Raiser Sharpe Tips » Donor renewal

How Angry Are Your Donors With You? Take this Quiz and Find Out.

Alan Sharpe — Fri, 18 Nov 2011 15:37:37 +0000

Have you upset one of your donors recently? Just how mad do you suppose they are at you, on a scale of 1 to 10? Take this quiz and find out.

1. Your major gift officer met a donor for lunch and ordered five martinis and spaghetti. 5 points

2. The folks in gift processing mailed a donation thank-you letter but it took over a month to arrive. 5 points

3. You spelled the donor’s name incorrectly. 5 points

4. Your donor asked for no fundraising appeals by mail, but your annual giving officer thought Christmas was an exception. 5 points

5. Your donor asked your office not to phone her, so your receptionist phoned her to say OK. 5 points

6. You asked for a donation in a donation thank-you letter. 5 points

7. Your donor’s spouse died and left you a six-figure bequest, but the folks in direct mail kept addressing your appeals to Mr. and Mrs. 5 points

8. A major donor asked your fundraising coordinator to send him your audited financial statements, but she was busy uploading a photo of her kittens to Twitter and forgot. 5 points

9. Your donor requested that you not acknowledge his gift in your annual report, but you did. 5 points

10. You told a major donor you would follow up in a week, but your Great Dane ate your day planner. 5 points

11. You engraved your wealthiest donor’s name on your donor wall but put it under the wrong giving level (a smaller one). 5 points

12. Your folks in gift processing duplicated the donor’s name in your database. You mailed two appeals to the same person at the same address until asked by the donor to stop. 5 points

13. Your donor has supported you for 10 years but your appeal letters still address her as “Dear Friend.” 5 points

14. Someone put your major donor on hold and made her listen to the local radio station playing, “Give a Little Bit” by Supertramp. 5 points

15. You wrote to Jean Bradshaw as “Mrs.” He’s ticked. 5 points

16. You wrote to Sam Carling as “Mr.” She’s livid. 5 points

17. You wrote to Penelope Bradshaw, 21, as “Miss.” Please hold, an officer from the Canadian Human Rights Commission will be with you in a moment. 5 points

18. Your organization asked for another gift before thanking your donor for the last one. 5 points

19. Your donor attended last year’s gala but was not invited to this year’s gala. 5 points

20. Your new major gifts officer sat next to your most generous supporter at your silent auction, and remained silent. 5 points

How Angry is Your Donor?

Add all your points.

0 points = put on your wings

5 – 15 = blush a little

20 – 40 = blush a lot

45 – 70 = update your resume

75 or more = make sure your last will & testament is current

Need help with your direct mail program?

Download this book now.

Mail Superiority: How to Run a Profitable Annual Direct Mail Fundraising Program.

Need help?

If you need help raising money through the mail , give me a call at Harvey McKinnon Associates, at (416) 537-2904 ext. 212

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Why Average Lifetime Donor Value is the Most Important Metric in Fundraising

Alan Sharpe — Fri, 23 Sep 2011 15:04:37 +0000

Nothing says more about the success of your fundraising program than the lifetime value of your average donor.

Average lifetime value, of course, is the gross income you receive from your typical donor during the time the donor is giving to your charity.

Donors to your charity give different amounts. Some give a lot. Some give a little. Some give often, some give seldom. Some give one gift. Others give multiple gifts. Some give for a year. Others give for decades. Some give through one channel (direct mail, for example). Others give through multiple channels (direct mail, online, phone, special events).

Your goal as a fundraiser is to figure out how long your average donor gives to your organization, and how much that donor gives during that “lifetime.” You should know what this number is for every fundraising channel, and for all channels combined.

If your average lifetime donor value is high, then your donors likely stay with you for a long time. You are doing a good job of donor retention.

If your average lifetime donor value is high, your average donor likely gives through more than one channel during her lifetime (direct mail, phone, online, face to face, for example). You are doing a good job of multi-channel fundraising.

