our organization ask for a gift?
After reviewing your cardinal rules of writing fundraising letters, I still have a question. In the past we have been successful asking for a specific amount in the appeal letter. Will this still work if the letter is from a parent telling about her child's experience rather than from the executive director?
Mal answers: Interesting question — but a problem that's easily solved. In such circumstances, I recommend that you include either a note or a short letter from the executive director referring to the main letter but making the Ask directly. I also strongly recommend that you ask the parent (or other beneficiary) to include at least a general plea for funds to make it possible for other children to benefit, too.
What's the difference between a membership and an annual fund?
I have a two fold question. How you go about separating membership and annual fund in the mind of the donor? How many times should you solicit members each year for funds that are in addition to their membership donation (i.e. for annual fund)?
Mal answers: I suspect that the difficulty your donors have in distinguishing your membership program from your annual fund is the same problem I've got: they're not really different.
To my mind, a membership structure is merely a formalization of the annual fund concept — a device that exists to elicit annual support from donors, layered over (sometimes) with additional benefits and a sense of obligation to continue paying dues year after year. When I work with a nonprofit that has in place a membership program, I never refer to the "annual fund." Instead, I craft additional solicitations around special issues, projects, or holidays and refer to "special gifts." It's no wonder, then, that I call such solicitations "special appeals."
The number of such special appeals I advise sending members depends on a number of factors, but chiefly these two:
(a) how quickly the member has renewed her annual support. If she responds to the first membership renewal notice, then she is eligible to be included in a special appeal rather soon afterwards. If it requires three, four, or more renewal notices to secure her membership gift, then she will receive fewer special appeals.
(b) the donor's own giving history and preferences. If she responds to appeals frequently — i.e., several times a year — I take this as a sign that she welcomes frequent solicitations, and I might thus send her half a dozen or more in the course of a year in addition to her membership renewal notice. If she demonstrates the habit of responding only once annually, I take the hint and send her fewer appeals. However, I also send fewer appeals to donors whose gifts are very small. With gifts under, say, $15, it might not be cost-effective to mail appeals (unless the response rate is inordinately high).
How do I raise money for separate but affiliated organizations?
We are a national network of 38 technology resource centers. Each center is a nonprofit in its own right and completely autonomous with its own brand and name. We do not want to conflict with our centers' fundraising efforts but at the same time, need to build our base of support. How would you suggest I build our donor/membership? Thank you.
Mal answers: Thank you for the challenging question!
By way of response, I need to ask you a number of questions:
• By what means do your constituent centers raise money? For example, if many of them use direct mail, that may not be the best route for you — unless you could offer economies of scale in integrating their programs into a national effort.
• Who contributes to your work now? Does much of your funding come from government, corporations, and foundations, and little of it from individuals? If so, a fundraising program based on gifts from individuals might be in order, so long as there is reason to believe that individual donors would respond favorably to appeals.
• Are there such reasons? For example, have a few centers successfully launched local or regional individual fundraising programs?
• Who are the likely donors to a nationwide campaign? And what might be the economies of scale or other advantages that you might bring to the table to counterbalance the advantage of intimacy and direct contact with beneficiaries that your individual centers enjoy? Depending on who those likely donors may be, you might consider any one of several channels to distribute your appeals: direct mail, telemarketing, events, or email.
In other words, there's no silver bullet in sight.
Best of luck!
What's the difference between Prospect Identification and List Research?
Do you have any articles on Prospect Identification?
Mal answers: There are two ways to interpret your question.
"Prospect Identification" in the classical sense connotes the selection of individual prospects for major gifts. If that's what you mean, I can't help you.
However, some fundraisers also refer to this activity as meaning the selection of mailing lists for a donor- or member-acquisition campaign conducted by mail. It's called, more properly, "list research." If that's what you mean, I'm sure there's something on our site that addresses it.
Thanks for writing, and best of luck!
Is our lapse ratio unusually high?
Hi, Mal. Would you please answer this question for one of our members? It will be published in NONPROFIT WORLD's "Ask the Experts" Dept. with full credit to you and your firm.
