FundClass Archives:

Direct Mail Fundraising 101

Edited Digest of FundClass Topic #13, May 1998

Facilitated by Mal Warwick

We are fortunate to have as our facilitator the renowned Mal Warwick. Consultant, author, and public speaker Mal Warwick has been involved in the not-for-profit sector for more than 35 years. He has written or edited nine books of interest to nonprofit managers, including the classics Revolution in the Mailbox and How to Write Successful Fundraising Letters. He edits a newsletter, Successful Direct Mail & Telephone Fundraising, and is a popular workshop leader throughout North America.

Mal is the founder and chairman of Mal Warwick & Associates, Inc. (Berkeley, Calif.), a fundraising and marketing agency that serves nonprofit organizations and socially responsible businesses. He is co-founder and vice-chairman of Share Group, Inc. (Somerville, Mass.), a nationwide telephone fundraising and telemarketing firm. Among the hundreds of nonprofits Mal and his colleagues have served over the years are many of the nation's largest and most distinguished charities as well as six Presidential candidates and scores of small, local and regional organizations. Mal served as a Peace Corps Volunteer in Ecuador for more than three years. Since 1969 he has lived in Berkeley, California, where he is deeply involved in local community affairs.

Full opening message from Mal Warwick

Opening Message by Mal Warwick

There's much more to direct mail fundraising than writing good letters. In this online seminar, we'll explore the method behind the madness - the who, what, where, when, and why of direct mail for nonprofits.

Even experienced direct mail fundraising pros sometimes overlook the fundamentals, and beginners rarely have opportunities to view the Big Picture. In this online seminar on the basics of the business, I'll hope to help both novices and long-time practitioners gain fresh perspective on direct mail strategy. (In other words, even if you know it all, you and I may see it a little differently.)

Sure, such questions as what you put in the PS, what postage rate you use, and how many dollars are returned by a mailing are important - but they're of secondary importance. They're distracting, unless you're well grounded in the fundamentals.

To WHOM should you mail? WHAT should you mail them? WHEN should you mail it? WHY mail - i.e., what purpose (or purposes) can you accomplish? What is the point? HOW does direct mail relate to your organization's other fundraising and marketing activities - and to your overall mission?

Two Scenarios
For example: Podunk College wants to launch a $5 million capital campaign two years from now to attract and retain stronger faculty. Its 15,000 living alumni have not been notably generous or responsive to the haphazard annual fund appeals the alumni office has been sending for years, and attendance at reunions has been slight. A lead donor is prepared to put up half the $5 million - but every dollar must be matched by alumni. How can direct mail help? What sort of direct mail program might make sense for Podunk College?

Or take another example: WeServeYou, a small human services agency in a medium-sized city, has 3,000 donors. Almost all of them have been acquired through a successful annual banquet, which is always well attended. The agency's United Way funding is declining, local government appropriations are uncertain, and the board is nervous. It appears to be time to try new ways to raise money - to diversify WeServeYou's funding base. Will direct mail work? How?

One participant suggested that the first example (Podunk College) illustrates why it might be a good candidate for direct mail (DM). They cited the following as some of the reasons this is true:

  • There is sufficient time available to do several cycles of pieces.
  • Money has been raised by the major donor program.
  • The match gives mail recipients an incentive to give.
  • The college apparently has some financial resources which it can invest in DM. (With 50% in the bag, it has an incentive to finish the job).
  • It updates the alumni lists which can be used for major donations later.

In the second case study - WeServeYou agency - Mal gave this advice: For a direct mail specialist, I'm probably slower than just about anyone else to turn to direct mail as a way to raise short-term money. Maybe experience has made me cautious. Maybe it's just my ornery nature. Whatever the reason, I wouldn't be so quick to develop a fundraising mailing for this small human service agency. I DO think the mails can be productively used to help meet WeServeYou's fundraising challenge - but the best first step isn't likely to be a solicitation.

