Honored to Be Honored

On July 23rd, THD and many of our client partners were recognized for creative excellence at the 37th Annual NEDMA Awards in Boston including Best in Show for the Wounded Warrior Project’s “Tangible Giving” Package, aimed at encouraging donors to upgrade giving

Of the 20 awards received, work for seven different client organizations was recognized with Gold, Silver or Bronze distinctions including Operation Homefront, Wounded Warrior Project, Birthright Israel Foundation, Feeding America, Mercy Corps, Autism Speaks and Make-A-Wish. THD itself also won awards for blog copywriting and for a series of promotional space ads.

Wounded Warrior Project

“This was a record year for THD and our clients,” said Sherri Mayer, Senior Vice President of Creative Services.

“We love that the NEDMAs reward more than creative execution. Judging also takes into account the ability of campaigns to move our clients’ missions forward and more importantly, generate results – and that makes them even more meaningful.”

THD NEDMA Team

While the team at THD is thrilled to be recognized by NEDMA, our greatest sense of pride comes from the company we keep – our clients. To those organizations we say, “Thank You!” While data drives the work we do, our inspiration comes from you and your incredible missions.

The New England Direct Marketing Association is a professional resource center for all forms of direct marketing media and brings together the best and brightest across many different sectors.

For more information or to get in touch, click here.

Second Gift Strategies that Work!

Sarah Koss
VP, Account Services

We all know that getting the second gift from a new donor is a key objective in the donor journey and crucial to long-term retention. And yet, as many as 70% of all donors leave us after that first gift. How can we enhance & extend the donor journey to reverse the trend?

Here are a few second gift strategies that can make a difference to your program:

Say “thank you” … then say it again

Many times the first communication after the first gift is an acknowledgement, which is meant to provide the donor with a tax receipt for his/her first gift to the organization and solidify the donor’s feelings of goodwill.

Before your newest donor receives yet another request for money, you have an opportunity to begin building goodwill. If you’re using best practices, everyone will receive an acknowledgment with a tax receipt in a timely manner after the first gift. But consider going even further:

  • A real, honest message of thanks. While it’s true that most acknowledgments include a thank you, they also include another ask, which can diminish their impact. Consider a communication that is a pure and unadulterated thank you across all channels. For high dollar donors, consider a phone call. For lower dollar donors, consider cost effective formats such as a postcard or email.
  • Welcome them into the community. It is critical that you educate the donor about your organization and show them their impact in order to solidify their place in your community. You can include all that in a multi part email “Welcome!” series that makes them feel good about their gift and introduces them to many facets of your organization. There doesn’t have to be a lot of content, but showing impact is key.
  • Begin a dialogue. Another important element in the Welcome is to start a dialogue with your donors. Including a brief survey is an excellent way to accomplish this. Let them have a say in how often they would like to hear from you and in what channel.

Pay attention to the age-old best practice: renew as acquired

We’ve seen response rates more than double when the donor’s original acquisition vehicle is sent within the first three months of the renewal cycle!

Speak to donors personally

In the first year of the donor relationship, it’s critical to speak to them appropriately. Often, new donors are simply thrown into renewal segmentation and receive renewal messaging that doesn’t resonate with them or acknowledge their new relationship. Think about:

  • Segmenting out new donors for the first year of their relationship, further acknowledging and thanking them. You can also encourage a second gift in a way that shows you recognize their status. For example, instead of asking the donor to “renew their gift” ask them to consider “an additional gift.”
  • Review and evaluate existing control content to ensure the new donor is receiving information that is relevant. Your GA data and social threads are great sources for what your constituents are consuming & responding to. Newsletters represent a great opportunity to present mission information as well as highlight the donor’s impact and enhance the relationship.
  • Introduce your new donors to other ways of getting involved. This can include volunteering or joining an event. Or it can be an opportunity to join a monthly giving program, subscribe to your blog, or participate in your online forums. We know that the more engaged they are with you, the better they will retain.

Remember, if you can get that second gift, you increase a donor’s chances of retaining by anywhere from 35 to 60%. So if you’re not putting second gift strategies into place, we’ll be happy to partner with you to increase those all-important retention rates.

Similarly, be sure to get in touch if there are subjects you’d like to see in future issues of Straight Talk.

Happy reading!

Four “Must-Do’s” to Ensure a Strong Mid-Level Program

Nora Millwood
VP, Account Services

Many nonprofits (yours included?) are looking to enhance their mid-level programs, and for good reason. With flat or declining program investments and fewer new donors, focusing on your mid-level is a critical way to increase revenue without a great deal of added expense.

But how do you ensure you’re developing a strong pipeline of Mid-Level donors who are committed to supporting your mission, upgrading their giving over time and, eventually, giving a Major Gift?

