Missing Out: Smaller Organizations and Direct Mail
Last month we surveyed Agitator readers in an effort to answer three questions:
- Are smaller nonprofits taking advantage of the power of postal mail/direct mail?
- Do they understand its financial potential?
- If they do understand its potential, why aren’t they using more direct mail/postal mail?
The survey answers, in a nutshell, are:
- Smaller organizations are not taking advantage of the power of postal mail.
- 20% of the respondents felt that most organizations are unaware of the difference in response rates between digital and postal mail. But…assuming the other 80% are more or less aware of the greater financial potential of postal mail, why is it that 33.3% of the respondents feel that “smaller organizations are making too little use of postal/direct mail”?
- In priority order here are the reasons why smaller groups are not taking advantage of the power of postal mail.
- “Too expensive”
- “Management believes we can do it all online.”
- “Too much hassle with the logistics of printing and mailing”
- “Don’t have time”
- “Don’t know enough about how to use direct mail.”
Who Cares?
For those of us who care about the well-being and growth of smaller organizations, these findings are deeply disturbing. Given the fact that a recent Direct Marketing Association (DMA )study noted that average response rates from direct mail at 4.4% are a whopping 37 times higher than average email marketing rates at a mere 0.12%. Other studies show the same disparity although the open, click-thru and response rates vary slightly.
As I noted in the post launching the survey—and using far more generous assumptions for digital than did the DMA study, if an email to donors has on average a 20% chance of being opened and a postal mail letter a 50% chance… and if the response rates average about 0.5 percent for an email while a printed letter delivered to the donor’s home enjoys a 4% response rate, that’s quite a difference in results.
Assume the average gift for both channels is $30. An email to 1000 donors, assuming no cost, but a .05 percent response rate will produce $150 from those thousand donors. The direct mail letter assuming it costs $750 to reach those thousand donors with a response rate of 4% will produce a total of $1200 minus the $750 cost of the mailing for a net income of $450. For a group with 10,000 donors that’s a $2,000 difference in favor of postal mail.
It seems obvious to me which channel is preferable. But there must be reasons why many organizations don’t take advantage of this. Thus, the Survey.
Says Who?
We asked Agitator readers to respond and 42 did, including 24 were staff members of smaller organizations (under $3 million in revenue), and 10 were staff members of larger groups with $3 million or more in revenue. The remaining 8 were consultants who counted smaller organizations among their clients. Not a scientific sample, but helpful in shedding light on what I consider a critical issue.
First, Some Basic Impressions
- The average number of email appeals or appeals by other digital channels per year by smaller nonprofits: 9
- The average number of postal/direct mail appeals per year by smaller nonprofits. 43% of respondents felt smaller nonprofits made “too little use of direct mail” compared with 2.3% who felt smaller nonprofits made “too little use of email”.Another 31% said the use of postal mail “varies widely from organization to organization, while 19% felt that most organizations “are not aware of the difference in response rates” between postal and digital.
- The highest use of postal mail by smaller nonprofits by order of ranking or more of these activities:
- “Thank You Notes”
- “Tax Receipts”
- “Appeals”
- “Annual Support renewals”
- “Reinstatements”
Thanking Donors
On the all-important and top priority issue of Thanking Donors here’s an estimate of the percentage of smaller organizations that send postal thank you letter or notes according to respondents:
- 26% of the respondents reported that only between 0-20% of the organizations they were familiar with thanked their donors via postal mail;
- 36% reported that only 21-50% of the organizations thanked their donors via postal mail;
- 19% reported that between 51% and 75% of the organizations they worked for or with thanked their donors with thank you letters or notes.
- A shocking (at least to me) only 17% reported that only 75% of the organizations they worked thanked their donors using postal mail.
A few of the comments made by respondents regarding postal Thank Yous are instructive:
“They often laugh when I suggest this–at the prospect of how much work it would be–refusing to consider how it could be managed.”
“Handwritten thank you notes seem to be the most common form of acknowledgment from smaller orgs. But they are really not very good at anything else.”
“I don’t know about other organizations, but we send a paper thank you letter to everyone who donates, as well as a personal email thank you to those for whom we have email addresses.”
