Archive for April, 2008

The socioeconomists are on it!

Wednesday, April 30th, 2008

“What Makes People Give” (New York Times, March 9, 2008) is an overview of some recent research and discussion among economists and sociologists about the title question. As a died-in-wool direct mail small donor fundraiser, it both puzzled me and gave me a slight headache.

A bit long, so much that I’m not sure I’d recommend it. And it’s mostly speculation by economists. The only “research” is what I call “testing” — do a random split of names, send each a different offer. The economists here seem to think they’ve discovered something us muddy-headed fundraisers really need — experimental evidence. But it’s what I and my clients and everyone else involved in mail fundraising have been doing for decades.

Their concrete findings: (more…)

This is your brain on donating

Wednesday, April 23rd, 2008

Giving makes you feel good. No, really, it does.

I’ve heard for years that a generous act releases endorphins that give you a positive rush, but not seen solid documentation. Today I ran across an article that dodges endorphins but demonstrates the “Neuroeconomics of Public Good Decisions” … another angle at “doing good pays off in feeling good” in a concrete way.

A minimally scientific summary: “… supporting a good cause activates the same evolutionarily ancient areas in the brain that respond to basic rewards like sweets, nutrients, or positive social contacts.”

Activity in this “rewards” area could sort people into “egoists” or “altruists” … classed by whether their brain responded more to money for themselves or money for charity.

The rewards area lit up when people knew that their taxes were going to charity. But direct charitable giving produced a yet stronger reward jolt than taxation. A lesson perhaps for political theorists? Well, maybe, but the plot thickens…

Even altruists sometimes decide not to give, and people gave 10% less when they were free to give or not give than when taxes. This could make a case for some tax support for charitable causes. But maybe not. I see a can of worms I don’t want to open.

But it’s nice to know our brains get off on our charitable deeds.

The Answer to Life, the Universe, and Everything

Thursday, April 17th, 2008

On the face of it, we aspire to the impossible.

Our marketing proposition: give us your hard-earned money … and get nothing in return.

The good news: It works.

People share your goals and want to give you their money to help you achieve them.

When people are asked why they never gave to a cause before now, the answer is often “nobody asked.” You’ve heard that one, I’m sure.

When we think about fundraising as a marketing endeavor, let’s acknowledge that the desire people have to give you money isn’t all that different than their desire to buy something.

Any ask (or sales pitch) will work when people have some predisposition to give to your cause (or purchase your product). It’s all in the list.

You don’t want to try to sell skateboards to the AARP. You don’t want to ask NRA members to contribute to the Brady Campaign.

But when you deliver the right message to the audience with the right predisposition, you’ll get gifts (or sell skateboards). They actually like the proposition and are ready to buy into it.

I just had my 679th discussion with an organization about how often to communicate with donors. They, like most of the first 678, were afraid of mailing too often and/or sending too many emails.

Here’s a good reason to mail more: Your donors like you and believe in your cause. That’s why they give away their hard-earned money and expect nothing in return.

Many organizations I’ve worked with mail donors 13 times a year. (And email often, too.) This works because:

… Donors like to hear from you. Note: They may not like to be bluntly asked for money too often. But is there such a thing as being thanked too often? And don’t you always thank them before asking for money again? And they do like to be kept informed. That’s one way they participate in your mission.

… Donors don’t open all your mail. God bless them, they’re busy. They day Aunt Bee is coming to town or the bridge club is meeting or the cat died or they’re just distracted, they don’t open that envelope. When you mail to 1,000 donors and 80 send money, how many said “No!” to your appeal. Few. Maybe nobody. The other 920 just didn’t get around to reading your letter.

… When you don’t mail, others may beat you to the donor’s dollar. If you’re an environmental cause, for example, or animal welfare, your donor is being approached by dozens of other organizations with appeals not entirely dissimilar from your own. If Mrs. Jones just gave to another, she might not have anything left for you. And after reading 12 similar appeals, she’s getting a little hazy on just exactly who you are. Mailing more often increases the likelihood that your letter will be in her hand the day her heart is warm and wallet full.

So you can probably mail more often. If you’re mailing once a year, try twice. If quarterly go to bimonthly. Etc.

You do have one good reason not to mail more: return on investment.

As you increase frequency, you simply may not get enough gifts to offset the cost of mailing. Especially if your donor file is 20,000 or less.

One way to increase contacts and optimize return on investment is to make sure you’re gaining as many donations as you can via each contact.