I would like to ask ONE BIG QUESTION: It concerns our membership and its lack of growth—ever since 9/11. Our membership varies between 1,950 and 2,100. The members who have been with us the longest, stay. The ones who have been with us for 1-2 years are the ones who leave. Our lapse ratio runs anywhere from 30-45%. To me that's high. In fact, our prospect list (people who have inquired of us or people who are lapsed members) is almost the same number as our membership list. Our dues are just $20 per year and we offer solid member benefits, including a newsmagazine. We started up in April 1998, and had phenomenal growth until 9/11 and then....nothing. We are in a narrow, small marketing area. There are very few of us in this field so there's not much competition. That's why this hurts. Anything you can do to help would be appreciated.
Mal answers: What we have here is a classical case of donor attrition. There's nothing unusual about the circumstances described here. Unfortunately, this is a description of reality.
It's common for newly-recruited members to lapse much more readily than those who've been around for while. Nowadays, in most national direct mail fundraising programs, first-year renewal rates of 25-35% are not uncommon. Many consider them the rule.
Renewal rates tend to improve in the second and subsequent years, often trending upward from 50% in the second year to 70%, 80%, or even 90% after many years of membership. Overall renewal rates are normally in the range of 60-75%.
However, it's important not just to recognize the problem but to do something about it! This is where it's well worthwhile understanding the concept of "relationship fundraising" — and putting it into practice.
All fundraisers pay lip service to the truism that fundraising is about building strong relationships with donors. Many fewer actually practice it on a day-to-day basis. That's what's required to reduce donor attrition and to make the most of your investment in donor acquisition and donor cultivation.
In a nutshell, what this means is that you must not just provide membership benefits. You must also continue to reinforce the passion that led your donors to join in the first place. You must thank them promptly and warmly for every gift. You must solicit their preferences about such things as whether they want you to contact them by phone, how many times per year they want you to write them, whether or not they want to receive your newsletter, whether or not they will allow you to exchange or rent their names — and you must act on this information. You must also offer them opportunities to get involved in your work, if they wish.
When donors feel well cared for, they are much more likely to renew their support from year to year — and to increase it from time to time as well.
Is telefundraising dead?Is telefunding dead? With the no-call lists, people who register for that, don't care if your organization is not for profit, etc.? Is there a ballpark figure to use to estimate the number of leads it might take to generate a specific dollar amount? For example: If we've budgeted to raise $80K via telefunding efforts, approximately how many leads will they need? I know there are a ton of variables, but there must be some half-logical process to consider.
Mal answers: Telefundraising is indeed alive and well, despite all the current hoo-haw about the do-not-call list. However, most reputable firms don't call "leads" — they call only current donors or members. Telemarketing isn't widely used as a prospecting device by nonprofits — and it's likely to be used even less as time goes on.
The formula you're requesting is a bit more complicated than you intimate. I've recently written on this subject for the forthcoming revised and updated version of my book, Revolution in the Mailbox (which will be out from Jossey-Bass in January 2004). I excerpted some of that material for publication in the September issue of my print newsletter, due out just after Labor Day.
Please discuss the usefulness of telemarketing fundraising compared to direct mail.
Mal answers: Please don't make the mistake of looking at direct mail and telemarketing as an either-or proposition. They both work much better in combination.
Telemarketing has many wonderful specialized uses, primarily when combined with mail. For example, direct mail can recruit one-off donors, while the telephone will have greater success converting them into monthly givers. Any well-developed donor development program ought to make ample use of both channels.
Good luck!
Can you provide some information about donor solicitation in quarterly newsletters vs. direct mail packages?
Can you give me some current statistics or information about donor solicitation in quarterly newsletters vs. direct mail packages?
Mal answers: Unfortunately, the straight answer is no. I've observed direct mail fundraising programs in which a quarterly (or bimonthly) newsletter was the centerpiece, pulling significant response rates and yielding the lion's share of the revenue. More frequently, I've seen programs in which a newsletter breaks even or yields a modest profit. And I've seen others which fell in-between.
