Direct Mail Fundraising Solutions for Non-Profits
What Is Direct Mail Fundraising?
Direct mail fundraising refers to the process of acquiring new donors as well as maintaining existing ones by sending them printed solicitation letters via regular mail. Despite the widespread use of e-mail and other forms of digital communication, direct mail is still seen as one of the most effective methods for nonprofit organizations to raise funds.
One of the reasons nonprofits continue to use direct mail is that the costs of sending solicitation letters to donors are seen as relatively low in comparison with other methods, although it has become less cost-effective in recent years. Typically, sending direct mail solicitations to new donors has a rate of return of only fifty cents for every dollar spent. However, in the long term, direct mail is seen as effective in building a relationship with a donor that can result in their giving repeat donations over time.
About Direct Mail
- Direct mail refers to any print-based material used for fundraising, including addressed mail, insets and door-drops, which are mainly sent through the mail.
- The advantages of employing direct mail fundraising solutions are that they’re an affordable way to reach donors, while still communicating with them essentially on a one-to-one basis to make your appeal.
- You can save money on your direct mail fundraising campaign by availing of bulk mail rates from the US Postal Service. You can qualify for these commercial rates by following USPS guidelines for bulk mailing.
- The heart of any direct mail fundraising campaign is the mailing list. You can generate a list by compiling a list of prospects on your own, by buying a list from a list broker or by borrowing a donor list from another nonprofit group.
- One important factor to consider in managing your direct mail fundraising campaign is deliverability, which refers to the certainty, predictability and speed of mail delivery.
- You should also run tests on your direct mail letters by testing different variables to determine the effect it has on your fundraising results.
Direct Mail Fundraising Statistics
Direct mail continues to be a popular and effective method of fundraising, despite claims to the contrary. At the same time however, it’s important to keep your expectations realistic. Donor acquisition mail, or mail that’s sent to people who have not previously donated, yielded a response rate of only one percent. However, once they have become donors, then response rate grows to 3.7 percent.
The highest response rates are from older people aged 55 and up, as expected. However, all age groups have shown that they’re open to giving in response to direct mail appeals. But non-profits should also make it easier for them to donate by allowing them to give online, since 35% of donors said they prefer this method of donating. 50% of Millennial and Gen-Xers in particular said they donate online in response to direct mail appeals.
Types of Charitable Organizations
When we talk about charitable organizations, we’re generally referring to publicly supported organizations whose funding principally comes from the general public, government sources or other charitable groups. At least one-third of its support must come from these public sources, and thus, they’re expected to solicit funds from these sources for their operations. These groups can be roughly broken down into six general categories:
- Animal charities, including animal welfare and wildlife conservation groups.
- Environmental charities that include nature centers, parks, and environmental protection and conservation.
- International non-government organizations which are based in a particular country but have operations in others, and which include disaster relief, international development, and human rights groups.
- Health charities include medical treatment and care, medical research, and patient and family support.
- Education charities that include not only educational institutions, but also financial aid and scholarship, experimental education, and school reform.
- Arts and culture charities that include historical societies, museums, performing arts groups, public broadcasting, and libraries.
The Difference Between Annual Fund Appeals and Major Campaigns
When it comes to fundraising, there are two terms that you should avoid using interchangeably – annual fund campaigns or appeals, and major campaigns. The difference between the two is as follows:
Major campaigns are those that are intended to raise a certain amount of money that will be used for a particular purpose. For instance, a university might start a campaign to raise money to modernize its old facilities or to build new ones.
Annual fund appeals, on the other hand, are conducted on a regular basis and used to raise money for a non-profit’s operations and other recurring expenses. Holding an annual fundraising does not mean that the charitable organization doesn’t raise money throughout the year, but rather it’s intended to mobilize donor support. Donors are regularly reminded of your needs and thus, this can establish habitual giving habits in them.
Annual campaigns can also bring in new donors to replace old ones, as well as tracking giving in order to identify which donors can give more, or can be encouraged toward greater involvement in the organization.
Categories of Donors
Individual donors are private individuals who have chosen to donate for various reasons. It’s very important to cultivate them since collectively, they will account for a big percentage of your yearly operating income. While they may donate in relatively small amounts, they can be counted on to continue donating on a recurring basis.
Major donors are those who donate large sums to the organization, either on a recurring basis or during special campaigns. It may take years to cultivate them before they decide to give, so each should be assigned to a particular officer or board member of the group to steward them.
Corporate donors will usually not donate for philanthropic purposes, but for public relations or marketing purposes. Thus, they expect their gift to be acknowledged with a press release, donation presentation photo, or other type of publicity opportunity.
Foundations are organizations established with funds donated from individuals or groups whose purpose is to give funds to others in the form of grants. Organizations typically appeal to them for grants by submitting proposals during rounds that are held once or twice a year.
In addition to these donor types, nonprofits should also pay attention to prospects. These are people who have not yet given, but are prime candidates to donate, and thus should be targeted through mailings.
What Is Stewardship?
Stewardship involves the interaction of a non-profit with a donor after they have given a gift that helps ensure a long-term relationship with them. It has four elements:
Gift acceptance. Before the organization accepts the gift, it must ensure that the intentions of the donor and the needs of the group are in agreement. It also includes procedures for managing donations to ensure that they’re used based on the donor’s intentions, as well as creating structures for donating opportunities.