“Many small orgs prioritize thank you letters. They don’t have the sophisticated systems that allow them to use the email confirmation as a thank you.
[ View the Dashboard with all the survey responses here]
Favorite Excuses?
As mentioned earlier, the primary reasons for avoiding the use of postal communications seem to be, in priority order “Too expensive” … “Management believes we can do it all online” …
“Too much hassle with the logistics of printing and mailing” …
“Don’t have time” … and “Don’t know enough about how to use direct mail.”
Right there, in the paragraph above, is a summary of why so many smaller organizations are leaving so much money on the table, disappointing so many donors and putting their missions in danger. Frankly, it’s less a condemnation of the fundraisers who staff small organizations than it is an indictment of a vendor/ leadership/training system that has failed them.
Take the single, simple issue of thank yous. Study after study, experience after experience, case after case has shown that a prompt, heart-felt and personal thank you letter or note delivered by mail builds donor satisfaction, loyalty and, yes value.
Yet, many somehow believe that thanking a donor “is too expensive” –a cost center. Why in the world would any thinking CFO, CEO or board fail to approve spending $1.50, $2 or even $5.00 thank a donor whose lifetime value is likely to be somewhere between $350 and more than $1000 – if she/he is properly treated?
Why do we tolerate “don’t have time” or “too much hassle” as excuses when we should be demanding of our Constituent Relationship Management (CRM ) vendors that they provide a simple one-click system for sending a personalized thank you note directly from our desktop onward to an offsite printer and the post office at less cost than an overworked and time-constrained staff?
Why do we accept “don’t know enough about direct mail” as an excuse when best practices for thanking donors can be incorporated into easy-to-use templates prepared by experts?
What smaller organizations need is fewer glow-in-the-dark magic New Things and more help in making execution of the seemingly complex basics far simpler and more inexpensive.
Roger
P.S. Thank you to those Agitatorreaderswho took the time to complete the survey and also to those readers who responded to the original Survey Request. Their comments are well worth re-reading.
P.P.S. I also want to share, at length, this thoughtful comment we received from a respondent to the survey. Talk about truth-tellers. Thank you ….
Roger, thank you for tackling this urgent issue. What I see in my own org is very disturbing. Direct mail is being systematically choked-off by a combination of rumor/opinion (NOT FACTS) that goes like this: “It’s too expensive (hmmm…maybe if you are producing a 4-color piece on 100 lb. stock); cumbersome (too much lead time required); email is easier and cheaper; no one reads or responds to DM anymore (um, especially if you don’t send it!); everyone does everything online nowadays; and don’t get me started on the ridiculous millennial argument.
“To make matters even worse, we have painted ourselves into a corner by deciding that since DM is “so expensive,” we will only send it to our top prospects (LYBUNTS, SYBUNTS) and cast everyone else into the email pool. Thus, we have an ever-larger swath of our file that hasn’t had a piece of DM from us in over TWO YEARS; we’re creating a self-fulfilling prophecy. And the mail that we DO send is not a straightforward ask but usually involves a gimmick of some kind (4-color magnets, anyone?). Lost in all this is any focus, AT ALL, on the message and the ask. They have become secondary to the delivery system. And we are fully infected with the “what’s important to US” disease. Our most sinful confession: we NEVER send personalized response devices, only generic wallet envelopes — you know, the ones that are supposed to cover EVERY situation (planned to give, matching gifts, IMO/IHO, IRA rollovers, etc.).
“Suffice it to say we never measure response rates; no one ever asks (!)
“…Our focus is almost EXCLUSIVELY on major gift fundraising, and we’ve had some success. It’s just not dawning on anyone that we aren’t building the pipeline anymore. We are systematically drying it up. The ONE thing we are doing RIGHT, and it’s an important one, is turning around personal snail mail acknowledgements within 48 hours that are carefully tailored to mirror the donor’s intent and reinforce the value of their gift. Does this mean editing individual letters? Yes, it does. In my view, having too much volume to continue doing this would be a GOOD problem to have….