If your average lifetime donor value is high, your typical donor likely increases the size of her gift over time. You are doing a good job of donor upgrading.

If your average lifetime donor value is high, you are likely moving your donors up the “donor pyramid,” from single annual gifts, to multiple monthly gifts, to larger gifts (major or capital), and, eventually, to a bequest when they pass away. You are doing a good job of donor engagement and stewardship.

If your average lifetime donor value is high, you are obviously watching your key donor and revenue metrics, such as net cost to acquire a donor, average gift, attrition rate, renewal rate, average revenue per year per donor, average number of gifts per year per donor, return on investment, cost to raise a dollar, and so on.

If your average lifetime donor value is low, or shrinking, you likely have one of the following problems:

You are attracting the wrong kinds of donors (one-gift, low-dollar)
You are over-soliciting, or under-soliciting
You are treating your donors as paycheques, not people
You are not trying to move your donors up the donor pyramid
You are not segmenting your donors based on recency, frequency and monetary value, and are therefore not maximizing the value of each donor in your database

When your average donors stay with you for a long time, and increase their level of commitment over time, you are clearly creating and maintaining meaningful, mutually beneficial relationships with your supporters. You know that because your average donor lifetime value tells you so.

Give Your Donors What They Want so You Get What You Want

Alan Sharpe — Mon, 12 Sep 2011 00:55:22 +0000

Thank your donors promptly and personally every time they mail you a gift.

Describe how you are using the donor’s last gift the way the donor intended. The majority of long-term, faithful donors give to make a difference, and many will not give again until they know their last gift was put to good use the way they wanted—so show ample proof.

Treat your donors as thoughtful investors who care how their money is spent.

Don’t appeal to short-term motivators, such as fear, that raise plenty of short-term funds but not enough long-term friends.

Give your donors enough information to make an informed opinion about giving. Anticipate the questions and objections that thoughtful people will raise about your organization, your mission and your ask, and answer them in your letter.

Help your donors solve a problem. Donors will not throw money at an impossible situation. They need to have hope that their donation will meet a need. So offer hope.

Don’t promote future tax benefits alone. Instead, stress the difference a donation makes in lives changed and problems solved today. You want donors who believe in your cause, who want to help others more than they help themselves.

Instead of asking for funds that your organization needs, invite donors to accomplish their goals by making the world a better place (by mailing you a gift) .

Think long term. Raising money with mail is a long-term commitment that you need to make to your organization and to your donors. You and I could put together a tear-jerking, guilt-inducing package that manipulated donors into parting with large sums of money, but those kinds of appeals are not sustainable year after year. Take the long-term view.

Remember that your donors are people. And people give to people to help people. This basic fundraising truth means that you must state your organizational needs in human terms whenever possible. “Human interest sells,” as Mal Warwick puts it. You must translate your case for support from non-profit-speak into flesh and blood. Donors want to know how their gift will help people. So give your donors what they want—heart-warming stories about people in need, and how you help them thanks to your donors’ generosity.

Boost Your Fundraising Letter Response Rates and Revenue with Five Simple Segmentations

Alan Sharpe — Fri, 12 Aug 2011 14:50:56 +0000

I was 44 years old, about to adopt my second child, and was sitting in my lawyer’s office, looking over his updated draft of my will.

Everything looked fine except for one small mistake. Throughout the document, he referred to me as Neil Sharpe. “I, Neil Sharpe, being of sound mind and body, do declare this to be my last will and testament.”

Well, it certainly was my last will and testament using that lawyer, because my name is not Neil. The will he drafted was invalid. It would never have worked after my death, or Neil’s death, for that matter.

Your fundraising letter can flop just as badly with your donor if it sounds as though you don’t know her. The same letter mailed to every donor in your database can’t help but sound generic and impersonal. The same letter that thanks current donors for their support sounds silly when addressed to someone who hasn’t given a donation in three years.