At THD, we believe a two-way conversation is central: Talking to Mid-Level donors so they will listen… and listening to Mid-Level donors so they will talk. You may have caught the recent DMANF DC Conference session with Beth Fitch from Mercy Corps and two of my colleagues, Jess Hutchins and Sherri Mayer, on this topic but it’s so important that I wanted to touch on it again.

Mid-Level donors often increase their value to you naturally because of their higher income levels, affinity to your mission and the good work you do. Because of this, too many organizations dismiss the need for greater attention on this audience. But we have seen through work with our clients that developing a strong and well-defined outreach program can actually lead to significant upgrading and improved retention. Increased loyalty? More revenue? Yes and Yes!

From experience we know Mid-Level donors are unique, and we must be sure to treat them that way. They tend to be highly educated, informed about the organizations that they support and intent on investing their dollars wisely. They have a hunger for information and a desire to make an impact on the world. So how must we treat them in order to maximize their value to your program?

We have found there are four “Must-Do’s” in order to ensure a strong Mid-Level program:

#1 – Encourage a CULTURE OF PHILANTHROPY – Organizations who are most successful in building a strong Mid-Level program understand the importance of this audience and are committed to donor cultivation. They recognize and appreciate the value of a donor, particularly a high value one.

#2 – Create DIALOGUE – Asking a donor questions and really listening to their feedback is critical. You can learn so much from what a donor says, both positive and negative. It will help inform your contact strategy, creative and messaging and drive increased donor value and loyalty. As an example, THD Ambassadors develop relationships with donors through phone, email and handwritten notes. They serve as a representative of your organization to answer questions, provide support for issues and educate donors on the impact their giving has had and will continue to have on the mission.

#3 – Always show IMPACT – Mid-Level donors care about efficiency and impact. They want to know their donation is being put to good use and that they’ve made a sound investment. So it’s critical to focus on these key messaging points in every solicitation and cultivation effort.

#4 – Make a long-term COMMITMENT – A strong Mid-Level program won’t be grown overnight. Your organization has to be committed to investing time and money to develop this pipeline of Mid-Level donors. And over time, the rewards will be great in the form of even more Major Gifts.

If you’d like to go deeper with this important subject or have other experiences to share, just let us know. Similarly, be sure to get in touch if there are subjects you’d like to see in future issues of Straight Talk.

Happy reading!

Five Easy Steps Toward Understanding Attribution

Chris Hubbard
VP, Account Services

Direct marketing used to be exactly that: “Direct.”

But in today’s multi-channel marketing world, that’s not the case. With donors receiving fundraising messages and brand impressions through a wide variety of sources and channels, we now must answer a more difficult but pressing question: “How did our promotional effort in channel X influence giving in channel Y?”

Most often it’s impossible to prove direct attribution, however understanding the correlation between efforts in one channel and outcomes in another helps inform campaign strategy, investment decisions and our understanding of the donor behavior.

Plus, making decisions about program investments based on face-value performance can be dangerous. Imagine cutting back on acquisition mail program volume only to find that you lost $250,000 in digital revenue as a result, too. In Press Your Luck parlance, that’s a “double whammy!”

For-profit companies are now fairly sophisticated in term of true attribution modeling. Non-profits aren’t there yet and may not be for a while. That’s okay, though. Understanding the correlations can support your decision-making process and begin to define an attribution strategy that works for your organization.

So how do you lift the veil and take a closer look at how programs influence each other? Here are five valuable steps you should make part of your regular monitoring habits:

#1 – Match your “passive” giving sources against your promotion history
Most clients have source categories like whitemail, web giving, and tributes built into their gift source coding methodologies. While these may appear to be “over the transom” gifts, analysis usually says otherwise. Compare these gifts to your promotion efforts and you’ll find that many of the donors making these gifts received a recent promotion.

With one client, we discovered that 23% of these gifts were preceded by a mail promotion within the prior 30 days…and the revenue from these was over $5 million. More so, 55% of that revenue was received within 10 days after the in-home date. While some of that giving may have occurred naturally, who wants to take the risk of finding out how much?

#2 – Conduct match backs against your recent prospect lists
While exercise #1 tells you more about existing donors giving through alternate sources, a similar analysis can be conducted on new donors. You’ll probably need the help of your merge-purge supplier to do some name and address matching of “passive” sourced donors against recent prospect files. Once the matches are identified you can calculate how long after the in-home date the gifts were made. Like above, you’ll start to see a correlation between the delivery date and these gifts.

While not a perfect science, you can determine what percent of those responses you want to attribute to the acquisition mail effort when determining how much to invest in a mail acquisition program.

#3 – Use unique URLs where possible in mail and print offers
We all know that donors and prospects don’t always use the unique URL you provide. And yet, it’s still valuable and does attribution work for you. With a unique URL, you will get more real-time learnings on campaign or test performance, particularly if you are executing a strategy where the objective is to move people online. Keep those backslashes short and relevant.

