Eight helpful tips for improving direct mail fundraising

• Direct mail fundraising is often counter-intuitive and the chances are that your CEO, trustees or staff will have plenty of opinions about it. But, the reality is that some of their opinions might do more harm than good to your fundraising appeals. So, here is a rule of thumb for dealing with people who mean well but who aren't trained fundraisers or marketers - don't change your appeals simply because one of them 'has a feeling that this will not work'.

• The best way to improve the performance of your fundraising appeals is to do some testing. So go ahead and test cause concepts, creative approaches, donor motivations, giving handles - then adjust your future appeals based on what you discover.

• Focus on Audience and Cause Concept first then on the Creative. When developing a direct mail campaign some clients want to focus their time and effort on getting the Creative right. Although the Creative matters, because donors are visual, understanding what motivates your audience and speaking to their needs is the most critical element of the planning process. After that, the focus should be on the Cause Concept (why the donor should give, and why now). Remember that Audience and Cause Concept account for up to 80% of the success of fundraising mailings.

• Are you hiding your ask deep in the middle of your appeal? If you are spending time and money to send out fundraising letters, be bold! Make your ask prominent and repeat it throughout the letter. And, while you are at it, make sure you are asking for a specific gift based on donors' past giving history.

• Did you know that matching gifts challenges are likely to increase direct mail response rates and total income? That's because donors love leverage. So, if you get one or more gifts from a grant making trust for a project you can follow that up with a direct appeal asking your donors to match the gifts you have received from the trust/s.

• Most people love handwritten notes, so you might not be surprised to hear that including a handwritten PS in your appeals can help to increase their effectiveness. Use handwritten notes on major donor appeals to make them more authentic and see your response rates and average gifts go up.

• Don't use generic thank you letters for your fundraising appeals - make sure you write a tailored thank you letter for each appeal instead. Use the thank you letter as a powerful tool to enable donors to experience how their gift made a difference and to show appreciation for their support.

• Stop treating direct mail fundraising as a selection of random appeals and think of it as an intentional programme for converting prospects into donors and for growing their engagement with your cause. Take time to plan your direct mail programme - jot down some key themes, provide continuity of stories and images, build upon previous appeals and take the donor on an exciting journey of changing the world through your charity. 

Is your charity using 'churn and burn' fundraising techniques?

A recent LinkedIn post by Giles Pegram on the Institute of Fundraising discussion board about 'churn and burn' practices in fundraising got me thinking about the why and how this approach to fundraising is alive and well in so many charities today.

If you don't know what I am talking about - let me explain first what 'churn and burn' is. By definition, in a charity fundraising 'churn and burn' is about bringing in new donors/ or new contacts, bombarding them with irrelevant communications and fundraising appeals in order to get the most out of them in terms of donations and then letting them go.

Most charity fundraisers I talk to would never admit that their charity practices the 'churn and burn' approach. Here are some reasons why:

Firstly, many charity fundraisers are genuinely unaware of the 'churn and burn' practices under their roof. They just don't see it. Why? Because they might be doing very little new donor acquisition thinking that the times are hard and people will not give to new charities. Often 'churn and burn' approaches are fuelled by agressive new donor acquisition efforts. The problem is that these new supporters are bombarded with requests to give more money straightaway or included in the current communications cycle that is designed with long standing donors in mind. In other words, new donors feel little or no connection with the charity and they leave.

Secondly, because they are not measuring the effectiveness of their fundraising activities in terms of the how donors give and what kind of relationship they have with the charity. They are not measuring retention/ attrition rates of their donor file or contacts/ donor conversion rates and can not see how their charity might have the 'revolving doors' syndrome. Donors enter, stay a short while and leave.

Thirdly, fundraisers are under pressure from their line managers, CEO's and Boards to meet these year's targets often expressed in total amounts raised and numbers of new donors brought in. So, short- termism becomes the name of the game - let's get the most out of these donors now for meeting today's targets but not really focusing on growing relationships with donors naturally for the long term.