So if you’re a direct mail fundraiser and you want to increase your response rates or gross revenue, invest in some simple letter personalization. Invest in simple letter changes that show your donor that you know him. The more personal you make your letter, the more likely your donor is to read it, believe it, and respond.

The easiest way to personalize your letter is to segment it into donor groups. There are five main donor groups: new donors, current donors, lapsed donors, monthly donors, giving-circle donors.

1. New donors
A new donor is someone who has just given her first gift, and has never given before. In your letter, acknowledge that the donor is new. Thank her for that first gift. Thank her for joining a group of like-minded people (your other donors). Welcome her.

2. Current donors
A current donor is someone who has given a donation during the last 12 months. So acknowledge that. You can refer to his “recent support,” or “continued support.’ Or you can even mention that you are grateful for his most recent gift, received on “such-and-such a date.”

3. Lapsed donors
A lapsed donor is someone who hasn’t given a gift during the last 12 months, but did give a gift in the 12 months before that, or the 12 months before that, or the 12 months before that. A donor who hasn’t given a gift in four or more years isn’t lapsed, but dormant.

Let a lapsed donor know that you miss her support. Don’t speak to her as a current donor. Don’t say “your recent gift is changing the world,” because it isn’t. It was spent long ago. The secret with lapsed donors is to say you miss them rather than their money. “I haven’t heard from you for a while” sounds more personal and friendly than, “Neil, you haven’t made a gift in over two years.”

4. Monthly donors
No need to tell you what a monthly donor is. But donors who give a gift every month are usually excluded from your regular appeal letters, so if you are writing them, asking for a special gift, let them know that you know that they already support your charity with an automatic gift every 30 days. Show your gratitude for their regular support. Acknowledge that you are asking them to make an extra, special gift above and beyond their regular monthly one.

5. Giving-circle donors
If you have a mid-level donor program or a giving circle for donors who donate above a given level (the President’s Circle for $1,000 donors, for example), then these donors will be especially offended if you don’t acknowledge their membership. So do. Enough said.

Dividing your letter into four segments is easy. Simply write the letter, then reserve a paragraph on page one where you speak to each donor segment individually (personalizing page one of your letter but leaving the following pages generic is the cheapest way to personalize). Then give your lettershop the text for your letter, show where the variable paragraph appears, and supply four paragraphs of text to go into that place in the letter, a different paragraph for each donor segment. Then give the lettershop your mailing list, and, for each donor in the list, name the donor segment the donor belongs to.

Personalization works. I once worked at a national charity. I turned their generic fundraising letters into personalized letters that spoke to each donor individually, and showed the donor that the organization knew who they were. My executive director, who signed all the letters, began receiving all sorts of mail and phone calls from donors, thanking him for his letters. As he travelled the country and met with donors, he heard the same refrain: “Thank you so much for your letters. They sound like they’re written just to me.”

Which isn’t surprising, since they were.

Learn More
Attend my six-part tele-seminar, How to Run a Successful Direct Mail Fundraising Program. Taught over the phone six Saturdays in a row. My most popular seminar. Starts September 3, 2011. Early Bird Special expires August 27, 2011. Details.

Need help?
If you need help writing, designing, personalizing or mailing your fundraising appeals, or managing your direct mail fundraising program, give me a call at Harvey McKinnon Associates, at (416) 537-2904 ext. 212

Five Indisputable Laws of Direct Mail Donor Acquisition

Alan Sharpe — Fri, 22 Jul 2011 14:49:55 +0000

I am not a prophet, I am not the son of a prophet, but I do serve on the board of a non-profit. And I’ve discovered through the years that charities who succeed at acquiring donors through the mail obey five immutable laws of direct mail fundraising. These laws aren’t carved in stone. But they should be.

