Archive for January, 2009

What may not work: “Yes we did!”

Thursday, January 22nd, 2009

I’m certainly celebrating Obama’s election and inauguration, as are most everyone I know in the fundraising community.  Well, the progressive wing anyway.  Which brings to mind a few traps that some fell into during the last eight years.

During Bush’s first term, progressive causes had a great tool for fundraising: a demon who’s actions and policies inspired great anger among donors.  This was great for a couple of years.

But by early 2003, some saw a drop-off in donations that I attribute to despair.  With the solidification of the Republican majority in Congress, many donors had lost hope that their causes… or their donations… could possibly make a difference.  The Bush administration was certainly instransigent.  And Congress deaf to their appeals.

When Congress tipped a bit toward to Democrats in 2004, a few organizations’ appeals reflected some confidence.  “Now we can finally, once again, achieve something.”  For many, this did not resonate with donors, who didn’t see potential traction in the modest gains.  Gifts did not pick up.  And those donors were right!  Things did not improve because the Dems didn’t gain enough to make a difference.

In 2006, the Senate and House of Representatives had a more significant shift to Dems. Some groups again got excited.  “Now we can get something done!” Dubious donors still held on to their pessimism.  Rightly so.  And those groups who promised progress were now twice shamed by their excessive expressed optimism.

The mistake these groups made, in my eyes, was redirecting their appeals away from the demons toward the potential angels.

Nope.  People are much more willing to give money to harm those they hate than to help those they love. Never ask more money to do good.  At least in political action arenas, donors act out of anger and frustration.  Not out of hope.

Right now, progressive organizations face a real problem: donors who may think that things have actually changed.  Uh uh.  While I wasn’t as inspired as I’d hoped by President Obama’s inauguration address, he made it clear that we’re digging ourselves out of a deep hole.  We’re not going to get to any positive stuff until we overcome  immense problems.

I’d resist any “Yes we did!” and even “Yes we can!” in appeals. We need donors support more than ever.  Obama made it clear it’s largely up to us.  And “us” in MANY cases will be effective non-profit organizations supported by committed and generous donors.

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“How many renewal notices should we send?”

Saturday, January 10th, 2009

Statistically, there is a right answer to this question:

“Send renewal notices until the cost of a donor/member renewal is greater than the cost of acquiring a new donor/member.”

If your net cost per renewed donor in Renewal 6 is $4, and your baseline cost of acquiring new donors is $3, you’re mailing one too many renewal notices.

An easy test in late renewals is the cost of simply rolling lapsed donor names into your next acquisition mailing. For these names, you pay no list rental cost.

For this acquisition mailing, the cost per outgoing mail package can be lower than the cost of renewal notices, which are produced in much smaller quantities, of course. And you’ll want to track response for that lapsed file separately, too, to gain good data for comparison. So even if the raw cost per renewal in a late effort is lower than the baseline cost of acquisition, do the math. Your net numbers could lead you to roll lapsed names into acquisition.

With all that in mind, continue testing. A really cheaply produced late renewal notice can shift all your numbers. And cheaper renewals often have a better chance of winning on a net basis. Generally speaking — for most but hardly all organizations — it’s worth spending some money on Renewal 1. Those long letters and hard membership cards can really pay off, in low net cost per renewal. Later on, the increase in per-unit production costs in small quantities can skew everything.

Groups with smaller donors files MUST try cheap late renewals because it gets tough to overcome high costs.

One approach that works for many groups: Preprint a base form in large quantities, then do customization in each notice with laser imaging. Different letters, basically, though you can change more. Not tested often enough: Preprint a carrier envelope with a second window or oversized, maybe “L” shaped window and use it with multiple statements. The per-unit expense of custom envelopes diminishes with volume. And you can then customize what donors see on the outer by changing internal envelopes… reply forms or letter overlines.

When you use color, for premiums particularly, why pay for four-color on the outer and some inside pieces when you can color-up the letter with plate changes and let that catch donors’ eyes through a second window.

As always: test, test, test.

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Renewals are renewals. Appeals, appeals.

Saturday, January 3rd, 2009

Renewals and appeals are different kinds of communications, with different dynamics driving gifts, and different creative strategies. Fundraisers who respect these difference will be more successful in the long run than those who muddle the distinctions, thus dampening the dynamics of each.

In summary:

Renewals ask donors to confirm their ongoing participation in the overall mission of the organization. When donors are asked to renew their annual membership or commitment, they do so based on their ongoing support, without regard to topical events. They are affirming support of the “institutional mission” rather than a particular campaign or effort.

Since topical or issue are not driving dynamics, many organizations’ controls are statments, perhaps invoices. These usually works best for “big brand” organizations, where the logo drives renewal.

Besides statements, the most common control for a Renewal One is a wholly institutional 4-page letter, reselling the donor on whatever brought them into the organization, with a litany of institutional success and a recap of how the donor’s money will be used. Very often these include a personalized membership card. (Hard cards can still work better than soft in the right quantities.)

In both cases, the carrier envelope say “RENEWAL” and the copy theme is “renew your annual commitment/membership”. Donors are already predisposed to the mission, and the idea of “it’s time to renew” is intuitive, so response is high.

Renewals do not ask donors to “support this discrete cause.” That would be shift the communication into…

Appeals ask donors to contribute to enable the organization to accomplish some specific effort or sustain some particular subset of the group’s mission. Appeals are about a specific topic or issue.  They articulate that topic or issue in some detail and explain how today’s gift will accomplish a particular goal. Yes, they can restate the institutional mission, and yes, the ask is usually framed to avoid limiting the organization’s use of funds raised from that appeal.

What I see too often are renewals that are actually appeals. They may have “RENEWAL” on the carrier envelope, but the letter then asks donors to take some time to understand a particular topic or issue. With many groups, that can require a fair amount of explanation. It takes time and ink.

Sending appeals as renewals casts aside the donors’ natural inclination to re-affirm their support of the general mission. It instead asks them to understand and support a specific action. This muddies the ask and, I’ll argue, suppresses response overall.

If you want me to support a campaign, I’ll read and make a decision on that campaign. If you ask me to renew, I’ll probably renew.

But when you ask me to “make my renewal donation” to support a specific campaign, I’m at sea. The ask — the communication — doesn’t fit my expectations.

You might beat one renewal mailing with one topical mailing, but this approach does not work overall.

A renewal is one kind of gift. A special donation to a campaign is another.

Especially when you mail MANY times each year, maybe twelve appeals and perhaps a six-contact renewal stream. Don’t ask donors to sort things out. Keep it simple. Keep it clear.  Renewals are renewals.  Appeals are appeals.

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Good things are still happening!

Friday, January 2nd, 2009

As we slide into a new year and days closer to a new presidential administration, I’m optimistic — with good reasons, I think — and nonprofits I see still have good things going on.

Nobody I know has been misguided enough to try to save their way out of financial trouble. They’re in the mail (and ether), spending smarter rather than less. They realize there’s no risk involved in relying on best donors. Those who have been cautious in acquisition, have mailed fewer, maybe a few weeks later, rather than not mailing at all. I haven’t heard from any who mailed cold in November/December and we won’t hear about January drops for a while, but caution is just cautious optimism.

The Agitator is still pumping out great info. Here’s their summary to date.

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