For one thing, those 3,000 donors are event donors and won't necessarily respond to a mailing. For many of them, the motivation to give is social: they want to be "seen," or to gain good will for their businesses, or simply to mingle with other people at a popular social occasion. In any case, I wouldn't be likely to start with a brochure-based mailing. My experience with brochures in direct mail appeals is decidedly mixed. To put it bluntly, they've rarely justified the extra cost they entail. I know this comment goes against the grain of many fundraisers, especially at colleges and universities. There are lots of brochures mailed to raise money - but I think the greatest benefits they bring are usually to the designers who get paid to produce them. As someone noted today, the letter is a far more important element in a fundraising package. I NEVER mail a brochure without a letter - and I rarely mail a letter WITH a brochure.

But I probably wouldn't launch WeServeYou's direct mail program with a letter, either. Those 3,000 banquet donors all live in the same town. Someone at the agency - either board or staff or both - knows many, if not all of them. The best first step, I believe, is to do some good old-fashioned fundraising. First - with the full buy-in of the board of directors - put together a fundraising committee and organize a campaign to mobilize support throughout the community. Persuade a few of the community's leading citizens to jump-start the campaign with leadership gifts. Develop goals, a schedule, and all the other bells and whistles of a campaign. Make a big deal out of the situation.

Now, how can direct mail help in a campaign of this sort? In at least three ways: through warm, personalized thank-you letters sent promptly in response to every gift; through a newsletter (yes, that was a great suggestion!) that can be sent to an ever-widening group of participants in the campaign; through solicitations mailed in larger numbers at a later stage, once a substantial amount has been raised in big gifts.

An experienced participant had the following observations regarding DM:
Direct mail takes a long time to get a payback - usually several cycles, but can eventually build a strong base of loyal contributors, particularly among groups who wouldn't otherwise be attracted. Direct mail requires substantial investments in cash and time, not to mention hiring mail consultants! It requires a long and carefully developed plan.

Direct mail can only be one of several legs in the NPO's fundraising efforts. Follow-through. Why bother otherwise?

We tend to talk about our "mailing lists." In fact, though, if we've got our heads screwed on straight we have much more than a mailing list to work with. We have a database. If we maintain a flexible and efficient database management system, we can cram lots of information about each and every donor into that file. And that becomes the information on the basis of which we'll build genuine relationships with our donors, not just the habit of asking for money on a regular basis. Information that allows us to "segment" the donor file productively, delivering the right message to the right individual at the right time.

Test Mailings

A question was raised regarding specific rules for test mailing (the practice of obtaining a representative sampling of results prior to the full mass mailing). Mal responded by saying, "in my book, every mailing is a test mailing. Testing works best only if it's continuous. Through testing, you can probe the value of different lists, different `offers' (i.e., minimum suggested gifts, premiums, etc.), and different writing and packaging styles. In a well-developed direct mail program, testing never stops. Through incremental improvements over time, a mailer can greatly increase the cost-effectiveness of a direct mail program."

Seasonality

Are there certain months that are better to conduct a direct mail campaign than others? As a rule, Mal suggests you ignore them - if only because these practices change from year to year, and they're highly vulnerable to the disproportionate weight some of the list-makers give to certain very large charities. Instead, the applicable principles here are these:

Almost all the time, the right moment to "drop" a direct mail fundraising appeal is when you've got it addressed and stamped. Direct mail is a continuous, year-round process. Millions of dollars are lost waiting for the "right time" to mail.

Whenever else during the year you might mail, be sure to mail to your donors sometime during the last two months of the year. That, for most causes and institutions, is far and away the most productive time to appeal to your proven donors for additional help (though not necessarily the best time to turn to your constituents or the community at large for first-time gifts). But, again, do not limit your appeals to just that one time of the year.