#4 – Chart media impressions against direct response revenue trends
This is a less granular measurement but starts to build the bridge between your direct response and brand communications efforts. It’s well known that larger media campaigns provide halo coverage for all fundraising efforts — but to what degree? Work with your internal teams to capture impression data as specifically as possible (daily or weekly being optimal) and then compare that information against different giving types on file.

Depending on the type of media (i.e., digital ads vs. TV spots, etc.), you are likely to find different correlations. Year-over-year and pre-flight, in-flight and post-flight trends help illuminate the effect of these advertising impressions.

#5 – Develop a time-based attribution methodology for digital advertising efforts
According to Smart Insights Display Ad CTR Benchmarks published in January 2018, all ad formats and placements averaged a click-through-rate of just 0.05%. While this is a really low CTR, we can attribute web revenue to donors who recently saw a display ad. When reviewing view-through performance from your display partners, make sure you are capturing the time of the viewing and the time of the gift. Then you can use a graduated attribution model that gives more credit to the display effort the closer it compares to the timing of the actual gift.

If you’re like most nonprofits, you will continue to give donors a multitude of options for giving and surround them with omni-channel marketing messages. With such varied donor touchpoints, we all need to become comfortable with the fact that donors will give where they are most comfortable, which doesn’t necessarily align with what is easiest to measure.

If you’re not undertaking some of these measurement exercises, it’s important to get these processes in place soon. We’re here to help, so be sure to let us know if you have questions or experiences to share!

7 Ideas to Rev Up New Donor Acquisition

Chad Lucier
Chad Lucier
Vice President, Account Services

New donor acquisition ain’t what it used to be.

While it’s a road that continues to be traveled by most nonprofits, it’s filled with more bumps and potholes than ever, as evidenced by the Blackbaud donorCentrics Index:


blackbaud-chart

There is some positive news: nearly ½ of all organizations realized a positive change in 2016 and the median decline was only -1.2%.

Regardless of whether you’re in the 51% on the decline or in the lucky 49%, here are a few ideas that might help rev up your new donor acquisition program:

1.    Invest in paid search

The Chronicle of Philanthropy ran an article several years ago that has always stuck with me.

It stated that four out of every five donors research an organization before donating. I imagine this is even truer for new donors than existing donors. This means that optimizing your Google grants and paid search investments will ensure that your prospective donors not only find you, but that they get the message you want.

More importantly, a good paid search strategy is critical to capitalize on the awareness and intent being created by all of your on-line and off-line efforts.

If you want to read more about digital acquisition, check out Jeff Ostiguy’s blog post.

2.    Consider insert media

Insert media utilizes 3rd party companies and publications to distribute your offer directly to individuals. This can take the form of anything from statement stuffers to catalog bind-ins to newspaper inserts.

Insert media has one distinct advantage over direct mail. Because there is no postage or addressing involved, the cost to produce and distribute insert media is significantly less than direct mail. As a result of those low costs, you can reach a much larger audience and deliver a significant number of impressions.

Although response is significantly lower than direct mail, those cost savings can result in a similar upfront CPDR and by all indications life time value is just as strong. For one client we’ve seen a 20% improvement in the CPDR.

If you’ve maxed out your direct mail acquisition efforts, insert media may provide the incremental gains needed to get back on the path to growth.

3.    Use back-end premiums to boost response

Back-end premiums are growing in popularity; most insert media packages utilize them, many DRTV spots offer one for becoming a monthly donor and Peer-to-Peer campaigns are using water bottles, fleece jackets and the like to promote higher gift levels.

More organizations are using them in the mail to effectively increase response rates, and in some cases average gift size.

In three separate client tests, back-end premiums drove significant improvements. Response rates increased by a minimum of 20% and average gift improved by as much as 25%.

If you haven’t tested a back-end premium in the mail, maybe it’s time. I also recommend testing the price point right out of the gate since it can greatly influence both response and average gift.

4.    Consider front-end premiums, too

Hate them all you want. But there’s a reason a majority of organizations use them: they drive response. In many cases those address labels or note cards will increase the number of donors at both ends of the giving spectrum.

Below is one recent example of where a premium was tested against a non-premium and resulted in more new donors at all gift levels.

Compared to the non-premium, the premium generated:

70% increase in $15+ gifts
49% increase in $25+ gifts
10% increase in $50+ gifts

The average gift was $28 for the non-premium and $21 for the premium, which as you can see, can be very misleading. A gift distribution is critical to understanding the value of your premium based acquisition package.

If you aren’t using front-end premiums, they are worth another look.

5.    Use non-premiums for higher value donors

A non-premium based acquisition package won’t increase the number of new donors at the same rate as premium packages. But package costs are low and lifetime value is high so there are plenty of reasons to incorporate non-premiums into your new donor strategy.

