Direct Mail Yields Major Gift Donors
On Monday we reported on the American Cancer Society (ACS) and its project over the past year to re-examine the role of direct mail in its fundraising program. ACS is committed to a sophisticated multi-channel marketing approach, in which direct mail remains a key work horse, and in which the full potential value of each donor (financial and otherwise) is recognized.
Here’s a bit of analysis from our friends at Analytical Ones that confirms a key payoff from direct mail acquisition programs.
The following graph shows the percentage of active FY14 large gift donors for a national organization whose first gift was attributed to direct mail acquisition. One-in-six of first gifts from $2,500+ donors was through traditional direct mail acquisition, as was one-in-four of first gifts from $1,000-$2,500 donors.
The folks at Analytic Ones observe: “Think of it another way, take away direct mail acquisition and a significant chunk of your future large donors will also go away.”
In other words, you need to recognize (especially when making investment decisions about your direct mail acquisition), the full potential of your acquisition program as a feeder track for major gifts.
Direct response fundraising was part of my portfolio when I ran marketing and communications for Environmental Defense Fund (EDF). I was fortunate to have as an astute colleague Paula Hayes, who ran our very effective Development shop. Paula was always a supporter of direct mail investment. She saw the fruits of the program in terms of major gift prospects.
So Paula and I had the luxury of quibbling over whether direct response donors got handed over to Development at the $5,000 or $10,000 level. Such problems!
And now, of course, the tools for spotting major gift prospects in your ‘small gift’ donor pool are even better.
So, to your direct mail folks … make an ally of your Development chief!
Tom
4 responses to “Direct Mail Yields Major Gift Donors”
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Tom, this is what I would call thinking holistic fundraising. How all the different parts connect. It’s why it’s dangerous to look at ROI for particular areas in isolation (something the recession seem push many to do). The analogy I like to use is gardening (makes a refreshing change from military terms). A great looking garden is how it connects and compliments and so it is with fundraising. It also helps you realise why supporter care (a bit of good compost) is so key – how to ensure those major supporters feel great about that first gift (which may have been a small one). And of course in this connected world you just don’t know who people know – so even your mainstream donors are now channels to major gifts if you can inspire them. Thanks for sharing.
Tom,
Thanks for this great information! Our challenge is coaching our clients how to steward the first gift from direct mail. It’s not uncommon to see 60%-70% donor attrition in the healthcare sector!
Nonprofits are also missing the fact that many “strategic donors” are “lurking” at the bottom of the traditional giving pyramid. These folks make a small first time gift via mail to see how they will be treated. However, they have very deep pockets and are waiting to be nurtured into a major gift or planned gift.
Nonprofits continue to fish in the “disposable income” pond, and very few throw a hook in the “net worth ocean”! The fish in the net worth ocean are often donors who give small gifts via mail for a long period of time and are totally off of the “major gift” radar.
Hi Tom,
It feels like there is a disconnect between the highly emotive copy that works for direct mail and the kind of high-level proposals that we prepare for major donors and prospects. What are your thoughts about this? I am happy when people give, regardless of what prompted it, and we have a good thank you process for people who give via direct mail to try to develop those relationships. However, I am struggling with how direct mail and major gifts can be more complementary.
Hi Lydia – I don’t think Tom is necessarily saying that all direct mail will bring in the very high value gifts (although we regularly get gifts of £1000+ from our mail appeals and one gentleman gave us £5000 online yesterday in response to our latest appeal!)
I think the key is recognising the different donor needs of the majority of DM donors versus the outliers, and tailoring your packs accordingly. So at the lower level of giving I would suggest that people are giving you ‘solving’ gifts – a small amount for a pressing need that they can easily see their gift will help with. But because the average gifts are likely to be low, you wouldn’t want to send these people a very expensive pack.
However as you go up the value ladder, donor needs start to become more like major donors – more responsive to a vision for the future that they can get on-board with, rather than an immediate need. And of course as average gifts will be higher, you can spend more on the DM, and send them more in-depth, ‘inside-track’ packs.
So although you may have someone who responds to a ‘standard’ pack, if you are smart at recognising who is likely to become a mid-value or major donor, you can start sending them packs that address motivations higher up the donor needs ladder, with correspondingly higher value asks, and seeing how they respond. Does that make sense?