Mal says, "I'm no big fan of seasonality as a guide to timing direct mail fundraising projects. The `lists' that purport to show which months are more favorable than others merely report which are the favorite months for mailings. They prove nothing. And those months change from year to year - and, even more dramatically, from one organization to another. Forgeddaboudit! This is just one of those many aspects of direct mail where there just aren't any easy answers."

Software

There were several questions raised involving which type of database might be best for use in managing donor lists and DM campaign packages.

Sure, Mal's experience has been that there are lots of specialized fundraising programs on the market - you could probably spend $50,000 or more on one! -- but the ones he's seen all appear to have one or both of the following problems:

They consist of proprietary code and can be altered only by the guys in the white coats (at $185/hr), and/or they don't do a good job of setting up the database in a way that will facilitate direct mail analysis and operations. In other words, they're more trouble (and more cost) than they're worth.

Someone suggested using Microsoft Access instead. Much as it pains me to put more money in Bill Gates' pocket, I've generally found this is the most sensible approach for small fundraising operations. In any case, DO NOT - under any circumstances - set up your donor database in WordPerfect, Word, or any other word processing program. That practically guarantees problems. One participant had this opinion,

"Access seems the easiest answer. In my own experience work in a one-employee group, volunteers & board members are frequently needed for data entry and for managing software programs. The charm to Bill Gates is that EVERYONE uses his software. So, even if you have no background in setting up databases, you can probably find someone connected with your organization who has that experience with Access, and can set up the database template on their home computer. By using Access, which many people have on their home & work computers, you can even send a copy of the database home with a board member or reliable volunteer for any major overhauls."

Direct Mail Packaging

Many of the questions under this topic revolved around the packaging of direct mail: what to include, what to leave out, envelope format, number of pieces to include, brochure or flyer, etc., etc. As usual, there were as many opinions as ways to package the pieces. Some of the key points are enumerated below, as well as Mal's guidelines for success in this area. Mal offered the following guidelines:

The following four items are essential in just about any appeal:

  • an outer envelope (or "carrier")
  • a letter
  • a response device (or "reply device")
  • a return envelope

"80% of the time, those four items are sufficient. And, yes, when I say "a letter," I mean a letter - not a brochure, flyer, press release or some other device. A direct mail appeal is (or should be) a heartfelt, one- on-one communication between a letter-signer and an individual reader. With the communication tools at our disposal in direct mail today, you can set up that one-to-one relationship only with a letter."

Now, for balance, here are four items not to include in a fundraising appeal:

  • a brochure or flyer about your organization that is general rather than specifically related to the topic of that particular appeal
  • a combination response device-cum-response envelope (generally called a "wallet-flap reply envelope"), unless it is specifically related to that particular appeal
  • a general newsletter or annual report that is enclosed in a fundraising appeal unless the letter deals specifically with the contents of the newsletter or report
  • a news clipping or other material that promotes your cause or your organization in general but doesn't relate to the topic of the appeal itself

The rule of thumb to follow is this: If it doesn't reinforce the message in the letter - if it distracts the reader from the message - leave it out. The corollary to this rule is the converse: If an item does strongly reinforce the main message in your appeal, it may be a good idea to add it, budget allowing. This includes such items as clippings, newsletters, reports, or anything else that is specifically related to the topic at hand - and, ideally, if that additional item is referred to in the appeal letter.

Many fundraisers - especially at colleges and universities - are enamored of sending brochures instead of letters. These are usually in the form of "self-mailers." (A self-mailer is a self-contained brochure with a mailing panel and postage on the outside and some form of response device and response envelope bound within it.) At times, this format makes sense - but, in fundraising, NOT VERY OFTEN! Discouraging though it is to designers and other creative types who want to produce really cool brochures, letters almost always raise more money than brochures of any type. Time and time again, Mal has seen this confirmed in tests. That may change some day, but probably not soon.