Donor acknowledgement. This involves creating and implementing procedures for expressing gratitude to donors in a timely manner. It includes providing a receipt that is in accordance with IRS requirements, as well as acknowledgement of the gift through letters, personal visits, and phone calls.
Donor recognition. This element involves opportunities for publicly recognizing the donor based on their preferences. This may include naming spaces after donors, donor walls, donor profiles in newsletters and other publications of the non-profit, and external publicity through public events and press releases.
Reporting. This element provides donors with information on the impact of their gifts, as well as demonstrating the organization’s fiscal accountability by showing how the donation was used responsibly and prudently. Reporting can be through print or digital means, i.e. as an impact or financial report, or be personalized for a particular donor.
A certain amount of donor loss is inevitable over time – donors die, lose interest, or no longer have the means to give. This is why nonprofits have to work at retaining existing donors, since these are a valuable resource that represents the bulk of their annual income. According to statistics from the 2016 Fundraising Effectiveness Project, for all reporting nonprofits, the median donor retention rate was 46 percent. This means that in 2015, less than half of the donors who had donated the previous year decided to give again.
You can help increase this retention rate by improving your relationships with your donors. For instance, you should promptly acknowledge a gift with a thoughtful personalized response, and continue to thank them for their support. In addition, you should look for non-monetary ways for donors to engage with your advocacy, such as providing opportunities to volunteer or holding events such as tours that allow them to see where their money is going.
Housefile and Prospecting
There are two main categories of direct mail solicitations: housefiles are letters that are sent to existing donors, while prospecting letters are sent to prospects who have never given to the organization, but are seen as promising candidates to become donors. You should send housefile letters on a regular basis, i.e. at least once a year, to remind donors that you need their gifts to sustain your operations. However, you should avoid the pitfall of over-soliciting by sending letters too often. You should also mix in some cultivation letters such as newsletters and Christmas cards, in order to maintain a donor relationship that’s not purely based on their monetary support.
While it goes without saying that housefile letters are expected to provide the best results, prospecting letters are seen as more challenging, since you’re getting in touch with a person who might have never heard of your organization and thus, may not be inclined to be a donor.
It’s a vital aspect of donor relations that you maintain your relationship with them by staying in touch. This means that you should be sending them material that’s not directly related to asking for donations, but which shows that you appreciate their support and are committed to keeping them informed about what your organization is doing, and how their gifts are being used.
The most common method of cultivating a relationship with donors is by sending them newsletters. These should contain updates about the organization’s current activities, but may also include features targeted directly to donors such as acknowledgement of donations and birthday greetings. These can be sent as print material or through e-mail, depending on the donor’s preference.
Of course, you should also send cards during Christmas, but, more importantly, on the donor’s birthday. This will send the message that you’re thinking of them as more than just cash machines. The cards should be handwritten and personalized to the donor as much as possible.
Writing an Effective Letter
Here are some elements you should pay attention to:
- You should make sure that the letter sounds as if you’re communicating directly with the donor. The salutation should include their first name, and you should include personalization touches such as mentioning their name and town in the letter body.
- Although the accepted standard for readability is a font size of 12, you should consider increasing it to 14 for older donors. In addition, paragraphs should be kept short (three sentences per paragraph average, and line length of around 70 characters) and consider using boldface or italics to highlight key points.
- Appeal to the donor’s emotion by telling a story about the recipients who will benefit from their gift, and the impact it has made on their lives.
- Take the opportunity to express gratitude for the donations the contributor has given in the past.
- Tax deductible. Remind them that charitable contributions entitle them to deductions that will result in tax savings.
- Include a P.S. The P.S. should sum up your letter and allow donors to quickly get the gist of the most important information, i.e. a short summary of how their gifts will be used. The P.S. should also include the deadline for donating.
Hiring a Fundraising Consultant
If you’re having trouble successfully fundraising for your organization, you may be considering hiring a professional consultant to help you with the process. The advantages of using a fundraising consultant as opposed to trying to do it in-house include:
- They can bring their expertise and experience to your fundraising efforts, increasing the chances for success.
- They can bring a fresh perspective on your previous fundraising efforts, allowing them to identify weak points that may not have been apparent to you, so they can be corrected.
- They can devote themselves full-time to your fundraising campaign, allowing you and your staff to focus on daily operations and other important tasks.
- They can train your staff in fundraising techniques that have been proven to work, so that they can be applied by your organization in future campaigns.
- They can provide you with fundraising resources, such as dedicated software, that you may not have been aware of and which can help you in the future.
Hiring a Direct Mailing Company
Direct mailing companies can help make the process of fundraising via physical mail easier, allowing your organization to focus on fulfilling its philanthropic mission. They specialize in managing bulk mailings by using automated systems and can send all types of physical mail including letters, postcards and even checks.
The advantages of using a direct mailing company include:
- Assuring high deliverability rates. By efficiently routing each piece of mail, the company not only can assure maximum deliverability, but also optimal speed of delivery.
- Handle all aspects of direct mailings. They can print the physical letters in addition to mailing them, and even save you money on bulk mailings by ensuring that they meet the guidelines of the US Postal Service.
- Help you reach your target audience. They can provide you with options for tailoring your mailing list, such as targeting a particular zip code.
- Consult with you to ensure that you have the best direct mail strategy. They can provide you with assistance in designing letters and even let you lease or buy their mailing lists.