Tuesday, May 21, 2013

The new big thing in fundraising - Direct Mail

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.


*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.

Friday, May 10, 2013

Plenary in New Zealand - presentation and useful links

I just presented a plenary at the FINZ conference in New Zealand, because Terry Axelrod couldn't make it.

I promised to post my presentation and some useful links...

Here is my presentation, and there are more links below.

To see how charity data is available in New Zealand (and how it should be everywhere - with a few tweaks) check out:

Watch Dan Pallotta's awesome TED talk...

Sign up for Benchmarking for 2014 by emailing Clarke.vincent at paretofundraising dot com.

Check out that great article looking at data that shows that HIGHER admin costs are better for charity outcomes http://giving-evidence.com/,

Even if you didn't make it along, I hope those links are useful.


Thursday, May 9, 2013

Bequest tips from Adrian Sargeant at FINZ

Good session, as always, for the travelling fundraising academic.

Some really interesting tips on legacies from him, all backed up with research of course...

In 2011, 4200 charities in the UK received legacy income
Top ten of them charities accounted for 32% of the legacies
And the top 50 legacy charities (just over 1%) account for 55%

Grand kids are more negatively influential on will writing than all the good indicators such as volunteering donating etc. make sure you acknowledge this. Childlessness is increasing in USA - Adrian asked if it was in New Zealand, and the answer is yes.

'A gift in your will' is a better phrase than 'legacy' or 'bequest' because it is more inclusive, more acceptable no people who think their estate is going to be too small.

Telling people why they should tell you that they have put your cause in their will - 'so we can plan for the future' is not a motivator. NSPCC spells out that you don't need to tell us, but if you do we would love to thank you.

Probably best approach is that which spells put how you will thank.

He also reckons drop the puns - will to help, where there's a will there's a way etc.

Focus on looking after the future - people (generally) are not expecting to die soon.

A good campaign should not look at the same sort of motivations as a gift now. For example, no need to say what exactly you would use the money for ($20 to make a blind man see) - concrete examples are good for donations now, but for legacies be more value based.

concrete (examples)
subordinate (the building blocks)
contextual (the work that is going on now, the number of families helped)

abstract (values)
superodinate (I missed what this meant whilst I was typing)
decontextualised (more big picture, social change etc)
Structured (like show what you did in 1960s, 70s, 80s, etc and what you are going to do in 20 years time, 30 years etc) though better to say in 20 years time, not 'in the 2020s'

Check out Human Rights Watch 'a lasting contribution to your beliefs in human dignity'

Emotion is fine to use in legacy solicitation but the time between call to action and actual action is longer than other fundraising so does need more logical stuff because 'emotions discount faster than logic'

In 'immediate' fundraising you use negative consequences of not giving, (give us the money or..x won't happen), which is right. But for legacies, talk more about the positive impacts and benefits. This is because people are more optimistic about the future...

Adrian then presented lots of good (and bad) examples of good legacy packs.

Great stuff, thanks as always Adrian.

Tuesday, May 7, 2013

Irreverent conference session

How does this sound?

"Living The Dream. Your investment strategy for a secure future.

Sticking with the theme of sustainability ...we have enlisted a trained stand up comedian and deadly snake rescuer for the Thursday afternoon plenary. Sean Triner will take a challenging and irreverent look at investment strategies for wealth creation for delegates wishing to retire to the good life. Amongst the ideas we'll look at property, equities, bank robbery, smuggling, marrying 'well' and fundraising.

With real case studies and data, Sean will refer to Dan Palotta's recent brilliant Ted talk on how fundraisers should be able to operate on a level playing field with the rest of the market. He may also give some directly useful and applicable tips for you too.

If you get your CEO, CFO, treasurer and/or chairperson to this session you will be doing yourself a huge favour for the long term."

Fancy coming along? If you are in Wellington, New Zealand - see you there! If not but you are interested get me along to your conference to do a plenary / key note!


Thursday, May 2, 2013

The importance of Marginal Costs

Tom Ahern and I were chatting about fundraising at his home in Rhode Island (which I found is not really an island) and decided to video one of these conversations whilst drinking (ahem) mocktails.

Three minutes long, but hopefully useful in breaking down a useful mathematical concept for fundraising.

Feedback welcome - more of these?


Wednesday, May 1, 2013

Are you in Wellington, NZ next week!?

Very excited to be off to New Zealand next week. 

Andrew Watt and I will be presenting a breakfast debate (I am going to be really mean to him with some tough ethical questions - come and join in if you are in Wellington!) 8:00 a.m. – 9:00 a.m. on 10 May At the Amora Hotel Wellington Tickets (includes hot breakfast and barista coffee): $35 Register here:

Disaster Fundraising Guide download it here