Flyers/Brochures

Selena Mobbs also wrote in response to my comment about package contents, "I'm sure you don't mean to say that we shouldn't experiment with including corresponding brochures or other material, as long as the brochures don't replace the letter. For donor acquisition, the most effective pieces I've used included a brochure along with a letter - allowing the personal connection between a potential donor and the worthy cause to be highlighted in the letter, but providing more back-up factual information about the worthy cause in a brochure designed to reflect the mood of the solicitation."

Mal responded that frequently, a brochure or other insert that is specifically designed and written to accompany a particular fundraising letter is a GREAT addition. It's all a matter of deciding how best to package the information you need to tell your story. I was inveighing against GENERAL brochures that are not related to the specific appeal.

Selena Mobbs also wrote, "I tend to use one letter & brochure combination appeal during the year even with the added expense, in conjunction with other designs. Other donor acquisition direct mail pieces that I will use this year include Donor Proofs with hand-written post-it notes, and packages of seasonally-themed envelopes with a monthly giving appeal letter. I keep thinking that I'll learn what `type' of person responds to each `type' of design, but I have yet to discover the secret.

For repeat donors, a general brochure describing the giving levels (mailed with a letter) has been very helpful in securing a gift which increases the donor to the next higher level. However, from your earlier comments regarding the term "direct mail", I'm not sure that repeat donors are included in your analysis."

Mal responded that these comments raise three points in his mind:

First, I want to make absolutely clear that "repeat donors" are indeed included in my concept of direct mail. In fact, they're the centerpiece of that concept. MOST direct mail is directed at repeat donors. Acquisition mailings are the only exception. It's the previous donors who merit a regular schedule of mailings to cultivate, educate, and upgrade them.

Second, it seems unlikely to me that there would be any useful pattern in the "types of people" who respond to one design or format rather than another. It's much more productive to study the differences in donor behavior. For example, some people will ONLY send one gift per year - while others might send several. Over time, you CAN find such patterns. Those patterns allow you to increase the cost- effectiveness of your direct mail program - by mailing more selectively.

Third, the brochure is not the only way to lay out a variety of giving levels. The most successful upgrade mailings I've been involved in have, as always, been letter-based - and in those letters we made the point that a gift of so many dollars would entitle the donor to "move up" to the next higher level. Often, there are special benefits involved. A letter allows you to cite what those are - but, if you wish, for one particular level only. In other words, you can selectively upgrade people, one level at a time (such as from $50 to $100) rather than, say, suggest that a $50 donor "move up" to the $500 or $1000 level.

This participant had success in using flyer's in his agencies' mailings: "...with today's desktop publishers available for such a low price and so easy to use, almost anyone can produce a flyer for low cost. Try black on a nice plain colored paper. We have done this several times and found that with a good one page letter and remit, it has worked very well for us, sometimes as much as doubling the response rate in comparison to similarly-themed and timed mailings..."

Another offered a differing opinion:
"...I would tend not to produce / distribute a brochure for two reasons: 1) Most development professionals whose brains I have had the opportunity to pick will tell you that a brochure is not as effective as a well-conceived, well-written letter (at least in a situation that requires a direct and clear solicitation). 2) They are generally terribly expensive, especially if you want to produce one that is halfway attractive..."

Personalization and Segmentation

Personalization and segmentation is, in many ways, the key to effective direct mail fundraising. On its face, segmentation means dividing up a list into sub-sections or segments - but segmentation becomes meaningful only if you then proceed to treat distinct segments differently from one another. At its most basic, segmentation is useful for small organizations that have been accumulating names since Day One in a "mailing list" - a list which is typically used as a target for everything the group decides to mail, including newsletters, appeals and event invitations. The first step in segmentation is to divide those who should continue receiving mailings on a regular basis from those who should not. In one fell swoop, an attentive organization can substantially increase the cost-effectiveness of its mailing program by making this simple division.