Law #1: You Will Mail at Least One Campaign a Year
The only way to consistently grow your donor database and increase your revenue is to acquire new donors every year. If you go a year without mailing a donor acquisition package, you will experience a drop in current donors, a drop in new donors, and a drop in revenue.

Law #2: You Will Establish a Control Package
The key to success in direct mail donor acquisition is to acquire as many donors as possible at the lowest cost. The key is to establish as quickly as possible which direct mail package generates these results for you. Mail different packages to the same lists and see which package pulls in the most donors for the lowest cost. The winner becomes your control package. Mail that control package every year, and test other packages against it (test letter length, case for support, premiums, package design, inserts and so on), until a test package eventually outperforms your control package. Some control packages are so successful they are still in the mail after a decade.

Law 3: You Will Test Lists
The most important factor in your success at acquiring donors through the mail is not what you mail or when you mail but who you mail. You can mail a terrific letter to a lousy list and it will bomb. You can mail a mediocre letter to a terrific list and it can deliver acceptable results. The only way to discover which lists generate the most donors at the lowest cost is to test lists.

Law #4: You Will Interpret Your Results Correctly
Don’t get distracted by your Average Gift, Response Rate, Net Income, Cost Per Piece or Cost to Raise a Dollar. The only number that matters in acquiring new donors with paper and postage is Net Cost Per Donor Acquired.

Calculate your Net Cost Per Donor Acquired by dividing your net income (income minus expenses) by the number of donors acquired.

The biggest mistake you can make is thinking that a donor acquisition mailing is a failure if it loses money. Direct mail donor acquisition mailings almost always lose money. But they gain donors. The key metric is not how much money you gained or lost, but how much money you had to spend to acquire each new donor. Don’t look at costs, but cost-effectiveness.

Law #5: You Will Focus on Lifetime Value
You can acquire hundreds of thousands of donors cost-effectively every year but still fail at donor acquisition. That’s because the success of each acquisition campaign depends on how many new donors go on to make a second gift, a third gift, a fourth gift (you get the idea), and how many of these same new donors eventually increase their giving, join your monthly giving program, contribute to your capital campaigns, give a major gift and leave a legacy in their wills.

The key to donor retention, subsequent gifts and increased lifetime value is stewardship. Thank your new donors promptly (with a thank-you letter), welcome them to your organization (with a welcome kit), demonstrate how their gift is making a difference (with a donor newsletter), and ask them for a second gift (with a fundraising letter) sooner rather than later.

Learn More
Read Mail Superiority: How to Run a Profitable Annual Direct Mail Fundraising Program.

Need help?
If you need help acquiring donors through the mail, give me a call at Harvey McKinnon Associates, at (416) 537-2904 ext. 212

How to Get a Second Gift from a New Direct Mail Donor

Alan Sharpe — Tue, 14 Jun 2011 14:05:47 +0000

If your charity is at all typical, you will lose 65% of the donors you acquire by direct mail in the first year alone.

In other words, only 35% of the donors you acquire through direct mail will give you a second gift. Most donors acquired through the mail are acquired at a net loss (you must spend money to acquire each donor), so you can see how important it is for you to do all that you can to encourage first-time donors to give again.

Here are the main reasons new donors do not give a second gift:

1. You acquire the wrong kind of donor
Donors acquired with premiums, trinkets and lotteries tend to fall away at a higher rate than donors acquired with a simple ask.

2. You ignore them
If you do not thank your new donors soon enough, or tell them what you are doing with their gift, or welcome them to your organization, they will not likely mail you a second gift.

3. You write them too often
If all you do with new donors is add them to your mailing list and then bombard them with an appeal letter each month, you will likely lose them.

4. You do not ask again soon enough
The key to securing a second gift is to ask early and ask often. Your enemy is the calendar. For every week that elapses after you have received the donor’s first gift, and where you do not ask for a second gift, your chances of losing your newly acquired donor increase. The worst thing you can do is delay four, five, six months or longer before going back to your new donor for a second gift. By that time, many will have forgotten that they even made the first gift.