The ultimate answer to your question, then, is my Universal Law of Fundraising: It depends.
Which business spends the most money on direct marketing in the world?
My question isn't so much a NFP question but a broader direct marketing question (that our librarians haven't been able to answer). Do you know what is/or is perceived to be the business that spends the most money on direct marketing in the world?
Mal answers: I don't know the answer to this question. However, a company called Advo (which distributes co-op or "ride-along" coupon mailings every week) claims to be the biggest mailer in the U.S.
The Direct Marketing Association, based in New York, publishes an annual Statistical Fact Book that contains more information about direct marketing than you ever wanted (or would want) to know. That would be a start.
How can I get a copy of Type & Layout?
I was wondering if you could advise me on how I may get a copy of Colin Wheildon's Type & Layout.
Mal answers: Unfortunately, Type & Layout has been out of print for many years. I made several efforts to secure an arrangement with a publisher to reprint the book, but without success. Most recently, Colin Wheildon has advised me that an Australian publisher is interested in bringing out a new edition. But I haven't heard anything more than that.
How much of a return can a nonprofit expect from a BRE enclosed with a newsletter versus the cost of printing it and including it in the mailing?
We are a private, nonprofit agency that sends out a quarterly newsletter to about 5,000 individuals and businesses. The newsletter gives an update on the agency's work with abused and molested children in our community, and also promotes upcoming fund raising events. We are trying to decide if we should go to the extra expense of including a donation return envelope in our newsletter. Are you aware of any research that shows how much of a return nonprofits can expect from an envelope enclosed with a newsletter versus how much they spent on printing and including it in the mailing? I get newsletters all the time that have these, and while I personally respond to some, I have always wondered what the rate of return on the expense of including one with the newsletter actually is.
Mal answers: You won't catch me predicting a specific rate of return, because that depends on such a long list of variable factors that it's impossible to say with any certainty what you might expect. However, I can assure you that the reason the practice is so widespread is that it works. Some nonprofits find that their newsletters yield a major share of their contributions from individual donors; others find that just a trickle of gifts comes in. Most commonly, though, in my experience, the gifts generated cover most or all of the cost of printing the newsletter (not just the cost of the donation envelope!).
Is a donor less likely to respond generously to a specific fundraising request mailing if he or she recently sent a smaller donation using a BRE that came in a newsletter?
If we are pushing a major fundraising event in our newsletter (for example, at Christmas we push our Holiday Tribute Program), then we would prefer that those who receive the newsletter respond generously to that program rather than putting in a $20 or $10 check in a return envelope. Is there any research on whether or not a donor is less likely to respond generously to a particular fund raising request, such as our Holiday Tribute Program, if it will have its own separate mailing and return envelope, and if he or she has recently responded with a smaller donation using a return envelope that came in a newsletter?
Mal answers: It's difficult to answer this question in the abstract, partly because I don't know the timing of the two mailings you describe. However, there are two points I'll make: (a) it's important to send a solo mailing to promote the Holiday Tribute Program, not just to include a promotion in the newsletter; and (b) if that program is really such a big element in your fundraising program, I suggest you also enclose a promotion for that program in the newsletter — ideally, what you call a "donation envelope" written and designed specifically for that program.
How does religious fundraising differ from other charitable fundraising?
I want to ask you about the differences between "traditional" fundraising — save the whales, feed the children type charities — and religious nonprofit fundraising. Do all your tips work exactly the same?
1) We fundraise, but we also teach about tithing, and many of our regular donors are actually tithing. We mail out initial thank-yous to every new donor and we send out quarterly thank-you gifts. Shouldn't this suffice?
2) While it is often imperative in traditional fundraising to say where the money is going, religious nonprofits are somewhat different. The law does not require them to say where the funds go. Since we teach a lot about tithing, many higher-ups in our organization don't want to tell people where the money goes. (This is often disputed hotly within our organization). I am ambiguous. On the one hand I feel like telling people would inspire more donations; on the other hand, when I belonged to a church I would never have dreamed of asking where my tithes were going. What is your take on this?