To get the most out of your non-premium strategy, make sure you reinvest those cost savings.

While costs vary widely, many non-premium packages cost $100/M less than a premium-based package.

If you are mailing five million non-premium packages, that is $500,000 that you can reinvest in either increased volume or one of the other strategies noted above. By doing so you may actually reap the benefits of both a larger and more valuable donor universe.

Like a balanced portfolio of stocks and bonds, a combination of premium and non-premium acquired donors will typically yield the best balance between growth and value.

6.    Retarget website visitors

Most organizations are retargeting their website visitors with banner ads … but how many are retargeting those visitors with direct mail appeals?

By all accounts, retailers and other commercial organizations are successfully using direct mail to convert web site visitors to customers. This usually takes the form of a postcard featuring a product that you browsed online. While application and execution may be different for non-profits, it is an exciting opportunity nonetheless.

Although this is fairly new to the non-profit space, the potential exists to convert a number of returning visitors or donation page abandoners into donors. This could be especially meaningful for organizations with significant web traffic.

At the very least, this is a new way to target a warm prospect universe.

Which brings us to…

7.    Don’t neglect warm prospects

The path to growth isn’t always through new donors. Sometimes it is more productive to mine the event names or memorial donors that are on your own database than it is to acquire a new donor.

The trick is in identifying the ones most likely to respond. For some ideas on the matter, I encourage you to read Brian Murphy’s recent post about uncovering the buried treasure in your database.

What did I miss? Please share your thoughts and ideas about how to rev up your acquisition program by clicking here.

Your Best Planned Gift Pipeline… is Your Database

Jess Hutchins
Director, Donor Advancement

Did you see the recent headline about the $4 million dollar bequest from a janitor? As a former Planned Gift Officer, I see these stories all the time. Where do these donors come from, and how can I find them? Those questions would often pop into my head.

I was delighted to hear just such a story from a client last week. A multi-million dollar bequest they knew nothing about – good for them!

Here’s what we learned when we dug into the donor’s history:

  • His first gift of $45 was in 2012 in response to a direct mail acquisition package
  • All subsequent gifts were made in response to direct mail appeals
  • Since coming onto the file, this donor made a total of 11 lifetime gifts
  • All his gifts were made in response to direct mailings
  • His largest gift ever was $1,000 (all other gifts between $25 and $54)
  • Last gift was in May, 2014 (we’ll get back to this later)

This gift – and the donor who made it – illustrates why a robust direct response program – and its database – is a critical pipeline for any nonprofit who wants to increase planned giving revenue (and who doesn’t?).

And yet, it’s an opportunity that is being missed, mishandled, and far too often, misunderstood.

“Many of our valued donors who have provided for Mercy Corps in their wills are acquired through donor acquisition direct mail campaigns, including a recent six-figure donation.”

David Rubin
Senior Director of Major Gifts
Mercy Corps

A different mindset
Planned giving professionals often come from different backgrounds than direct response marketers. We know that the organization we work for has a direct mail fundraising program and asks donors for annual gifts – but often we don’t really know who these donors are, how they behave, or that many of them are qualified to be pursued for planned gifts.

What it took me almost ten years to learn is that, in fact, this database is a virtual gold mine for PG prospecting.

Some organizations are going to have millions of records on their database, some will only have thousands. But the process of identifying, communicating, and cultivation remains the same. One of our most successful programs was with a highly respected international humanitarian organization with more than two million active donors.

We’ve included a brief case study of how THD was able to uncover nearly 8,000 PG prospects for cultivation and stewardship in one client’s database… and successfully generate dozens of planned gifts.

But identifying planned giving prospects is just the beginning. Without a clear plan to cultivate, steward, and communicate with them, you’re wasting your time and money.

Where intention and action meet
Most planned gifts are nothing more than good intentions… until the check is in the mail.

Yes there are some cases, such as irrevocable trusts, where you can count on the revenue. But since most gifts are bequests, they can be changed, altered, or withdrawn at any time.

Without continued cultivation and consistent communication, you can lose a percentage of planned gifts BEFORE they are received by your organization.

So reach out to them even if they have already indicated that you’re in their will. Make sure that your organization is top of mind. And continue to keep them active, engaged, and involved.

How to recognize when someone’s ready for a planned gift
There is one excellent marker for a potential planned gift, and it may not be what you expect.

Take another look at the behavior of the donor who left that multi-million dollar gift I mentioned earlier. He gave frequently and he was loyal, both of which matter. But there was one specific behavior that you want to look for.

He had stopped giving more than two years ago.

When loyal donors lapse, it might indicate a lifestyle change (such as moving to a fixed income) that prevents them from making annual gifts. At this point, whatever they give is going to be through their estate.