“I need to be anonymous, but I hope these comments will be useful…I suspect you will hear lots of similar stories from people in situations like mine: a person with loads of old-school experience who is not in a position to press for what I know to be the right decisions. So yes, I do think you are onto something in designing turnkey solutions that would remove some of these roadblocks. I look forward to seeing the results of the survey…”
17 responses to “Missing Out: Smaller Organizations and Direct Mail”
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Roger, thank you for highlighting this issue with small nonprofit organizations. This is a problem I’ve noted with my own subscriber base for the past few years. One of my subscribers wrote recently to say that they’d dropped direct mail three years ago and gone solely digital. The result? They lost 2/3 of their donor base.
But I don’t know that it’s an “indictment of a vendor/leadership/training system that has failed them.” Rather I see it as both the reluctance to invest in direct mail, and that old chestnut, the next bright shiny object. Fundraisers are more excited about Instagram’s new donation stickers or how to use Canva to design their invitations. The nuts and bolts of direct mail execution and writing thank you letters? They can’t be bothered.
You note: “What smaller organizations need is fewer glow-in-the-dark magic New Things and more help in making execution of the seemingly complex basics far simpler and more inexpensive.”
We offer plenty of training in the fundamentals — inexpensive too — including direct mail. Right now, we’re offering a 5-week series on creating and implementing a fundraising campaign, focusing on direct mail. It includes trainings from Lisa Sargent and Denisa Casement. They’re the powerhouse duo behind one of the most successful direct mail case studies over on SOFII. Here’s just one of the students from a past training: https://www.pamelagrow.com/9384/whats-mailbox-thats-donation-important/ (that’s from a regular blog series: What’s in my Mailbox, focusing on direct mail).
Roger, while undoubtably alarming, everything you say resonates with what we see over here in the UK too. The dazzle of digital seems to have blinded fundraisers to the workhorse of their trade. Thanks to Pam for highlighting the experiences of Lisa and Denisa whose results should convert even the most die-hard dm deniers. http://sofii.org/case-study/lessons-from-merchants-quay-ireland. But I don’t understand the comment, “Don’t know enough about how to use direct mail.” In 2010 the legendary Jerry Huntsinger gifted his 57 Tutorials to our profession and they’re all on SOFII 24/7, for free. http://sofii.org/the-fundraisers-toolbox/jerry-huntsinger-tutorials. The strange thing is that case histories of effective direct mail are plentiful and a dm acquisition campaign just won the IoF’s award for delivering the best donor experience. Truly, there’s none so blind as those who will not see.
Pamela and Ken point to some great resources that every small organization can and should take advantage of. (Ken, I began learning to write for donors with Jerry Huntsinger’s MAILED newsletter a zillion years ago. Wish I still had them!)
Direct mail really needn’t be scary for a small shop. In fact, it can be their secret strength. When you’re mailing to a thousand or fewer donors, you can take the time to make those much more personal.
My advice to those who think mail is too hard? Go read SOFII. Find yourself a great mail house who can really be your partner and help you save money. And start making your donors feel like people, not names on a list. You will start raising more money!
Hi All,
This morning I went to a workshop on using data well in fundraising. Like much of what you write above it leaves me feeling sad and inadequately prepared to tackle DM in any meaningful way. We’re too big not to consider this income stream, too small to have the financial heft and database size that means we’d at least have an in house resource.
We are a small org (turnover c. £750k last year, 18 staff, mostly part time) and it’s another thing to add to the extensive list of where we could and should improve our fundraising.
At the risk of sounding defensive…
Roger: You say ‘What smaller organizations need is fewer glow-in-the-dark magic New Things and more help in making execution of the seemingly complex basics far simpler and more inexpensive.’. Seemingly complex? To the uninitiated DM is a dark and mysterious art purveyed often by expensive magicians who baffle us so much that we never believe we can recreate even the smallest portion of what we are told without purchases beyond our means. A least Facebook comes with a help section!
Ken: We do see, but many of us cannot yet reach.
The reality for my org? We do ‘thank you’ really well and promptly. Postal asks? Only with our annual review.
We do invest, but it’s been more efficient to invest in community and trusts fundraising staff.
Roger: My question is this. If you believe we have been let down by the leadership, training and vendors who could help us, beyond the couple of small practical examples above, what needs to happen to change that? Unless the ‘experts’ are willing to build relationships and work with us smaller scale orgs, in a way we can afford and understand, then it is unlikely to change.