Mal answers: It's difficult for me to draw the same distinction between "traditional" fundraising and religious fundraising, since the latter preceded the former in human history by several millennia! But I get the drift of your question nonetheless.
All the research I've seen makes it clear that the philanthropic motives that underlie giving to nonprofits bear many similarities from one field to another. In fact, spiritual or religious motivation is responsible for a great deal of charitable giving worldwide — not just to religious institutions but to nonprofits in general.
The research also shows that donors of all sorts crave both appreciation and information -- the faster, the warmer, and the more complete, the better. In focus groups and interviews, donors' biggest complaint tends to be that they don't receive information about how their gifts are used. I suggest you turn to Penelope Burk's book, Donor-Centered Fundraising, for a first-hand look at some of these research results.
And, by the way, the tithing you talk about isn't limited to religious nonprofits. Not many nonprofits ask for a tenth of their members' or donors' income, but many — in fact, viewed globally, most — nonprofits ask for giving on a continuous basis, usually monthly.
Can you provide recent statistics on direct mail response?
Can you provide any new statistics, from the last couple of years, on rates of direct mail response from existing donors?
Mal answers: I know of no organization or publication that even attempts to track nationwide, cross-sector rates of direct mail response on a continuing basis, so the most direct answer to your question is No. However, there are two other ways to answer the question. I'll use both.
(1) Every year without fail, I hear industry scuttlebutt about how "our results were down sharply this spring, but they're coming back now" and how "our results are going through the roof." Naturally, I hear both these sorts of statement within days of each other. In other words, there's no such thing as a meaningful average in direct mail. What you hear on the grapevine is likely to be misleading. In any case, it's not helpful.
(2) In the half century and more since direct mail fundraising came into wide use in the United States, the long-term trend in response rates has been going down. From the 1950s to the 2000s, "typical" rates of response in donor acquisition mailings have dropped by two-thirds or more. This is largely the result of ever-increasing competition. So, whether returns this year are a little better than last year, or a little worse — or even a lot better or worse — is less important than the likelihood that the cost-effectiveness of direct mail is in a long-term decline. (Is this reason for panic? Not in the least. But it's a topic I don't have time or space to address right now. Stay tuned to www.malwarwick.com for new commentary on this trend.)
Can you help me with direct mail strategy in the university environment?
Working for a college within a university, my main job is to involve & solicit alumni. I'm fairly new to development, and I'm working on a direct mail strategy for the next fiscal year (04/05). As our alumni list is only about 1500 people, I cannot sufficiently do test mailings. How often should I send them mail solicitations? Should I send multiple resolicitations in one year focusing on one main fundraising goal, or send separate different solicitations, each with a different focus and goal? And, the University Annual Fund also makes mail appeals, how should this affect my fundraising strategy?
Mal answers: I don't envy you. Direct mail fundraising in the university environment — especially at a large institution — can be a frustrating experience. I hope that the people at Riverside at least talk to one another. If so, my first suggestion would be that you ask the University Annual Fund for a mailing schedule, so you can work around it in scheduling your own appeals.
Learning how many other University communications are being mailed to your donors, and when, will also help you determine how frequently to solicit your own donors. For example, if the University Annual Fund focuses on a year-end campaign, you might choose to avoid that time and instead set up a campaign for either the early fall or the spring. In any case, I suspect that you would be wise to limit the number of your mailings to at most three per year. Surely, the University Annual Fund is mailing more frequently than that.
In mailing to engineering alumni, you have one advantage: you can mail about topics that matter to engineers. In my experience, though, all other things being equal, scholarship solicitations work best in alumni mailings of all sorts. But yours can be for an engineering scholarship fund.
What's more important: quality or quantity?
Our direct mail agency is very focused on renewal mailing to as big a group as possible, whereas we wish greater attention to the quality of the names. (There's no point mailing to someone four times a year if they only ever respond in December.) While we could do some cost/benefit analysis, long-term testing would be the only way to definitively answer the question. Is there some general wisdom on this topic? Does the cumulative messaging impact outweigh the potential annoyance factor?