Fourthly, some direct marketing agency is practicing 'churn and burn' on behalf of the charity. Some charities outsource the new donor acquisition activities or even the whole fundraising function. So, a direct marketing agency finds new donors on their behalf or does their fundraising giving the charity the money. While at face value this looks like a good proposition and can work well on many occasions. There are times when the agency, working on behalf of many clients, engages in 'churn and burn' practices to meet the fundraising targets.

Finally, although many fundraisers talk about 'donor-centric' communications what they are sending out  is generic communications pieces that don't really speak to donors' concerns or motivations for getting involved with their work. If you disagree with me just pick up one of your charity's welcome letters, newsletters or fundraising appeals. Take a look, can you find more 'you' than 'we' in these materials? Do your newsletters contain any stories about donors, about what motivates them to participate in your work? Do your appeals contain three or four reasons - from the donors perspective - as to why they should give? If you answered 'No' to these questions that your charity's communications are not donor-centric.

Here are some action points to help you start identifying any 'churn and burn' practices in your charity's fundraising and uprooting them for good:

1. Run some fundraising reports to track donor behaviour, to identify the donors who are lapsing and ineffective fundraising activities;

2. Calculate lifetime value of your donors and start including the numbers of multi-year donors, new donors, reactivated donors etc in your fundraising reports for your CEO and other senior leaders.

3. Start educating your CEO and your Board about the importance of building long term relationships with supporters and the pace of such relationships, in that they do  not happen overnight.

4. Evaluate your communications standing in donors shoes. Show your appeals and newsletters to a group of friends and ask for their honest opinions. Do they understand what you are saying? Are they moved by your stories? Would they support this charity? Would they be impressed by your thank you/ welcome letters?

Please feel free to add any more points to this list...

Four simple steps to get a second gift from a new direct mail donor

Our Fundraising Fitness Test often shows that a typical charity loses over 60% of their first time donors acquired via direct mail. Often charities put a lot of money and effort in acquiring first time donors and somehow they lose most of them through the ‘back door.’ Often the main reasons for such high attrition rates are failing to treat new donors in a special way and not asking them soon enough for a second gift.

If you want to increase the percentage of new donors who make a second gift to your charity here are four steps you can take:

1. Thank new donors in a warm and personalised way for their first gift.

2. Send them a welcome pack. Tell them why they are a valuable part of your organization. Your welcome package should include: a welcome letter, a general brochure, your latest newsletter or magazine, and a basic questionnaire to help you get to know these new donors. Make sure you don’t overwhelm them with too many things.

3. Show new donors how you are using their gift to change the world. You can do this most effectively with a donor-centred newsletter or e-update containing a few inspiring stories of how you are putting their gifts to work.

4. Ask for a second gift within three months of receiving the first gift. Many charities leave it too late to ask for a second gift and they lose 65% of the new donors in the process. The longer you wait, the less likely you are to secure that all-important second donation. So, make sure you have a good fundraising package you can use to secure a second gift from your donors.

Do these things consistently and see your new donor retention rates go up from one year to the next.

10 simple truths about direct mail every fundraiser should know

Despite the rapid growth of online communications direct mail remains one of the essential tools in a fundraiser’s tool box for acquiring new supporters, soliciting support from present donors and strengthening the relationship between a charity and its donors.

Here are some basic truths about direct mail that can help you make the most of this fundraising and donor cultivation tool:

1. Charities that raise most money from direct mail are those that have a focused direct mail programme rather than an eclectic collection of appeals.

True measures of fundraising success are not the response rate or total income of any mailing but rather an increase in the total number of gifts compared to previous years and overall income generated through direct mail.

The question is: What would you do to ensure that donors increase their giving frequency and the amounts they donate to your charity?

Well, one thing would be to vary the copy and design of your fundraising appeals, to make them more interesting and appealing to your supporters. Another thing would be to allow for adequate amounts of time between different mailings so that donors have time to respond.