To increase your percentage of new donors who go on to give a second gift, do four things:

1. Thank them promptly, personally and particularly for their first gift.

2. Send them a welcome kit. Tell them why they are a valuable part of your organization. Include anything in the welcome kit (brochure, newsletter, welcome letter, FAQs, testimonials) that draws donors closer to your mission and the people you help.

3. Show them how you are using their gift to change the world. You can do this most effectively with a donor-centred newsletter filled with pictures and stories that show donor dollars at work.

4. Ask for a second gift within eight weeks of receiving the first gift. The single largest factor in determining if you receive a second gift is how long you wait before asking for it. The longer you wait, the less likely you are to secure that all-important second donation.

Learn More
Read Mail Superiority: How to Run a Profitable Annual Direct Mail Fundraising Program.

Need help?
If you need help acquiring, renewing or upgrading direct mail donors, give me a call at Harvey McKinnon Associates, at (416) 537-2904 ext. 212

Fundraising Letters: Casanova Never Mailed One Love Letter a Year, So Neither Should You

Alan Sharpe — Fri, 06 May 2011 14:45:05 +0000

The worst thing you can do in direct mail fundraising is mail only one appeal a year.

Direct mail is part of your annual campaign, yes. But that doesn’t mean you should mail only one fundraising letter every 12 months. Annual doesn’t mean annually in direct mail fundraising. Here’s why you must ask for gifts by mail more than once a year.

Donor’s Move
In North America (where I live and work), one in five (20%) businesses and individuals move each year. You can discover who plenty of these people are, and get their new address, by using the postal service’s National Change of Address service. But it only tells you who has moved during the past six months.

So if you mail your annual appeal in December, you’ll get the new addresses for everyone in your database who moved during the six months before December only. Everyone who moved during the six months since last December you’ll lose. And if you lose a donor you lose the donation.

Direct Mail Donors Give from Discretionary Spending
When your direct mail appeal arrives in the mail, your donors decide to give or not to give based on how much cash they have on hand. If they have money to donate, they give. If money is tight, they don’t.

If you mail only once a year, and if your appeal lands when money is tight, you lose. But if you mail four times a year, or six times a year, more than one of those appeals is likely to arrive when your donor has money to give away.

Other Charities are Asking Even if You’re Not
Your donor, if she is typical, supports 13 charities besides yours. These charities are writing to your donor throughout the year, asking for donations. If she hears from them often but hears from you seldom, who do you suppose will receive her donation?

Fundraising is All About Relationships
You can’t have a close, rewarding relationship with someone you hear from only once a year. Healthy relationships require healthy communication. Not too much, or you become a pest. And not too little, or you become a stranger.

Your direct mail fundraising program needs to mail at least four appeals a year to maintain strong donor relationships and get the most from your donors. Generally speaking, the more often you ask, the more money you’ll raise. Naturally, you can ask too often and drive away your donors. But you can also ask too seldom, and lose both revenue and donors.

Learn More

Read my book Mail Superiority: How to Run a Profitable Annual Direct Mail Fundraising Program. Learn the proven, step-by-step process for raising funds and friends cost effectively, year after year. Available in paperback and as an e-book.

Boost Direct Mail Fundraising Response Rates Three Ways

Alan Sharpe — Mon, 04 Apr 2011 12:25:18 +0000

What percentage of your donor base sends your organization a gift each year? If you are at all typical, less than half of your donors at any given time are active. So how can you increase the percentage of your donors or members who participate in your fundraising? Here are some ideas.