This begs a question, however: On what basis do you divide the two groups? There are four criteria to take into account, if you want to be really thorough about it:

  • SOURCE: (the means or channel through which the organization has acquired the name) Event donors may be one source, newsletter subscribers a second. People who called on the phone and asked to be put on the list may constitute a third source. For the purpose of direct mail fundraising, people who have previously sent gifts by mail are by far the most valuable and productive segment. People who have never given money for any reason are the least valuable.
  • RECENCY: (the date on which you last received a contribution from an individual, or, in the case of non- donors, the last date you updated the person's address) As a rule (and it's a powerful rule), the more recent the record, the more likely you are to receive a response. In other words, if you haven't heard from someone for 3 years or more, chances of a response are slim, and you'll probably save money by excluding such people from a mailing.
  • FREQUENCY: (the number of gifts you've received from a particular person - usually within a given period of time or number of years) People who give more frequently are the best prospects. One-time donors who never repeat their gifts are the least desirable.
  • MONETARY AMOUNT: (typically defined as one of the following: (a) the Highest Previous Contribution received from that donor at any time in the past; (b) the Cumulative Giving of that person during the last year (or to date this year); or (c) the amount of the last gift received from that donor) Obviously, people who have given larger gifts are more likely to give large gifts when asked to give again. People who have given smaller gifts are much less likely to do so. Why? People vary in their giving habits as well as in their means. However, it's also true that, generally speaking, people who give more generous gifts tend to be more loyal (perhaps because they can afford to be?).

These four criteria can be used in combination to segment a donor file. The simplest application is to divide the list in these four ways:

  • donors versus non-donors
  • donors who sent money in the last 12 months versus those who haven't done so
  • donors of only one gift versus "multi-donors" who've given two or more
  • donors whose Highest Previous Contribution was, say, $50 or more vs. those who have always given less

By segmenting in this fashion, you could establish minimum criteria for inclusion in a fundraising mailing - each person you mail to would need to meet or exceed the minimum criterion in each of the four areas. Clearly, you can extend the same logic into ever-more-complex segmentation models. In some high- volume, big-budget mailings, there may be literally thousands of segments or "cells," each of which is defined by all four of these criteria (and possibly many others as well). But, for a small nonprofit, the most immediate, most useful application of segmentation is to cull a mailing list, so you'll waste less money on your mailings.

On the next level up the ladder, segmentation can (and should!) be used to divide more generous and more responsive donors, on the one hand, from those who are less generous and less responsive. The former is "worth" more. You can easily justify spending more money on mailing to them - by using first class postage instead of bulk rate, for example. Or by personalizing the message on, say, a laser printer rather than sending a "Dear Friend" or "Dear Member" or "Dear Alumnus" letter.

A respondent commented on her agency's "new spin" on their fall membership mailing by introducing added personalizing. This entailed sending tailored messages to people on her list, recognizing individuals for having joined last year, for example, or for having continued their support for many years - or for lapsing in their membership commitments. "This is a TERRIFIC use of personalization - the highest possible use of personalization", Mal stated. "Personalization can make a real difference when it's applied in this fashion."

Mal responded that another prime application of personalization is to cite a donor's previous gift amount and suggest one that's proportionately larger. This works best of all if you can do so both in the body of a fundraising letter and on the response device enclosed (being careful to mention exactly the same amounts in both places). To Mal, THAT'S personalization. But most people in direct mail seem to think personalization means merely inserting a donor's name and address in a letter. This extremely limited application of personalization may improve a mailing's results - or it may not. (He's even witnessed mailings in which the generic, non-personalized segment was more productive!)