Sometimes the reasons noted in the article are not simply ‘excuses’ about our lack of technical knowledge and budget but a sad and frustrating reality for us too.
Hi Virginia,
Your comment so well expresses the frustration so many feel. As both Pam and Ken point out, there’s good advice and help readily available for relatively little time and cost, but that opportunity has to be seized by fundraisers themselves.
When I say small organizations have been let down by vendors, leadership and training I am NOT criticizing those consultants, coaches and colleagues who work hard to offer this practical and valuable help. My concern goes to the fact that the fundraising trade is basically one without standards when it comes to a basic set of requirements and practices.
TRAINING. There are no educational/training standards or requirements to become a fundraiser. Most states here in the US require training/licensing for cosmetologists, none requires the same for fundraising. Consequently, in the absence of serious training and standards is it any wonder why some boards and CEOs have little understanding or respect for “fundraisers’? This lack of respect/understanding translates into an unwillingness to invest continuing education for fundraising staff, heeding the fundraisers’ advice, and taking that advice as seriously as they should, etc. etc. Faced with a lack of respect and appreciation more than half of all fundraisers abandon the trade after 5 years.
VENDORS. Here I’m thinking mainly of the CRM (Constituent Relationship Management) vendors and allied tech vendors who could — but mostly don’t –make the basic tasks of managing and using data simpler for time-starved fundraising staffs. For example, the basic task of updating postal addresses and removing deceased donors takes hours with most CRMs. Consequently, many, many fundraisers simply ignore the task thereby losing valuable donors and significant dollars.
Automated donor data updating is simple and inexpensive, yet only one CRM that I’m aware of (Bloomerang) offers a one-click, automatic service free of charge as part of its basic subscription.
The same could be done when it comes to segmentation, asking amounts and dozens of other tasks, reflecting expert best practices, could be built into the systems saving fundraising staffs hours of time and dramatically improving results.
LEADERSHIP. None of the above will or can happen in the absence of leadership with an understanding of what fundraising is, why it’s important and the desire to properly invest in it. I wish I had a ready answer for “fixing” this problem, but I don’t. Shaming doesn’t seem to help. Preaching and proselytizing does little. Perhaps money would speak louder. What if grant-making foundations can help by demanding more from the nonprofits they invest in? Same with major gift donors who understand the value of capacity-building. Or what if Regulators required more training, more standards before they let nonprofits loose to solicit the unsuspecting public.
All these solutions will take time; all will face the usual resistance of the status quo. But, we must keep pressing for change. Until then, Virginia, as Ken notes, self-belief, courage and a determination to take advantage of what’s already out there is the most productive post.
Again, thank you for your comment.
Roger
Hi Virginia,
I wish you (and all Agitator readers) could come to the IoF conference on the supporter experience, 16th Sept in London. You’ll hear how a tiny arts organisation about the same size as yours moved from a donor list in the low hundreds (unchanged over 10 years+) to now nudging 4,000, in just 18 months. It took a bit of risk and investment. If they keep it up they’ll break even inside two years and achieve financial security in just five, doubling their current net income. Legacies and other benefits are already happening. I’m not saying this journey was easy or quick, but the lessons are there, and certainly Virginia you could do it, I know. It does, however, require a bit of homework, plus determination, application, self-belief and courage. Plus an enlightened board and SMT. But it’s so, so copyable. It’s nothing more radical than direct mail, done well.
Roger,
And what about comparisons to social media? I’d welcome seeing those figures so that I can share them with clients who believe that FB campaigns will take care of it all.
Sophie
Hi Sophie…
Check out Nick’s August 9 post Focus on Facebook ( http://agitator.thedonorvoice.com/a-focus-on-facebook/) and you’ll find some mighty helpful information you can share.
In short, when it comes to fundraising right now Facebook is is a tiny fraction of online giving which, in turn, is a small fraction of overall giving. BUT…as Nick points out, some interesting uses of Facebook are beginning to emerge.
Roger
Roger, you deserve another Agitator Raise.