Mal answers: The greatest virtue of direct mail is that it can be carefully targeted — which is why I side with you on this question. Within limits, quality trumps quantity.
Certainly, long-term testing and tracking is necessary to arrive at rigorous answers. And the number of donors on your file makes a difference, too. But, all other things being equal, it rarely makes sense to continue sending donor renewal mailings to the same group of unresponsive donors, year after year. By the third year, at a minimum, it should be more cost-effective to send specially-tailored donor reactivation mailings to completely unresponsive donors. Similarly, if a donor has contributed two years in a row at year-end but at no other time during the year, it's probably sensible to solicit that donor only through a year-end mailing, thus lowering your costs and cutting back on mailings that might be annoying to the donor.
OK, now I can wait for a complaint from your consultant . . . .
What can you tell me about direct response television campaigns?
We are looking at undertaking a direct response television campaign to obtain monthly givers. I am looking for some information from US/UK about its success/failure etc, as it is not a widely used medium for charities in Australia.
Mal answers: DRTV isn't widely used by charities in the United States, either. Those nonprofits that have found it productive to use DRTV on a continuing basis are, for the most part, either child sponsorship organizations or religious organizations. Others have tried — some of them many times — but with limited success, for the most part. One reason for this is that monthly giving is not as widely accepted in the USA as it is in, say, Canada. And only monthly giving (with its elevated long-term donor value) can make DRTV pay, since the donor acquisition cost on television is so very high.
You might have more luck checking in with folks in Canada, where I believe the technique is more widely employed than it is here. I don't know about the situation in the UK.
Is it advisable to place an insert in a utility bill?
Have you had any experience with the effectiveness of inserts or requests for donations included in routine mailings, such as utility bills, etc.? For example, you can choose to donate money on your federal income tax return. How many choose to do so? What is the percent of people approached in that way who actually contribute?
Mal answers: I don't know what percentage of people choose the check-off option on Federal Income Tax returns. All I know is that it doesn't yield enough money to cover the intended purpose: financing Presidential elections. However, I don't think that's any indication of the likelihood that utility ratepayers will respond to an insert in a utility bill. The elections checkoff is actually on the tax return. Your inserts will be entirely separate from the utility bills — unless you've achieved a measure of cooperation from the utility that I find unlikely.
I've had no direct experience in this area, but I've spoken with others who have done so. Reports are that response rates are uniformly low — a small fraction of one percent. Since I don't recall any specific numbers, that's all I can tell you.
There's only one set of circumstances in which I believe it would be unquestionably wise for you to use this method of outreach: if the utility pays to print your insert as well as to stuff and mail it. That would eliminate virtually all risk from the equation.
How does a direct mail appeal differ from corporate fundraising?
I need to raise a large sum of money for the purchase of a piece of equipment. I have prepared a letter for a mass mailer, but I'm not confident that the donations resulting from the mailer will enable us to make the purchase. We're a small foundation with a limited donor base. Is it possible to adapt my initial letter addressed to individuals to be sent out to local companies and corporations (cold calls)? What are the fundamental differences in the approach?
Mal answers: It looks to me as though you've got your work cut out for you.
With a small donor base — even in the absence of numbers that tell me how small — I strongly suspect you're right that a direct mail appeal would be unlikely to produce the kind of money you need to purchase a piece of sophisticated medical equipment at today's prices. (I assume it's in the hundreds of thousands of dollars.)
However, a direct mail letter is not a promising route to riches in corporate fundraising, either. Letters can be useful as an adjunct to corporate fundraising. But there's no substitute for the sort of careful, step-by-step relationship-building that's necessary with just about any donor you hope to ask for a large sum of money.
In any case, I would advise you to look on this project as a fundraising campaign. Construct a gift table, working down from one to three lead gifts that would contribute at least 20% of the goal (and, with luck, even more). Yours is a challenge in major donor fundraising, not direct mail.
Sorry to be the bearer of ill tidings.
Is it better to test on an acquisition mailing or to existing donors?
