The biggest new thing in fundraising: direct mail
There are so many hip new ways to acquire donors in New
Zealand and Australia. Twitter,
Facebook, face to face, phone, mobile, peer to peer, two-step, payroll giving,
email, web sites, Google ads,... but the
number one by volume is that new-fangled
thing – direct mail.
Seventy charities from the now independent Commonwealth nations
of New Zealand and Australia pooled their card file indexes* to study how
donors actually behave. They have discovered that direct mail acquired more donors last
year than any other form of donor recruitment.
Direct mail has never had it so good, and 2009-2012 saw a
100% increase in the number of new donors acquired through this new-fangled method. Back in 2009, 155,000 of the 267,000 people
who made a donation for the first time to one of the 70 charities did so after
receiving a direct mail letter (57%). In
2012 that number had increased to around 350,000 new direct mail donors from a
total of 508,000 (69%).
Famously championed by social change entrepreneur Dr
Barnardo in London in the late 19th century, direct mail is making a
bit of a surge in the Southern hemisphere.
When interviewed, Dr Barnardo was delighted that direct mail
had taken off so much.
“I am verily pleased that direct mail is performing well to
help waifs and strays in the colonies.” He said.
“With [former] convicts putting their backs into good,
honest work to help those even more disadvantaged than themselves, I believe
the outposts of New Zealand and Port Arthur [Australia] may well thrive as
independent states separate to mother England.”
Looking at individual charities to work out how these donors are acquired, we see most are acquired through ‘premium
direct mail’. This describes a method of breaking down the barrier of getting
donors to open an unsolicited envelope by offering a gift in return for simply opening and reading the message.
The gifts could be address labels, tote bags, stationery, key rings or pens.
Whilst acquiring donors through these premium packs tends to
lead to lower average donations, it also leads to much
higher response rates, higher initial net returns and more long term net income.
In the olden days (a couple of years ago)
charities were happy with 0.8% to 1.2% response rates from cold mail, but
premium packs tend to get at least three times that.
Unfortunately response rates are not covered by benchmarking, but I know that the average response rate from direct mail from Pareto charity clients who follow our recommended strategy is over 4.5%.
Even with lower average donations and lower
second gift rates the maths usually work in the favour of the charity willing
to spend more per pack on premium direct mail.
Face to face acquisition of regular givers is still huge in Australia and New Zealand, and I recommend still maintaining (or starting) investment in that area, but make sure you have a balanced porfolio - direct mail cash donors will provide a unique income source and will bring you your future bequests and major donors if you follow the right strategies.
Sean
*Please note – the
charities were collaborating by analysing giving patterns and behaviour. None of them have breached any privacy rules
by allowing any other member to identify donors as individuals; ie donors’
personal information was never shared between partners in this exercise.