One person had this advice for us: "Knowing who you are mailing to, and what is most important to them, is important. Don't underestimate the power of small amounts of personalization. Last fall I tried a new spin on our fall membership drive by increasing the personalization. In addition to the standard name, address and salutation, the list was divided up into categories such as new donors last year, ongoing donors, lapsed donors, prospects forwarded from another affiliate. With these types of divisions we were able to merge in subtle changes to the letter." An example of these "subtle changes" is as follows:

  • First time donor last year: "We were so happy that you joined us last year...please renew your support..."
  • Ongoing donor: "Your ongoing support over the years means so much to us...continuing donors provide the foundation of support for our programs..."
  • Lapsed donor: "Your past support made a difference in the lives of people throughout the communities we serve. We haven't heard from you since...There is no better time than now to reinstate your membership."
  • Prospect that was donor to another affiliate: "Your support of Planned Parenthood in your last community shows your dedication to these issues. You can make a difference in your new community by supporting Planned Parenthood Golden Gate."

"We used a two page letter and there were three places in the letter that it was personalized to the donor/prospect's status. This membership appeal produced a return rate of 16% for first time donors, 23% for renewing ongoing donors, 4% for lapsed donors and 2% for prospects. Also, this was a two pass membership appeal, with the second pass being a shorter letter, to all those who had not yet responded (5 weeks later). Combined results of the two pass campaign had a very satisfying 21% for first time donors and 37% for ongoing donors with an average gift 30% above projections."

On the subject of thanking donors in a personalized way, the same participant shared their practice: "We followed up with letters which were also personalized and customized, such as: Lapsed donors are always welcomed back. We stress to ongoing donors how vital their continued support is. New donors are welcomed.

Thank you letters include a teaser on the outer envelope such as WELCOME BACK! We are continuing to refine our segmentation as we learn more about the demographics of our constituents and our direct mail program just keeps moving forward."

Mal complimented the many extremely useful comments participants made about the "value of real, honest-to-gosh PERSONALIZATION. That word is often grossly misused. People tend to think of Publishers Clearinghouse mailings with their names splattered on every piece of paper in a dozen typefaces! That's not personalization; or, at least, it's not very useful."

Surveys & Evaluations

Noted was the use of survey results to tailor future appeals: "The most successful fundraising programs I've been involved in have been based on that principle. And the tool they've frequently used to implement it is the DONOR SURVEY. In concept, this is downright simple: You mail a questionnaire to each of your donors asking a mixture of program-related, personal, and demographic questions. Then you record and use that information. That's more easily said than done, of course. But, over the long haul, it's well worthwhile - because it enables a fundraiser to build solid relationships with people he or she may never have met."

One observer enthusiastically agreed with this practice: "YES!! Our fall membership included a survey for the first time. Not only have we coded the constituent records for appeal tailoring in the future, but it gave us great demographic and psychographic information for setting the tone of appeals. With 45,000+ constituents in our base and a six county area to cover, we have found that certain areas respond better to certain types of appeals. We are currently using the membership survey results in our spring "clean-up" appeals.

It is great to be able to start the letter by telling our donors how we are listening to them (i.e. "over 75% of donors in San Mateo County rated XYZ as one of the three most important programs we offer... and we are listening.")

We tried to tie this in as much as possible with what is going on in their area (one problem we have been combating is the feeling from some donors that we are "too big" and not locally focused enough since our merger two years ago). Early results are very promising."

After coming up through the ranks of the annual fund/direct mail, I'm now in planned giving. I've found the approach to donors is somewhat different in this area than in the traditional annual fund/major gift arena. In my previous position, I had success in writing letters asking for specific gifts or making personal visits to ask for gifts. In planned giving, however, many prospects usually pre-qualify or self-identify herself. Although it's fine to make courtesy visits on Planned Giving prospects, setting up an appointment out of the blue to ask for a planned gift just doesn't work.

One key way to identify these prospects is through direct mail. We have a vendor-supplied newsletter we send out three times a year and only get a handful of responses for more information. I've tried sending bequest awareness material several times and received the same nominal response. The best appeal I did was to fashion a letter dated April 16 in which I congratulated our alumni on surviving April 15 and offering a booklet that offers ideas on how to use charitable giving as a financial planning tool. I had more responses for this than all my newsletters put together.