2. Fundraising appeals work best when there is a letter, a response form and a reply envelope. These three elements are essential and other additions to your appeal packages are likely to reduce rather than increase response rates.

However, it is important to note here that the letter enclosed in the appeal pack should contain a simple and straightforward ‘ask’ – a direct invitation to the donor or potential donor to make a contribution to the charity. I know this seems obvious but too many appeal letters hint at ‘the ask’ but fail to issue a straightforward invitation to give.

3. Thanking donors promptly and warmly is a key factor in ensuring the success of a direct mail programme. Showing appreciation for their contributions helps donors to bond with your charity and makes them feel they are partners in your work rather than ‘walking cheque books’.

4. A charity’s donors are more likely to stop giving because they have not been asked enough not because they have been asked too often! Some charities are reluctant to ask their donors more than two or three times a year fearing that they will stop supporting the charity if they are asked more often.

In our opinion, such fears unfounded, unless they are backed up by statistical data of increased donor attrition over a period of time caused by increased frequency in appeals.

Knowing how many ‘asks’ are right for your charity is not something that can be decided by looking at other charities but by testing the frequency of appeals with your database over a period of time and carefully tracking your donor’s attrition and retention rates.

5. Integrating newsletter and annual reports in a charity’s direct mail programme is likely to increase the overall income. Well-written and designed newsletters, magazines or annual reviews enable donors to see the bigger picture of what your charity is doing and encourage them to continue their involvement with your work.

Showing appreciation, gratitude and offering examples of how donor’s gifts have made a difference can sometimes be an excellent way of generating additional income without direct solicitation. However, in order to achieve this - your charity’s communications should be donor-centric rather than programme or charity-centric.

6. Brochures, DVDs or other materials included in fundraising appeal packages are likely to reduce rather than increase response rates. Sometimes, senior leaders of the charity insist that a particular brochure should go out with the fundraising mailing to reinforce its message. On most cases however, producing that additional piece slows down the process of getting the appeal out on time, adds to the appeal costs and the increase in response rates barely justifies the money spent on them.

7. Good fundraisers give donors opportunities to give whatever amount they chose be it £2,000 or £20. A fundraising appeal is in essence an invitation to participate in making a difference in the world through a particular charity’s programmes or activities. That is why fundraising appeals should contain opportunities for different types of donors to give at the level they chose.

Successful fundraising programmes contain different types of appeals for different segments of the database asking for varying amounts of support rather than one size fits all!

8. Emergency relief appeals are likely to generate more income than appeals for ongoing programmes or for general funds. This is understandable since the emergency appeals have an element of urgent response and are often responses to disasters, etc. However, regular giving appeals or annual membership renewal programmes have higher retention rates and contribute towards creating higher donor lifetime value.

Here is a challenge for charities involved in emergency relief work that they need to invest in increasing the number of people giving regularly to their work rather so that they can retain their donors for the long term.

9. Few donors who join a regular giving programme are likely to upgrade their gifts after a period of time. Data from your charity’s database is likely to confirm this trend – and show that further mailings to these donors to increase their giving are not likely to produce high response rates.

However, the good news is that those donors who increase their giving help offset the loss from donors who stop giving or decrease their support.

If most donors are not likely to increase their giving then it is important to ensure that your regular giving programme invites them to donate adequate amounts rather than the smallest amounts possible.

10. If you are mailing less then 10,000 contacts testing different variations of appeal packages using random segments is not likely to produce statistically valid differences in response rates.

This does not mean that you should not segment your database and use different types of appeals with different donor segments. What we are saying is that if your database contains less than 10,000 contacts you should not spend time or money unnecessary to test for example the size or colour of the outer envelope of a package with a relatively small random sample.

However, if your charity mails more than 10,000 at any given time then testing variations of fundraising packages with random samples of the database is likely to produce statistically valid results, help you reduce costs and increase the effectiveness of your fundraising appeals.