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Case Studies Show How Nonprofits Can Improve Donor Mail Results

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As AccuList’s nonprofit fundraising clients enter their busiest direct mail season, the team thought it might be worthwhile to pass along three case studies from the CharityHowTo blog, showing some basic ways to pump direct mail performance.

The Case for Donor List Segmentation

Donor list segmentation is essential, and delivers dividends even for those starting from scratch. For example, the blog post cites the case of a new executive director at a human services organization that lacked results of historical appeals in terms of targeting and pieces sent. The executive director decided to develop a recency, frequency, monetary (RFM) segmentation and so exported the donor base and began to divide it into sections by last gift date, amount of donation (high to low) and most recent to older. In this case, the executive director broke out donors who had given a gift of $250 or more at some point; these “best” donors were going to receive the same appeal as the others, but the new executive director was also going to include a handwritten personal note with each letter and send the appeal by first-class mail. All other donors were broken out by recency, treating the 0-24 months donors as  “active” donors, and then further segmenting for those giving below $100 and those giving $100-$249.99. There was a separate segment of “lapsed” donors defined as donors who hadn’t given in the last 3 to 5 years, and even a deep lapsed segment who hadn’t given in 5 years or more. Then all segments, coded for results tracking, were mailed a personalized letter and personalized reply form. Even though just starting out, results improved in terms of total donations and efficiency, with an overall cost of just $0.04 for every dollar raised (compared with an industry average cost of $0.20 cited by the blog). Plus, the nonprofit now had proven segmentation results for use in further improvement of efficiency and targeted messaging.

The Case for Increased Mail Frequency

If you don’t ask, you won’t get, but nonprofits worried about costs and donor fatigue often err on the conservative side when deciding how frequently donors should be mailed. The blog cites the case of a homeless shelters executive director who was initially against mailing more than twice a year, even though they had some 65+ homeless people that they were supporting each day. Because they needed to raise more money, they finally tried adding two more appeals per year. Of course, the added appeals increased costs, but they also increased net revenue by 32%. The cost to raise a dollar with two appeals was $0.12, and with 4 appeals went up to $0.20, yet the overall net dollars after costs rose from $51,227 to $67,590.

The Case for Tapping Recent Donors

Research shows that donors who gave most recently are also most likely to give again. For doubters, try testing a segment of recent donors (0-3 months or 0-6 months). And of course, you will want to segment out those recent donors who give the largest amounts and offer special treatment, such as an appeal with a personal note of thanks for their gift and an indication that you’re just sending the latest appeal for their information only (even though of course you’re going to include a reply envelope). However, the case study of an environmental organization shows why hesitancy to mail a donor too soon is often misguided. The organization typically mails about 5 times a year; once someone reaches the $1,000 level, they go into a personal note stream. Results show that while the 7-month-to-one-year donors deliver the most net revenue and average gift, the next best performing segment is the recent 0-to-3-month donors in terms of net revenue and average gift!

 See the complete article for useful charts and details.

Most Nonprofits Upbeat on 2019 Fundraising Growth

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The most recent survey of nonprofits and donors by the Nonprofit Research Collaborative (NRC), a coalition of professional fundraising associations, finds that 60% of respondents expect to raise more money this year than they did in 2018! That’s encouraging news for AccuList’s many fundraising clients as they head into their key year-end giving campaigns.

Tax Law Impact Not As Averse As Expected

Many fundraisers feared the new tax law would undercut giving, but the survey found that only a 17% minority reported a negative impact from the tax changes, and only 16% of donors said they would change the amount or method of their gift this year because of changes to the tax law. It is true that certain continuing tax trends prove challenging for fundraisers, such as bundling or bunching, in which donors provide multiyear support but give a large donation for an itemized filing in just one tax year and then skip contributions in the following year or years. Since most nonprofits rely heavily on year-end gifts from loyal donors, the bunching is problematic. Still, only 30% of nonprofit respondents reported that some donors were bundling.

Feared Donation Drop Doesn’t Materialize

Based on various reports of reduced giving, many nonprofits were concerned about fundraising growth, yet the NRC online survey of individual donors in March of this year found 56% said they gave the same amount in 2018 as in 2017, 33% gave more, and only 11% gave less. As a result, 63% of fundraisers said their charities did raise more money in 2018 than the previous year. Overall, 73% said they met their 2018 fundraising goals. It’s no wonder most fundraisers (60%) are confident they will raise even more in 2019. Not all charities participated equally in 2018 growth, of course. Charities with budgets of $3 million to $49 million reported the most fundraising increases in 2018 over 2017 levels. And environmental and animal charities in particular were most likely to meet 2018 fundraising goals.

Multi-Channel, Multi-Contact Strategy Remains Key

Melissa Brown, author of the report and manager of the NRC, stresses that the upbeat forecast for fundraising needs to be undergirded by targeted, relevant, engaging direct mail and e-mail contacts. While most channels remained essentially flat in 2018 in terms of dollars raised compared with prior years, direct mail fundraising growth dipped slightly, with 41% of charity respondents saying they saw growth in fundraising through direct mail compared with 50% in 2017. Overall, the survey supports both the need for a multi-channel fundraising strategy and frequent contacts with donors. On average, after the first gift, organizations send about 3 more appeals by mail, an average of 4 appeals by e-mail, and invitations to events, including stewardship/recognition activities. However, both direct mail and digital communications are most effective when they go beyond dollar demands to provide meaningful connections with the mission and explanation of the impact of a gift, per the survey “One of the biggest reasons people stop giving is they feel like they’re becoming ATMs instead of being partners,” Brown warns. See the full survey 

Print Catalogs Still a Key Multichannel Merchant Tool

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Despite the growth of e-commerce, printed catalogs retain their important marketing role for AccuList USA’s B2B and B2C catalog clients, and recent data from Multichannel Merchant‘s 2018 State of the Catalog survey highlights that trend.

Print Catalogs Boost Brands, Push Digital Traffic

A big majority of the merchants surveyed (84.2% ) by Multichannel Merchant (MCM) said they continue to use print catalogs as a channel to reach customers. Their commitment to the traditional print catalog comes from its value as a multipurpose marketing tool. For example, branding led the ranking of main print catalog goals, with an 8.86 out of 10 rating. Branding was followed by web and mobile traffic driver and customer retention (both ranked at 8.14), reactivation (7.57), and prospecting and store traffic spur (6.43).  Meanwhile, though measuring catalog effectiveness remains a matter of debate among merchants, a majority (57.1%) do have a formal measurement program, whether via matchbacks, tracking codes, response analysis or segmentation testing.

Frequency, Page Counts & Circulation Hold Steady

Although merchants continue to seek maximum ROI by testing page counts and formats, the majority surveyed by MCM (83.3%) maintained the same page counts in 2017, and 50% also reported the same circulation numbers. Looking ahead to 2018, 50% planned to increase page counts, but respondents split into thirds over increasing, decreasing or maintaining circulation size. As far as frequency, 83.3% said they would hold it steady for 2018.

Digital Catalogs Join Array of Print Formats

Most merchants surveyed (57.1%) rely on both a digital catalog and a standard 8.5X11 print catalog. But many also use a “slim jim” print format (14.3%) or, especially for B2B, annual “big books” (also 14.3%). Some retailers report they send out other types of direct mail pieces, such as small gatefolds or postcards with special offers. Digital page-flipper catalogs are also in use to reach customers between mailings and in areas not mailed (such as Europe). For more on the report, go to http://multichannelmerchant.com/marketing/state-catalog-alive-well/