Anyway, I would like you to share your thoughts on how those of us in planned giving might increase the level of interest via direct mail. I'm not thinking of using direct mail necessarily to get gifts, just to open doors. Many thanks.

Mal responded: Annual Giving folklore holds that including checkboxes for information on wills/bequests/planned giving opportunities will lower response rates in a donor acquisition direct mail piece. Have you any evidence one way or the other on that issue?

Postage Paid Return Envelopes

Joseph Sprague Jr. wrote, "I work with an animal shelter in upstate NY that has had great luck with direct mail. We are currently talking about using Postage Paid Return Envelopes. I was wondering if you have any information to say if they increase your responses or not?"

The conventional wisdom in direct mail is that Business Reply Envelopes raise response over what might be expected with a return envelope that requires the donor to affix her own stamp. In fact, however, my experience has been mixed - particularly lately. In tests, we've found that this distinction typically doesn't make a lot of difference. In fact, sometimes our clients do better asking donors to pay the freight. Joseph also wrote, "I have noticed that a lot of the direct mail I get at home is coming in with Bulk Rate Postage stamps on the envelope and not the bulk imprint. Do you think that the stamp increases the return?"

Mal responded: Here's another eminently testable question that, likely as not, won't make a whole lot of difference. However, from time to time these pre-canceled bulk rate stamps do lift response. The postage variation that sometimes makes a dramatic difference is that between pre-affixing a first class stamp to the reply envelope in place of using a simple, printed reply envelope (either postage-paid or not). I've seen this device double response at times. (Naturally, there are unpredictable exceptions - just in case you're laboring under the illusion that direct mail operates under scientific principles.)

Targeted Copy

Marshall Gillam asked, " What's your experience with targeted copy? By this, I'm thinking about Boomers, Busters, women, etc. Is there any data that suggests that variations in copy for these types of groupings of donors makes any difference?"

Mal responded: Here's a very important question.

First, I have some experience with gender-differentiated direct mail. Generally, sending different letters to women and to men has NOT worked for me. I don't know why, but several clients have tried this over the years, and never with any luck.

Second, my experience with so-called Generational Marketing is very limited. But I am absolutely convinced this approach makes sense for many nonprofits -- especially colleges and universities when writing to alumni, who are usually age-identified. After all, there are huge differences in perspective from one generation to another. (How could there not be?) This is an area that bears considerable testing.

Upgrading Donors

Lori Wallace wrote, "I run a one-man shop for a non-profit counseling center in the Chicago suburbs. We are currently winding up our Annual Appeal. We send out the typical letter with pledge card and return envelope. Upon some close inspection of the numbers from last year and the year before, I noticed that (as I'm sure you have) our donors were "stalling" at their giving levels. Most donors were giving the minimum amount to be included in that giving bracket - exactly $25, $50, $100, etc. Although some donors might move up from the $25 level to the $50 level, or from $50 to $100 - the next step - to $250, $500 or $1000 was quite a jump. So, we had quite a few donors who'd given $25 for the past 5 years.

"I devised an incentive program for donors to gradually increase their gift without making up a ridiculous number of giving brackets. If donors increase their last gift by 5% - they are named a "Silver Donor"; an increase of 10% is a "Gold Donor"; 25% is a "Platinum Donor" and 50% or more is a "Diamond Donor".

"The response has been overwhelming. Last year, less than 15% of our donors increased their gift. This year, almost 50% are increasing. True, we're getting some odd amounts - a little old lady who has given us $25 a year for years sent in $37.50 so she could be a "Diamond Donor" - but, if she wants to be a Diamond Donor next year, she'll have to send in $56.25! So, it's nudging those stalled donors into the next bracket! "This is the first time we've done this, but what I plan to do is to list people under their regular gift club, and then denote using a "*" or something those that are Diamond, Platinum, etc. For example:

CONTRIBUTORS
Mr. & Mrs. John Doe *
Mrs. Ann Doe
Mr. & Mrs. Joe Smoe*

PATRONS
Mr. Paul Newman*
Mr. & Mrs. Robert Redford

* - Diamond Donors; increased gift by 50% or more"

From Mal: This is an outstanding idea - something else I plan to copy! Congratulations - and thank you.