These are donors who love you and may want to make sizable gifts! But if you’re not watching closely (or having a PG partner do it for you) these prospects will make their gift to someone else.

When it comes to planned giving, matures rule
Beginning this year, the oldest baby boomers will turn 70. Approximately 72 percent of them give to charity – and the majority reside on a database, along with both older and younger donors who are excellent prospects for planned giving.

Show the love to your direct response donors and you will reap planned gifts for years and perhaps even decades to come.

To continue this conversation with our team at THD, click here.

How to Talk So Your Board Will Listen

I know just how challenging it can be to deal with a Board of Directors.

As CEO of THD, a fundraising agency that drives strategy and regularly presents program results, I appreciate that attempting to predict what your Board needs to hear from you can be intimidating and frustrating. The stakes are high, and it’s essential that your program is understood in the best possible light.

At the same time, I bring a unique perspective to this important topic, because I’m also the Chairman of the Board of Boyce Thompson Arboretum, Arizona’s oldest botanical garden. These dual roles provide me with some insights that might be of use in helping you navigate your relationship with your own Board of Directors.

Fundraising is different. Tell your Board why.
Boards are passionate and typically composed of very talented members. But their knowledge of fundraising is often elementary.

A survey by The Agitator (reviewed in an August 10th blog post) revealed that, when asked to “rate your CEO’s understanding of and commitment to effective fundraising,” 23% responded that they were “more of a hindrance than a help.”

But are you helping them?

We already know that many of your Board members (including your CEO) aren’t necessarily fundraisers. One is a high tech entrepreneur, another is an accountant, a third is from a big corporate foundation and so on. They’re all over the map and have little experience in your field.

But one thing they do have is opinions.

It’s logical to assume that they’re going to try to fit their professional experience into fundraising. Unfortunately, the dynamics are often totally different. While they may understand their own customer acquisition numbers, they believe that for nonprofits, people should just magically support the mission. They’re emotionally invested and engaged, and it’s hard for them to understand why their commitment doesn’t necessarily translate to a broad pool of donors who are willing to give.

That’s why you need to proactively educate your Board in order to gain legitimacy.

The only way to do that is to sit down with your Board and explain the data that goes into fundraising. Once they see how the numbers work, it’s no longer a question of opinion, it’s a question of facts.

For example, Board members sometimes put too much stock into the opinions of those outside your organization, like watchdog groups. Sound familiar? Educating the Board should often center on an actual ‘fundraising curriculum;’ a series of lessons on what numbers really matter and which mean a whole lot less.

“The insights shared [by THD] help provide our board a more complete understanding of our fundraising work.”
Lori Seader
Director of Development, The Fresh Air Fund

Context is key.
We’re fortunate that fundraising has entered an era when we can easily give our Board the context they need in order to hear you. A number of organizations like Blackbaud provide excellent quarterly benchmarking so that Boards can receive comparative data in terms of how their program is doing. You have to start with the “industry” and then narrow in on the organization on whose Board they serve because that gives them context.

They need to understand that there are really only four ways in which they can raise unrestricted revenue:

  • Acquire more donors
  • Retain more donors
  • Get them to give more often
  • Encourage them to give a larger gift

And because the marketplace has changed dramatically over the past decade, new ways of measuring progress have been developed.

Show them how much the competition has exploded, what it now costs to acquire a new donor, and what the long-term value of a donor can be. Ground them in the metrics of today’s fundraising landscape so that they can understand the challenges and appreciate them.

Provide them with long term impact.
I cannot emphasize this enough: Most Boards think in terms of your fiscal year when it comes to measuring fundraising performance.

They may not be happy with a 2:1 ROI in this fiscal year, but if we could show over a three year time frame or some longer extended period that we’re actually at a 5:1, 6:1, 7:1, they may be more accepting of today’s ROI.

In addition, if you can provide them with concrete examples of how you turned a $10, $12, $30, $50 gift into a five million dollar planned gift, it can elongate and change the perspective that Board member has on the day-to-day or year-to-year work that’s being done.

Even at a very basic level, they have to understand that finding new donors is an expensive proposition which can only be looked at over the long term. Then, when you turn around and start to look at how your existing donors behave, you’re able to really show that the ROI is actually quite good.

Identify a champion.
It’s always valuable to find someone on the Board who appreciates and values fundraising. It really doesn’t matter where they come from as long as they’re open minded and willing to learn. Then they can serve as your advocate in meetings, helping to lay down the foundation of understanding for the development process and the numerics.

If you can find them quickly, they’re going to be a key asset to you when it comes to helping educate their fellow Board members.

Most Boards have committees where the lion’s share of the work gets done. One of the most important is the Development Committee, which is typically tasked with fundraising oversight.