Offer more than a reply device
Donors like to give in different ways. So offer as many ways as possible for your donors to send you a gift. Consider these:

special donation page on your website
toll-free number
special Donate Now button in your email newsletters
payroll deduction by employer
remittance envelope with your newsletter
automatic monthly gift from bank account or credit card
reply device and postage-paid return envelope

Keep donors and members informed-and motivated
Why do annual donors stop giving? Many quit because they feel unappreciated. In her book, Thanks! A Guide to Donor-Centred Fundraising, Penelope Burke cites the findings of The CPP Survey on Giving, Volunteering and Participating, which shows that around 45% of donors “stop giving or give less than they could have . . . for reasons that are tied to lack of meaningful information or to a feeling that their giving is not appreciated.”

Wise stock market investors read the stocks page in the business section. They want to know how well their investment is performing. They attend annual shareholder meetings for the same reason.

Today’s donors are the same. They mail your organization a gift that pays no interest and returns no dividend but they still think of it as an investment. What they want in return is news from you on how well their investment is performing. Next to receiving no thanks at all, nothing infuriates donors more than being asked for another gift without knowing if the last one they mailed made a single bit of difference.

So keep your donors informed-using newsletters, updates, photos, email bulletins, annual reports, phone calls and more.

Write a longer letter
Tests show that longer letters often pull a higher response rate than shorter letters. You’ll need to test this with your organization. If you generally mail one-page letters, go for two pages. If you usually write two pages, try four. Just make sure your longer letters remains factual, informative, compelling and donor-centred.

Learn More

Handbook Number 13
How to Increase the Size and Frequency of Donor Gifts with Fundraising Letters.
Tested, proven tactics for raising more money from your current direct mail donors (with their cheerful participation).

Know Your Six Fundraising Numbers or Die

Alan Sharpe — Mon, 28 Mar 2011 20:48:38 +0000

If you appeared on the reality TV show Dragon’s Den (or Shark Tank), pitching your charity to investors, would they give you any money?

Watch a few episodes of either show and you’ll quickly discover the most common mistake wannabe entrepreneurs make: They don’t know their numbers.

They don’t know their costs. Or their break-even point. Or the size of their market. They don’t know the numbers that will persuade investors to fund their business venture. So they walk away without a penny.

In fundraising, you live or die by your numbers. You can’t hope to get your budget approved (or hold onto your job) unless you can demonstrate that you know your business. And your business is numbers.

Here are the six numbers you need to know cold.

1. Net Annual Growth in Active Donors
Every year you add donors through acquisition and lose donors through attrition. The difference between these two numbers is your net growth. It’s either positive or negative (or unchanged–unlikely). Don’t measure just the number of new donors you add annually. That number might look impressive, but it’s false. 80,232 donors acquired minus 81,439 donors lost isn’t growth.

2. Net Cost Per Donor Acquired
Figure out how much you need to spend to acquire a new donor for every channel you use (direct mail, face-to-face, online, direct response TV, special events, and so on). You need to know this number to win board approval for a donor acquisition budget. Donor acquisition costs money. The other number you need to know is Lifetime Donor Value by Channel (below).

3. Attrition Rate by Channel
Donors die, lose their jobs, move, retire, divorce and do other disagreeable things that make them stop supporting your cause. Although many of these things are beyond your control, you still need to know the number of donors you lose each year, expressed as a percentage of your active donors, and calculated for every channel you use to raise funds. When you know your attrition rate, you know how many new donors you must acquire each year just to stop your file from shrinking. Because it is shrinking.

4. Renewal Rate by Channel
What percentage of your donors who give a gift one year also give a gift the next year? That’s your renewal rate. Your renewal rate indicates how passionate your supporters are about your cause. It also indicates how successful your donor stewardship program is.

5. Second Gift Conversion Rate
Most people who make one gift to a charity never make another. If you have a low Second Gift Conversion Rate, you either are attracting donors who are unlikely to make a second gift, you are not treating your first-time donors properly, or you are not asking for that vital second gift soon enough (or all three).

6. Lifetime Donor Value by Channel
How much does one of your average donors contribute to your charity in her lifetime? That’s the number you need to know to justify your investment in donor acquisition and stewardship. Include in this number every gift ever given, including annual gifts, major gifts, special event gifts and bequests. Know this number for every channel you acquire donors by.