More on Targeted Mailings

From another member: I'm coming in a bit late to the discussion, and this may have already been discussed... but I'm wondering if there's been any research about the age groups that respond best to direct mail, and whether or not there are certain appeals that work best for younger markets.

This is the first year we've really focused on our direct mail pieces, and for this first year, we haven't segmented our pieces simply because we wanted to have some sort of baseline. Young alumni (grads of the past ten years) have typically had the lowest participation rate in terms of overall giving to the university, and they are a group we really hope to focus on next year. What's surprising us is that we have a higher participation rate among young alums (compared to earlier generations) when we use direct mail (compared to telemarketing).

Is this indicative of generational preferences? Has anyone else noticed their younger markets responding better to direct mail than other solicitations?

(Just a note about non-donor solicitation: We've had 2.5 and 3.5 percent response rates, and average gifts around $80 -- even with a higher percentage of donors being young alums. This average gift is comparable to what we expect in telemarketing, so we are definitely seeing direct mail as a very cost effective way to reach our alums. These mailings have been to alumni who have not given in the past three years - so I'd add my two cents not to throw out those non-donors!)

In terms of targeting - what type of appeal seems to work best with younger markets? I agree that gender-based segmentation ought to work. For all I know, it's produced billions in revenue for commercial direct marketers. My experience with it in fundraising is, as I've said, limited. Unfortunately, all the clients who tried it made what I consider to be a fatal error: they addressed women as women. That alone probably doomed the efforts - if for no other reason than this: There are men named Shirley and Evelyn, and women named Chris and godknowswhatall.

Most of the clients I allude to made one further error: They overplayed the experiment. They addressed "women's issues" in the women's letter, and sleighted those issues in the men's version. That's not a good idea! People are whole people, and they resent being pigeonholed. "Women's issues" appeal to lots of men - and sometimes turn women off, especially if they feel they're being patronized. The only way I can see making gender segmentation work is by introducing much subtler differences into the copy - differences in tone, style, and approach; perhaps citing different examples; maybe looking at different aspects of a project, or making different arguments for it. Research shows, after all, that there is a difference between the attitudes and feelings of men and women. (As though we needed research to know that!)

The only catch is, to do this right, you'd probably have to do fairly extensive marketing research to learn what gender differentiation would most likely be effective. A stab in the dark at gender segmentation would surely be interesting, and it might even work. But it would be risky.

Developing Relationships

Here's another thought - which hopefully is obvious to everyone, but just in case... Several years ago, after my father died of cancer, my mother continued to receive direct mail solicitations addressed to him: Dear Dick.... The solicitations were for a political campaign, and the worst part of it was that the political candidate was the son of friends of my parents - someone (the parent) that my father had worked with for years. I understand that my dad was on a mailing list & the mailing list wasn't updated. But, because of the personal connection, my mother was very upset, angry, and hurt (particularly since it had been less than a year since my dad's death & she continued to receive these solicitations). My point, I guess, is this - pay attention! I know it's difficult when dealing with massive mailing lists - but it's also critical.

Any experienced fundraiser is likely to say that fundraising is about building relationships. Fine. But what does that MEAN? It means, on one important level, learning more about one another - acquiring information. Major donor fundraising and planned giving efforts invariably involve researching information about donors. Direct mail typically does not. But it should.

Mal concluded with this suggestion: "-think of how you can use direct mail as a TOOL. A fundraising mailing in its own right isn't always the right answer. The true value of direct mail derives not from the short-term money you manage to generate but from the long-term value of the donors you acquire, educate, cultivate, and upgrade. Bequests, in particular, can be the most important long-range outcome of a direct mail fundraising program."