When testing a direct mail piece, is it better to test on an acquisition mailing or on your current donors? —
Mal answers: That depends on what you want to test! Also, and more to the point, you can't easily transfer what you learn from testing in a mailing to your donors to your acquisition program.
In testing mailings to your existing donors, for example, you might want to determine whether you would depress response by using a courtesy reply envelope (one that's merely self-addressed) versus a Business Reply Envelope. You might well find, in a test, that the answer is no.
It's possible that an answer to the same question in an acquisition mailing would be the same. However, it might be different. There's no way to know — without running the same test.
As a general rule, given that mailings to in-house donor files are generally much smaller than those to acquisition lists, most testing is conducted in the course of acquisition. But that needn't be the case.
Remember: there's no magic number of names to test. Statistical validity depends on the number of responses, not the number of names mailed (though as the number mailed goes down, the relative number of responses you need goes up).
How do you define e-philanthropy?
In thinking about e-philanthropy and our e-philanthropy strategy, I was wondering how others might define e-philanthropy? For example, is e-philanthropy only on-line giving? Is it e-newsletters, Web site? How would you specifically define e-philanthropy? Is it really any different than "normal" philanthropy?
Mal answers: The term "e-philanthropy" is a misnomer, in my opinion. Unfortunately, it's been promoted by the self-styled "E-philanthropy Foundation" and seems to have been broadly accepted.
After all, we don't equate fundraising with philanthropy when it's not online! We understand that fundraising is merely a process that we use in order to stimulate philanthropy.
Now that I have that off my chest, I can address the question you really asked me! Just as the act of giving is only one aspect of the fundraising process generally, the act of giving online is only one aspect of online fundraising, or "e-philanthropy." Newsletters, Web sites, and all the other elements that enter into an online fundraising strategy need to be taken into account.
That's my opinion.
Does "success" sell better than "duress"?
Any tips on sending an appeal letter for general operating capital that conveys urgency without conveying duress? We thought we'd be able to get government funding but it's tied up in a moratorium. My board wants to do a 2-page appeal letter that conveys urgency, but I've always heard that donors contribute to success not duress. We don't have a new project but need to beef up donations to keep the current one going.
Mal answers: What you've always heard is, with precious few exceptions, the absolute truth: "success" sells better than "duress." Much better. This is easily understandable if you probe the motivations that lead donors to give philanthropic gifts in the first place: from one perspective or another, they want to accomplish something. An organization on the ropes isn't a great vehicle for accomplishment.
So, you and your board are on the right track in that sense. However, deciding arbitrarily that you should send a two-page letter is a mistake. A fundraising appeal needs to be as long as is required to state the case for giving. Two pages may or may not be sufficient. And in this case, I think it's highly unlikely that two pages would suffice. (I'm sure some will say "no one will read anything longer," but real-world experience proves that's not true.)
In fact, in your circumstances, I'd be inclined to write a long letter, laying out in the most passionate and visionary language you can muster, the future you envision that's possible as a result of your work over the long term. I wouldn't ask just for one-time gifts: I'd implore people to invest in your vision, either by committing to a generous, multi-year gift, or by signing up for a significant annual contribution. Draw your donors' eyes to the possibilities the future holds. That, I believe, is your best bet.
How do I get clients as a freelance writer?
Mal, I am a thoroughly competent freelance writer. Recently I have been studying your excellent book How To Write Successful Fundraising Letters and writing practice letters for causes that turned me on. Now I need clients. What should I say in a letter to an organization I would like to write for, and what should I send to demonstrate my competence? Could I, for example, show Audubon my Audubon practice letter if I was frank about what it was?
Mal answers: Interesting idea! However, I suspect you'd be better off starting locally rather than going to the top. The Audubon Society, after all, is a large nationwide organization with a top-flight direct mail fundraising program. Your chances of getting in the door there are probably slim, unless you have a personal contact. But that might not be the case at your nearest local Audubon chapter — or a local chapter of some other national charity. Often, chapters do their own fundraising locally, sometimes by mail. Their efforts are usually limited in scope. You might volunteer your services at several such organizations. One or another might click.