It’s important that its members get exposed to all facets of your organization’s fundraising programs, and that they be kept informed of progress on a regular basis. They are your conduit to the rest of the Board – along with other key committees such as the Executive and Finance Committees.

Friends, supporters, and advocates on these committees are going to be a key asset to you when it comes to helping educate their fellow Board members.

Be prepared, be bold, be authoritative.
Boards meet infrequently and have demanding agendas. What they value most is someone who will state his or her case simply, get to the point quickly, and be declarative.

Always have your facts straight and always be prepared to answer the question that you know is going to be asked. Don’t overwhelm them with data – be concise.

I can’t tell you how many times I’ve been in Board meetings and the data is too detailed, too granular and simply overwhelming. Sometimes, we think that the more data, the better, but often it’s just the opposite. Lots of data can obscure what you’re trying to say.

And finally, ask for help. You can turn to an agency partner, someone like us, for a helping hand. We are all invested in your success, and will be happy to help arm you with the information you need in order to get your Board’s support.

ian-sig
Ian Thompson
President/CEO, THD

To continue this conversation with the team at THD, click here.

Flat Budgets, High Expectations: The Fundraiser’s Dilemma

We can’t increase your budget [again]

For most of us in fundraising, doing more with less has been the mantra for years.

Even if your budget is flat, your expenses are going up. Paper, postage, people – they all cost more today than they did five years ago. So a “flat” budget actually means a smaller budget.

At the same time, most nonprofits are expecting growth. And you are on the front lines of delivering increased revenue.

Raising more money in a risk averse climate

In his famous (or infamous, depending on your opinion) 2013 TED talk, Dan Pallotta stated that the nonprofit industry’s intensive focus on overhead – fueled by industry watchdogs and public expectations of frugality – squelches innovation and makes risk a four-letter word.

“When you prohibit failure,” he says, “you kill innovation. If you kill innovation in fundraising, you can’t raise more revenue; if you can’t raise more revenue, you can’t grow; and if you can’t grow, you can’t possibly solve large social problems.”

And yet, it’s the circumstances that we face each and every day.

We’d all love to swing for the fences, throw caution to the winds, boldly go where no fundraiser has gone before. But in today’s fundraising environment, we are more often called upon to minimize risk while searching for opportunities to drive greater revenue.

How can we accomplish both? Let us offer up a few solutions.

Offer assignment modeling

As often as not, when it comes to direct mail, many organizations mail everything to everyone and hope for the best. One of our colleagues calls it the “spray and pray” method of fundraising.

But doesn’t it make more sense to mail an offer to a donor based on what he or she really wants, rather than what you want to mail?

Offer assignment modeling allows you to identify exactly which donors will be most responsive to each of the specific packages and offers you already have in your arsenal – premium vs. non-premium, for example – making your mailings more donor-centric and more effective.

Here’s how offer assignment modeling works.

A fictional example

Based on the model’s guidance (and fictional numbers) 2,100,000 pieces of mail were assigned to less expensive Package Q rather than costly Package R.

 

Migration Chart 2

 

The impact? Campaign expenses go down while revenue goes up.

 

A real life example

One of our clients now uses a THD offer assignment model on a regular basis. So far, the use of this modeling tool has reduced campaign expenses by $240,000 which is helping to contribute an additional $529,000 in annualized net revenue to their program.

 

Offer Assignment Modeling Overview for AARP

 

Event conversion modeling

As you know, most event participants are one and done.

They may choose to run a charity marathon once … maybe even twice, even if they’re really passionate … but they’re certainly not going to do it over and over again. The fact is, they’re a whole lot more interested in the marathon than your charity, so they’ll be easily captivated by the next big event or opportunity.

And the kind and generous people who sponsor them?

They’re even further removed from your mission. Your cause is barely on their radar, because they’re giving to the people who asked them.

With conversion modeling, you use all the available data – plus plenty of added enhancements – on this large (and growing) pool of “warm” prospects to identify people that could become long term financial supporters. That way, you’re effectively mining for direct responsiveness within a sea of people that would otherwise never return to your organization any other way.

At the same time, you have the opportunity to suppress those event names that aren’t likely to embrace your mission and become direct response gift-givers.

Another real life example

Below are the results of testing a predictive model to select the most productive individuals for a direct mail solicitation – people who had NEVER responded to a direct mail solicitation.

Prospects for the selection came from a variety of events including an annual walk and other community based events. Based on these test results, the model is now in full roll-out for 10 direct mailings a year.

 

selection model

Production efficiencies

Yes, postage and paper costs are increasing. But if your organization can gain some production efficiencies – say, by ganging your appeals with others for greater printing power – you may be able to reduce your per piece costs.

But … and it’s a big but … production savings are finite.

For one client, we did such a great job finding significant, year-over-year production savings that we were able to actually self-fund program growth.

But at some point, even with all the purchasing power in the world, production savings are not sustainable.

