Really Integrating Direct Mail with Major Donors
and Bequests
I believe the new big thing for charities (and
something Roger Craver from www.theagitator.net picked up in his latest blog)
is something really old fashioned: talking to your donors face to face.
Especially mid value donors and bequests.
The charities that grow and
raise more money for their beneficiaries are those with a long term view. They
have a cohesive, coordinated and focused strategy.
With only 301 charities (1%) accounting for half
of total revenue in Australia it is relatively easy to get hold of some really
fascinating data. Especially when many of the larger charities collaborate in Pareto’s
annual benchmarking exercise.
Let's take direct mail.
If you haven't already got a large database of donors through direct
mail, the costs of donor acquisition, setting up a team and database, bringing
in the right skills and more can mean it will take years to break even from fundraising
in this way.
Even though direct mail
is still the largest source of donors in Australia (and many other countries,
including USA) it could be a marginal activity to start with. And there could
be better options for many.
But if you look at the
data and can work 'without silos', direct mail integrated with legacies and
major donors - using mail, phone and shanks' pony (visit donors) - you can make this
combined approach the best long term bet for your cause.
Take this example, based
on real data and modelled for a new entrant to direct mail in Australia.
The charity invests $1m
per annum, for five years, on direct mail acquisition. Other costs such
as ongoing house mailings, calling donors for regular (monthly) gifts,
thanking, processing and developing packs are additional to that million but
included in the model.
After ten years the
charity would have raised over $7m net.
A lot of effort and risk for what is an OK return.
However, what if the
charity 'lifted' the values of some of these donors through major donor
activities? Applying the growth that we have seen the best charities get
through their major donor programs, and including some costs for staff and
materials, we end up with $13.6m. Now we are talking growth!
And what if they were
great at legacy fundraising too? Well, they'd be up at $21.3m net, with an
annual net income looking forward in excess of $3m which is pretty much in the
bag. A superb, reliable and expandable revenue.
Here it is illustrated:
A great chart for your board when you are after investment, and a great approach for breaking down those internal silos.
Sean