What are the best contract terms for an engagement with a writer?
I am on the board of a local food bank. We are planning a capital campaign supported by direct mail. What are the best contract terms for an engagement with a writer? Hourly? Daily? Or a flat overall fee? I am most comfortable with the third approach, but the scope of the job is still somewhat open-ended.
Mal answers: In my experience, all three approaches to payment terms are in use. However, I'm most familiar — and most comfortable — with a flat overall fee for each project. This is an advantage to the client because it caps the total payment. However, it also puts the burden on you not to overburden the writer by either lack of clarity in your messaging (much less by changing your minds in mid-stream) or by insisting on multiple rounds of rewrites and changes. You should reach an understanding with the writer about what is expected of each of you.
Is there much difference between urban and suburban direct mail?
Some questions: 1) do suburbanites respond differently than urbanites (in general)? If yes, how so? 2) As affluent suburbs, where the hunger is hidden, does our work change to include a larger amount of education/awareness? 3) Is it about locality? As in, our physical site is too far from where/who we are soliciting?
Mal answers: Many people believe that demographics and psychographics dramatically influence giving behavior, and why not? Those forces certainly determine voting behavior, don't they?
As a consequence, I strongly suspect that your thinking about a targeted approach in the suburban area that is distinct from the one you pursue in the urban area is on the right track. However, I can't be dogmatic about this, because I know that the market often is full of surprises. The only way to craft your approach with assurance is to conduct marketing research in the suburbs. This could be as elaborate as hiring a marketing research firm to conduct a series of formal focus groups and mall intercepts, perhaps accompanied by followup telephone interviews, to attempt to gain insight into the attitudes that will govern giving for your food bank. Or it could be as simple and informal as your conducting face-to-face "focus groups" with some of your own donors in that area, perhaps combined with focus groups there of people who have not already given to you. In any case, I would recommend that you do at least a little poking around in the area rather than just arbitrarily cook up a creative approach that you think will work.
Have there been any studies done on urban vs. suburban direct mail soliciting?
Mal answers: I know that some big mailers make such measurements from time to time. But I doubt that there has been any overall study of the question. In any case, I don't think it would be of much value to individual mailers. The applicability would depend on the demographic profile of the donors for a given organization.
What's the standard practice for counting the members of an organization?
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? If not, what is acceptable — or standard practice?
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.
Most of the organizations with which I'm personally familiar tend to count all those members who have paid dues within the past two or three years. Given typical attrition rates, that significantly swells the membership numbers. Counting those who are more than three years in arrears seems disingenuous, though. I don't recommend it.
Currently, however — in cases such as those of your organization and others with very active online activism programs — there is a complicating factor. It's coming into fashion to count online activists (who don't necessarily pay dues) as "members." This isn't a traditional interpretation of the word, but I'm inclined to think it's acceptable. After all, what is a member if not one who actively supports the organization's mission?
What percentage of first-year donors will give a second gift?
What is the expected percentage of new donors (1 gift) who will become regular donors assuming a good new donor relationship building program is in place?
Mal answers: You seem to be looking for certainty in an uncertain field. The percentage of first-year donors who give a second gift varies across the board, depending on a host of factors, only one of which is the quality of the relationship-building program. I have seen viable, ongoing direct mail fundraising programs in which that percentage is as low as 25%. I have also seen some programs attain "conversion" rates as high as 60%. More typically, the rate will fall somewhere between 35% and 50%, or roughly one in three to one in two.
Do you have any experience using Broadcast Voice Messaging (BVM)?
Have you ever used Broadcast Voice Messaging (BVM) to boost direct mail returns? Here's my idea: my company offers the BVM service, which up until now (I'm conducting a test that is returning as of last week) has never been used to alert donors that an urgent letter is on the way to them. I've used a BVM, recorded by the president of the organization, that "an urgent election related letter has just gone out in the mail to them... please watch for it." The hope is that this will help boost the number of folks who watch for the letter and hence open, read and respond to it. Have you used BVM in this way yet? It's very similar to email alerts for the same reason -- sometimes they work and sometimes they don't help significantly. I'll be happy to share the results of the test with you and would appreciate hearing your experience, if you have any, of doing this.
