Direct Mail Fundraising in 2008: Good News/Bad News Figures, Forecast, and Focus

1. Direct Mail Fundraising in 2008: Good News/Bad News Figures, Forecast, and Focus

2. Good News Figures According to Giving USA 2008: • Charitable giving exceeded $300 billion in 2007 for the first time in history • Giving rose by 3.9 percent in 2007

3. Good News Figures According to a USA TODAY/Gallup Poll: • 3 of 4 dollars donated in 2007 came from individuals; the rest were from corporations, foundations and charitable bequests • 90% of people 65 and older donated money to a charity in the past year • 8 in 10 Americans donated money or volunteered time to a charity in the past year

4. Good News Figures • Non-Profit Times says 8 out of 10 appeals are opened and looked at; direct mail still is the best-read medium • Vertis’ Customer Focus Poll, Non-Profit: 59% who give use direct mail for philanthropy 62% say the most important factor is the personalized nature of appeals; 59% say timing; special offer 32%; urgency 30%

5. Good News/Bad News Figures In a survey conducted by the Center on Philanthropy at Indiana University: • Fundraisers experienced more success with direct mail in the first half of 2008 than they predicted last December. • All other fundraising techniques met with less success than predicted.

6. Bad News Figures According to the USA TODAY/Gallup Poll: • 66% of Americans expected to donate the same or more this year as they did last year, but 72% said their finances would affect their philanthropy. • U.S. companies donated an average of 0.8% of their pretax profits in 2007, down from 1.4% in 2004.

7. Bad News Figures • The top 8% of households based on income and wealth, which is responsible for more than 50 percent of charitable giving, have been most affected by the current economic crisis. • Only 6% of all households gave online last year, according to Giving USA

8. Forecast: Partly Cloudy According to Boston College's Center on Wealth and Philanthropy: • Charitable giving levels may not be affected as much or for as long as feared; • Because high-net worth donors tend to plan their contributions a year ahead, the full impact to giving levels may not be felt until next year • Decline in total donations this year may not be significant

9. Forecast: Potentially Stormy • The Perfect “F” Storm: food prices, fuel prices, financial uncertainty, falling employment figures • If incomes decline significantly, the impact on charitable donations is likely to be much greater than it has been so far this year.

10. Focus on: Turning Prospects into Donors with Direct Mail • Mission clarity: What are your goals? • Organizational effectiveness: how efficient are you in fulfilling your mission? • Testimonials and endorsements: use a powerful story from someone who has been helped in a tangible way; get endorsements from celebrities whose support lends credibility.

11. Turning Prospects into Donors • Impact made by the gift: specifically, how will you put donations to work over the next 12 months? • Values: clearly demonstrated ideals of your organization will coincide with their own, bolstering the case for support.

12. Turning Prospects into Donors • Accomplishments: what did you achieve with donated funds in the past 6-12 months? • Transparency: openness builds trust; show them the money! • Educate, but don’t forget to ASK. Evaluate your results.

13. Direct Mail Prospecting Summary • Mission clarity • Organizational effectiveness • Testimonials and endorsements • Impact made by the gift • Values • Accomplishments • Transparency • Educate and evaluate results

14. Focus On: Improving the Long- Term Value of Your Donors • Recognize the relationship and make a big deal about it: Acknowledge the contribution with a thank you note. Send a new donor welcome kit. • Engage using meaningful content delivered through multi-channel efforts — newsletters, regular updates, surveys, tax statements, invitations.

15. Focus On: Improving the Long- Term Value of Your Donors • New and easy ways of giving should be introduced: pledge opportunities, honor/memorial, monthly, and planned giving options. • Earn trust with operational openness; document your good stewardship.

16. Focus On: Improving the Long- Term Value of Your Donors • Widen the scope of your existing programs or add new ones — a static organization loses support of donors over time. • Ask again within 6 months of the first gift, suggesting reasonable upgrades. Analyze results. • Listen to donors. Regularly solicit feedback about what they want.

17. Donor Cultivation Summary • Recognize the relationship • Engage • New ways of giving • Earn their trust • Widen the scope of your programs or add new ones • Ask again within 6 months and analyze results • Listen to them

18. Focus On: Letter Content • For older donors: use stories to elicit an emotional response • For Gen X and Gen Y: report results, detail plans and offer involvement options • For Baby Boomers: use both emotional and factual approach • For all audiences, include details on where their donations go

19. Focus On: Letter Length • Emotional copy should be longer • Fact-based copy should be shorter • Graphics: Use pie charts to demonstrate good stewardship • Current trends favor shorter letters, due to influence of Internet and E-mail, but… • Be sure you have made a clear case for the benefits of giving to your organization

20. Focus On: Letter Style • Don’t obsess about sentence structure… make it conversational and readable • Keep paragraphs short – 5 lines or less • Use 11 or 12 point type • Preserve white space with good margins and generous line spacing

21. Focus On: Making Your Case To make a solid case for support, describe how your experience, achievements and plans will: • Save lives, • Improve lives, • Create hope for the future, • Achieve greater cost efficiency, • Expand programs to do more, and… • How this will be of potential benefit to donor

22. Focus On: the Ask in the Letter • Personalize the ask based on donor history • For donors, try to work in a “soft” ask by paragraph 3 • Ask should be in the last or penultimate paragraph • Repeat the soft ask in the P.S., unless you have something more compelling to relate, such as a challenge grant

23. Focus On: Setting Achievable Goals • Limit acquisition to renewable new donors • Choose one: growth in donor file or revenue? • Keep to schedule and stay on course until results are clear

24. Focus On: Reducing the Budget • Allocate resources where they will most impact ROI – maximize efforts to core donors • Carefully monitor your lapsed segments by year of lapsed to reduce risk of over-mailing • Mail conservatively to event attendees • Keep data clean and updated • Think twice before giving away premiums or enclosing non-essential inserts

25. Focus On: Reducing the Budget • Be judicious in your use of color • For larger mailings, make sure your package can be inserted by machine • Confirm that your package will qualify for USPS automation discounts • Use first class mail only for your major donors

26. Focus On:Long-Term Success Find ways to elicit multiple, upgraded gifts from each donor: • Acknowledge gifts • Send welcome kits to new donors • Ask again within 6 months • Offer secure on-line and monthly giving options • Send Newsletters or other updates • Provide year-end tax statements • Promote Leadership Giving Levels • Give good reasons for donors to upgrade; acknowledge when they do • Multi-channel marketing – do it now!

27. Focus On: Short-Term Strategy • Look for Challenge Grant opportunities – donors will appreciate the positive effects of compounding their gift • Stress planned giving, gifts of real estate, life insurance, and other types of donations as an alternative to giving cash or stock • Emergency Appeals for Social Service organizations – now is the time, but don’t over-use it!

28. Focus On: Short-Term Strategy • Focus on donor’s emotional identification – their sense of caring. Donors who are able to give more will upgrade to compensate for others who can no longer afford to contribute. • 55% of Americans said friends and family have the most influence on their decision to give to a charity, so cultivate your donors!

29. Conclusion Fundraising is a marathon, not a sprint. Use every technique available to you to generate a gift, but don’t conclude success or failure on immediate results alone. You’re in it for the long haul … your ROIs are profitable only when you’ve started the renewal phase. Organizational patience, foresight and fortitude will reward you in the end!

30. Contact: For more information or for permission, please contact Marcia Scowcroft.