One of the best ways to generate short term revenue is also the worst

There are some solutions that we like to call lobster traps – once you walk into them, the door snaps shut behind you and you can never escape.

Take adding appeals, for example.

It’s an extremely attractive option for generating short term revenue. And if you’re given a Sophie’s choice – cut acquisition or add in another appeal – it’s often the best solution.

But once it’s done it can be very difficult to undo. And if revenue expectations increase every year, where does it end? When your renewal file is receiving mail every other week? Every week? It’s a slippery slope that may impact retention rates over the long term.

Investing in the digital channel

Today, snail mail represents more than half of all total fundraising – and nearly 93% of individual donations. It is, despite reports to the contrary, very much alive.

But it’s sure tougher than it used to be. We all know that it costs significantly more to raise a dollar than it did ten years ago. That the nonprofit market place has increased exponentially.

NPOs

And that some of our most reliable supporters (the Matures, born before 1945) aren’t being replaced by younger direct mail responsive donors.

And then there’s digital.

While the digital channel hasn’t replaced direct mail, and probably won’t for many years, there is no doubt that it has changed the landscape of fundraising and donor engagement.

We know that donors who respond in more than one channel have a higher lifetime value. That’s reason enough to invest. Even better, it develops relationships with donors who are engaged, passionate, and most importantly, under the age of 75.

Most organizations continue to seek out ways to effectively monetize digital media beyond email. There have been a few hugely successful viral campaigns (think Ice Bucket) and influencers such as Ashton Kutcher and One Direction have raised tens of thousands through Twitter campaigns.

But those are one-off opportunities that are difficult, if not impossible, to replicate with intent.

What we do know is that digital can be executed quickly, budget can be controlled, and that testing and learning can be done in real time. That it is the fastest growing fundraising channel since, well, direct mail. And that it is the channel of choice for the next generation.

Stake your claim to revenue

stake your claim

There may be revenues that you are indirectly responsible for, and it’s imperative that you stake your claim to them.

One nonprofit organization just rolled out with unique URLs on all DM packages in order to track revenue directly attributable to mail pieces – and quantified more than a million additional dollars in online revenue.

And that doesn’t even begin to capture the long term value of these multi-channel donors, which is far higher than those who give in one channel only.

Looking at organic online revenue is more complex, but it can be done through analytics. For one client we were able to show that 5-8% of their organic new donors received an acquisition mail piece before going online to make their gift.  And that stat was consistent over a 3 year study. Without the mail, those donors may not have been prompted to consider giving to this charity.

You may also want to look at how many people moved from “mass market” to major giving. Or how many of your planned givers came from the mail. It’s all about showing how your revenue has increased even if it hasn’t contributed to your program’s bottom line.

Flat budgets, high expectations – playing to win

the end

To recap, here are just a few ways that you can deliver increased revenue year over year… even when your budget remains flat.

1. Use modeling to target the right people

2. Look for production efficiencies

3. Add appeals or asks – with great caution

4. Invest in digital with your direct mail savings

5. Ensure that you’ve quantified incremental revenue

 

To continue this conversation with THD Click Here

How to Write to a Donor

penDo you remember your first “real” job?

Mine was selling encyclopedias door to door. (Note to readers under 30: “Encyclopedias” are 30-volume sets of books that have information about a lot of stuff. Think “Wikipedia” with better pictures, fewer editing errors, and a 4-figure price tag.)

As part of the training, they had us memorize and practice a sales pitch, then sent us out to the field. Most of the new guys did great. I was the Hindenburg, Apollo 13 and Hurricane Katrina rolled into a massive ball of hopeless disaster. Zero sales the first day, zero the second, zero the third, etc. After a week of wasting perfectly good sales leads on me, my sales manager accompanied me on a call. We went to a home, I did the pitch flawlessly, but … no sale. As soon as we left, I asked the sales manager, “So? What did I do wrong?”

He said, “You lost that sale in the first 3 minutes. You never engaged them, never asked them about themselves. Your pitch sounded canned, because it WAS canned. They thought, ‘he doesn’t care about me, why should they buy something from him?’”

Oh. So sales isn’t a one-way street. It’s matching what the prospect needs with what you can offer.

Which brings me to this blog post. If I am going to engage you, I need to give you worthwhile information on something you care about. Unfortunately, the only thing I know about you is – well, that you’re reading this post. So I’m going to start with an assumption:

If you’re reading this, I am going to assume you fit into one of two categories: 1) you write fundraising direct mail copy, or 2) you review copy someone else has written.

Two principles to keep in mind

I have just demonstrated my first principle of DM copywriting – envision your target audience.

“But,” you say, “That may not be an accurate assumption. Anyone could be reading this blog.”

That’s true. But I still think this is the right approach. Why? Because you should write to the people who might respond, not the entire world (my second principle).