Mal answers: I'm sure that under some circumstances BVM would increase the response to a subsequent mailing, but I have no direct experience in the matter. I'd be happy to review any test results you can provide me. Thanks!
Is an EFT system worthwhile for a small organization?
We would like to set up automatic installment giving vehicles — i.e., a donor pledges $50 per month and we debit/charge them automatically until they request a stop. We are a small organization, so the major vendors like CHI are too expensive and too large. Do you have recommendations on who to contact for these services and if it's worthwhile to offer EFT?
Mal answers: Once upon a time CHI and other such providers offered special deals to small nonprofits. I don't know whether anyone still does. But I suggest you check with Beverly Kempf. Her firm is Payment Solutions (Bethesda MD). If she's not in the small-organization market, she may be able to refer you to someone who is. Tell her I sent you!
How much money can you make as a copywriter?
As an AWAI-trained copywriter (American Writers & Artists Institute), I've been doing a lot of online writing for the hospitality industry. I enjoy it, but I really love (and have a background in) non-profits. My USP is my experience with — and cultural and linguistic knowledge of — the Hispanic market. My question is this: I've invested a lot of time and money in business coaching, and now I would really like to know, before changing gears, if it is possible to make a good living — say 100K a year — in the non-profit sector, within a reasonable amount of time. Do you feel this an appropriate expectation? Or will it always be an uphill struggle to get the fees that would make that possible? Would nonprofit copywriting — with my particular niche — be something that I really had better do for the love of it?
Mal answers: I know that some of my friends who work as freelance copywriters for direct mail fundraising programs make $100K or more. It's a valuable skill, and once a writer connects with a market, the return on one's investment can be large. What I don't know, however, is how long it took them to get to that point. I would assume that it took a number of years. In any case, I would not recommend that you get into the busy of copywriting for fundraising unless you are committed to the causes you work for. If not, your writing will suffer.
If you're good, and if you have a really strong feel for the Hispanic market, you should have a special advantage in a large and growing market. And if you can write Spanish as well as English, you'll have an even bigger market. The nonprofit sector is growing at a tremendous rate in Latin America, and there are few skilled copywriters in the market there.
Are my quantities too small for accurate testing?
I am worried that our lists are too small to receive accurate test results. We have an active donor pool of about 5,000 donors, which we almost always segment by very new, active donors, special donors, and major donors. We also have groups of recently lapsed (1,600 donors), and long lasped (6,200 donors) and prospects by the thousands as well. Are any of these groups considered big enough to conduct testing? We are interested in testing first class vs. bulk, BRE vs. non-BRE, etc.
Mal answers: What a coincidence! Just a few months ago Jossey-Bass published my latest book, Testing, Testing, 1, 2, 3, which is about — big surprise! — testing. You'll find the answers to these questions, and lots more, in the book. Check my Web site, go to the Jossey-Bass site, or visit Amazon.com, if you want to get a copy for yourself.
However, you asked a question, and I'll answer it here. There is no useful rule of thumb about the quantity to mail in order to generate statistically valid results. That's because that number depends on two factors:
(1) the rate of response you predict for each group (or "panel") you're testing; and
(2) the degree of certainty you require to feel comfortable with the results, which will, in turn, determine the number of responses you'll need to obtain to assure yourself that the results are meaningful.
For example, let's suppose you anticipate a response rate of 10% from an appeal to your donor list. If you have 4,000 donors, and you want to test two things head-to-head — say, first-class postage vs. third-class — you could create two test panels of 2,000 names each, randomly chosen. With a response of 10%, you could reasonably expect that each of those panels will yield approximately 200 gifts.
For some mailers, 200 gifts is a minimum. For others, 100 will suffice — or even 50.
But that's about as far as I can go in responding without getting into really technical matters.
Good luck, and thank you for writing!
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