Great insights Roger. There are some good options for smaller shop consultants out there . . . there just aren’t enough of them. Ann Monnig does a great job managing direct mail for some DC-area regional groups including Capital Caring, Food & Friends, and JSSA. We love partnering with her to provide the copy. But there is MORE opportunity for consultants who want to take on a few clients of their own and it’s good work.
While it’s true that the production vendors don’t love a client that’s mailing under 10,000 pieces, when they are working with an experienced consultant, they will do it. Finally, for any small shop that’s trying to make the case for investment in direct mail, I highly commend this Harvard Business Review article by Dan Pallotta. Every Executive Director and Board member should read it.
https://hbr.org/2012/02/multiplication-philanthropy.html
I cannot agree more that Thank You notes are a great investment. We’ve been offering an automated Thank You and Receipt solution for a couple years. https://primedata.ca/responsivereceipt/
The platform is available for US, UK and Canadian mail direct deposit.
Drop a data file on the ftp and off go your templated receipts and thank you notes within hours. Track it and in a few months you can see the improved results of engagement and lifetime value and justify using this valuable tool in the fundraising kit.
Apologies for the self promotion but it seemed so fitting to respond here where this is so sincerely discussed.
Ken and Roger, as always I appreciate your considered responses. And, I’m not going to disagree. I’d love to respond properly but as I’m sitting at my desk surrounded by reams of paperwork for funder reports and my team are long departed for the day, the problem presents itself neatly. Like many small orgs it comes down to capacity IMO. Capacity to learn, capacity to invest, let alone capacity to give the time needed. We make choices and sacrifices, perhaps (and probably) foolishly.
One quick thought re Leadership: Yes! I will shout from the rooftops about the need for professional learning and qualification. I’m delighted that the IoF in the UK is becoming chartered. It will do much for all of us working here to have access to improved, structured and recognised qualifications as well as building respect for the profession amongst board members, the public et al. And yes, it will take time. Anyway, I’m off to dream of the simpler days of dealing with major gifts….
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hi, what a great discussion this is! I’m actually one of those consultants who has been working with smaller organizations for 16+ years now on their direct mail and monthly gifts (small donors with some upgrade approaches) and it has really helped them, not to mention the direct mail education my clients get.
Also, there are a few training opportunities for those who want to learn more about direct mail. The key here is they want to learn as so many of the younger fundraisers especially are simply not interested because they don’t tend to think it worthwhile but definitely do yourselves a favor and take some webinars (as mentioned earlier, lots of donor base folks offer free or low price webinars and user conferences), or check out http://www.charityhowto.com for training on writing dm and nuts and bolts stuff and check out http://www.dmfa.org and http://www.dmaw.org for the Bridge conference, DM101 etc.
I am still learning every day and there’s plenty of learning to take in, if you want to!
Excellent article and comments. Harsonhill Inc been in the DMM UK market since 2005. Experienced always holds to the truth that direct mail is always the ‘control’ and your article proves it once again. GDPR to be respected by all but charity’s must refresh house files and DM for acquisition is a must! ROI proves it again & again. Thank You .
Hello Roger. I enjoyed and appreciated your recent article on smaller nonprofits not taking advantage of postal mail. That’s a concern of ours at the Alliance of Nonprofit Mailers. I wanted to let you know about a solution in case you’re not aware of it. The company Click2Mail was started by a former colleague of mine, Lee Garvey. When Lee and I were at USPS headquarters, there was a push in the 90s and early 2000s to enhance the mail with digital components. Lee started and ran a service call NetPost Mailing Online at USPS. It enable people to do direct mailings from their desktop computers. When the bubble burst, the USPS mandate was to focus on the “core” which was hardcopy mail delivery only. So we ended most of our digital initiatives, including NetPost. Lee left the Postal Service and started his company which continues to be successful. While most of his customers are small businesses, Lee has a great ability to help nonprofits get into the mail and do their mailings from their own computer. Lee has developed a process to help nonprofits get their first nonprofit mailing permit. We’re both looking for ways to make more nonprofits aware of Click2Mail.
[…] last week, The Agitator published some survey results regarding direct mail and smaller organizations, and they’re worth checking out. Through a three-question survey, Roger Craver and […]