Look at your newsletter. Do you have a clear call for contributions and an easy way to donate? Are you binding in a reply envelope with a reply form bangtail?

Are you mailing the newsletter in an envelope with a letter? If not, try this. Your letter can be personalized, with a perfed personalized reply form. I’ve seen cases where newsletters that used to lose money started to generate net revenue when sent in an envelope with a solid appeal letter.

And if you’re mailing your newsletter in an envelope at a loss, consider going to a self-mailer with a bound-in reply form and envelope. This works for many groups, too.

If you’re sending an electronic newsletter, do you have a clickable image in the upper right that lets donors easily make a gift?  If not, try this.  Seems to be the key way to drive gifts.

The “Answer to Everything” is that people DO want to give you money. They support your cause and want to help you win. So look at all your touch points and make sure your giving them every opportunity you can.

What works in fundraising: Cash and coin

Friday, April 11th, 2008

Back in the 1990s I wrote donor appeals for two organizations in which a real live dollar bill was enclosed with each letter. Only to the top tier of donors, of course. Closed-face, highly personal, with the dollar the first you see as you open the envelope. Donors were asked to return the dollar bill with their gift.

These were both for political action groups and the dollar-bill package always yielded a very high net revenue, despite the additional $1 per package additional cost.

(Each time they’d get a few donor complaints. “You’re wasting our money!” … but complaints come with the most productive mail package.)

Both organizations stopped, roughly the same year, as each switched agencies.

The reason? They were never comfortable mailing away all that cash, even if it did bring in magnificent returns. Didn’t feel right. Seemed risky and wasteful. No matter how often it worked.

At least one group now sends out a check for some small sum. No upfront investment. No sense of waste since few checks get cashed. The check showed through the carrier window … usually a dead giveaway that you just received a seriously “junk maily” solicitation from somebody selling high-interest debt. Still, I’ve seen this a few times so assume it’s a control, but it can’t be a world-beater.

While dollar bills stay at home, the lowly nickel still reliably lifts response. I get nickels from several organizations with some regularity. These are controls.

I just received what I assume is the control acquisition kit from Paralyzed Veterans of America, a mail recruitment that does everything right.

The nickel can no longer show through the window, because placement there would shred mail in the USPS automated equipment. So this PVA kit shows a duotone photo of the nickel and tells you on the outer “INSIDE: The enclosed nickel can help provide life-saving assistance to paralyzed veterans!” (I’d end that teaser in a “…” but otherwise great.)

A live nickel is still enclosed, of course. You can feel it before you open the envelope. It’s spot-glued to the letter below the nickel image, with an arrow pointing the way. Now it just has enough paper between the metal and the outer envelope to prevent shredding at USPS.

(One thing I don’t quite understand: The letter asks the donor to return the nickel with their gift, a very common request in this kind of appeal. But that means they’re dropping a nickel into an envelope that might get to an automated sorting machine downstream. That would shred! But DVA clearly dodges this possibility.)

The letter does what many groups miss: solidly link the nickel to the appeal.

“Today, the Department of Veterans Affairs allocates only 5c every half hour to each veteran for medical benefits…”

I know a lot of Americans who are really angry about how veterans of the current wars in Iraq and Afghanistan are being treated by our government. I’m one.

The package also links the appeal to Memorial Day and includes a small, heavier stock “memorial day card” that I can sign and return, to be delivered to a veteran.

Great package. Excuse me while I get my checkbook.

What works? Renewals to WHYFUs

Tuesday, April 8th, 2008

Many organizations designate donors as “members” even when membership is automatic with donation, membership lacks concrete benefits, or all benefits are sent to all donors regardless of response to renewals.

Why call your donors “members”? People may have a stronger sense of participation in an organization’s mission when they’re recognized as members. But reason aside, for many organizations, “members” simply tend to have better lifetime value than “donors.”

A common question I hear: “How many membership renewals should we send each year?”

The answer is simple if you think about it: Keep sending renewals until the cost of renewing an old member exceeds the cost of acquiring a new member.

Related thoughts: (more…)

Fun intros to RSS, wikis and more

Saturday, April 5th, 2008

Just came across Learning Web Basics Without Looking Stupid — remarkably fun, easy introductions to blogging, RSS, social networking, and wikis. The host site — artful manager — is centered on managing art organizations, but meanders into many areas of interest to more general nonprofits.