“But, but, but …”

This is painful for the person paying the bills. “I’m paying good money to reach 100% of the mailing list! I want to talk to them all!” I get that, and I sympathize. No-one likes to knowingly waste money.

But, think about the arithmetic of direct mail. What would be a great response rate for your mailing? 2%? 4%? TEN percent? If you got a 10% response rate, people would be turning backflips and swigging champagne (OK, maybe not the champagne … and, at my age, maybe not the backflips either. But you’d all be pretty happy, right?)

The flip side of response rate and why it matters

The thing is, a 10% response rate means a 90% NON response rate. The huge majority of your target audience is not going to respond. How depressing! Actually, it’s sort of liberating, because, as a writer, my advice is: forget about them. There is nothing you can do or say or show that will convince them to respond. They are “no’s.”

Conversely (and happily!), there are a small percentage of people who will respond to anything. You could scrawl “send money” on the back of an old shopping list and a check would be on its way. They’ve completely internalized your mission, they love you, and they just need a reminder to give – the idea behind “collection plate” DM. These folks are “yes’s.”

The sweet spot for the writer

But, for a writer, neither of these are your REAL audience. Instead, write to the “maybe’s.” These are the people who might respond if you say the right things to them. If I’m back selling encyclopedias, these folks haven’t slammed the door in my face, but they haven’t called in an unsolicited order either. They’ve invited me into their home, but told me they only have a few minutes.

That’s your audience.

“But,” the bill payer from a few paragraphs back protests, “What’s the HARM in creating messages for everyone? Why not at least TRY??” The answer is, it can sabotage your mailing: the less specific your message, the less it will appeal to the REAL audience, the maybes. Stated another way, you’d have to reduce the effectiveness of your message to the people who might respond, in an effort to appeal to people who won’t respond anyway. When you say it like that, it’s an easy call.

OK. What next? “What” next.

So that’s the “who.” Let’s talk about the “what.” As in, WHAT should we say in our mailing? There are, roughly, four things you have to answer for a prospect before they send you a check. I will describe them in my next post. Stay tuned!

Your Flux Capacitor Needs Service

Flux Capacitor
Today is October 21st, 2015.

It’s the late Dizzy Gillespie’s 98th birthday, Kim Kardashian’s 35th, and THD’s own Sherri Mayer and Cris Parisi are celebrating today.

The USS Constitution “Old Ironsides” was launched on this day in 1797, cement was patented in 1824, Thomas Edison invented the lightbulb in 1879… and in 1985 Christopher Lloyd and Michael J. Fox traveled through time in a Delorean.

As Marty and Doc, they got their hands on enough plutonium to generate a charge of 1.21 gigawatts and set the date to October 21st, 2015.

The movie, released in 1989, made some pretty bold and surprisingly accurate predictions.

Some have come true…

Flat screen TVs, drones, 3D, Holograms? Check.

Artificial Intelligence? Hello IBM Watson.

Some seem close…

Hoverboards? Getting close, thanks to Lexus. Flying cars? Not so much, but probably only off by a decade or so. They also predicted fax machines on every corner… whoops!

All this got us thinking about, well, 1985 and what we, as fundraisers, might have predicted.

“My fundraising program won’t survive – my donors are dying!”

Here we are in 2015 and charitable giving is at an all-time high. Your audience has shifted, sure, but a huge number of baby boomers are just entering the most charitable stage of their lives.

“I just added an 800# into my last direct mail piece! My fundraising practice is REALLY integrated now!”

None of us could have predicted that “integration” would grow to include such an incredible, ever-evolving mix of channels. Or that good ol’ direct mail – whose demise has been forecast for decades – would continue to thrive as a cost-effective part of your marketing mix.

“My brand? What do you mean, my brand?”

In 1985 we were organizations. Not “brands” with stories, unique voices and instantly recognizable wristbands, clothing lines… or ice buckets.

Fundraising databases were stored on mainframe computers that covered the area of several football fields. Imagine telling someone in 1985 they would be in a “cloud”.

In 1985 “Omnichannel” was likely to be a new venture brought to you by Ted Turner. “Cross Channel” was a swim from England to France. A “viral” campaign was something you probably wanted to avoid. And “mobile” was… well, moving.

What hasn’t changed?

Americans continue to be among the most generous people on earth. They might lend their support differently than they did in 1985, but their ability to feel compassion – and act on it – remains the same.

Say what you want about the impact of modern technology on our lives. But no one can challenge the fact that it has provided us with new and innovative ways to support the things that mean something to us.

It’s an exciting time to be a fundraiser! Imagine what we’ll have accomplished when Marty and Doc land in 2045, in their fully electric, self-navigating Google Delorean.

BTW, the movie also predicted the Cubs would win the World Series in 2015. As of this writing…