By the way, if you master these six numbers, and adjust your fundraising program accordingly, you’ll have the knowledge and expertise you need to negotiate another vital fundraising number: your salary.

Learn More:
Direct Mail Fundraising Arithmetic Demystified.
Master the 14 most common formulas that help you measure-and improve-your DM fundraising results.

Why You Will Lose Donors Today, Guaranteed

Alan Sharpe — Fri, 04 Mar 2011 13:36:29 +0000

What does your charity have to do to guarantee that some of your donors will stop giving today?

Nothing.

You are going to lose donors today whatever you do. Or don’t do.

Donor attrition is a fact of life at every non-profit organization. No matter how long you’ve been around, no matter how large your base of support, no matter how popular your cause, no matter how much your donors love you, some of your donors will fall away today and never give you another cent.

Today you will move backwards, no question. If your charity is small, you will lose a few donors. If your charity is large, you will lose more donors. But either way, you will have fewer donors today than you did yesterday. Your database may contain the same number of records. But the number of donors in that database that will give you another gift just shrank. And will shrink every day from today on. Here’s why.

1. Donors die
You have no control over this, or shouldn’t have. A percentage of your donors will pass away each week, and their gifts will cease the same day they do.

2. Donors lose their jobs
When the breadwinner loses a job, the first thing to be cut is discretionary spending, such as take out food, movies and charitable gifts.

3. Donors move
Sometimes a lapsed donor hasn’t lapsed at all. They’ve simply moved and forgotten to give you their new address.

4. Donors’ credit cards are declined
If your donors give by credit card through your monthly giving program, you understand donor attrition better than most fundraisers do. You see it on your spreadsheet. A percentage of your donors’ credit cards either expire each month and you never get the new expiry date. Or their donation is declined because the card is maxed out, or the card was stolen. Some of these donors you will never re-activate.

5. Donors retire
Some donors retire with little or nothing in retirement savings. Their pension supports them, though barely. So they save where they can. And that means reducing the number of charities they support, including yours.

6. Donors grow infirm
Some donors develop dementia or terminal illnesses and hand over their financial affairs to a power of attorney. Unless your donor specifies to her POA that donations to your charity are to continue, they won’t.

7. Some donors intend to give only one gift
Many of the gifts made to charities in lieu of flowers are made by strangers with no intention of supporting that charity again. People make these gifts only to honour the wishes of the family of the person who passed away.

As you can see, all of these reasons are out of your control. They are “natural” donor attrition. They account for at least 7% of all donors who stop giving.

This unavoidable, daily, natural donor attrition is the primary reason you need an ongoing, proven, board-approved donor acquisition program. Obviously, if you have dreams to grow your organization, you need to acquire new donors. But you also need a donor acquisition program even if you don’t want to grow. You need to acquire donors just to replace the ones who are falling away at the rate of about 7% of your active donors each year. Otherwise, you’ll be shrinking. Guaranteed.

Handbook Number 22
How to Recover Your Lapsed Direct Mail Donors.
Discover the financial rewards, savings and long-term benefits of wooing and winning your donors all over again using direct mail.

Dear Alan, What do you Recommend for Reminder Letters?

Alan Sharpe — Fri, 04 Sep 2009 10:20:59 +0000

Dear Alan,
Do you have any suggestions for the (post direct mail) reminder letter? I would love your thoughts on the letter as well as the donation form.
Thanks, Shannon Brown

Dear Shannon,

Thank you for writing. Just so everyone is clear, we’re talking here about a “reminder letter” or “follow-up” letter that a non-profit mails a few weeks after sending out a major appeal. The reminder letter is mailed only to donors who have not responded to the first appeal, and “reminds” them about the need discussed in the earlier mailing, and asks them to respond with a donation. We are not talking about the typical renewal series that member-based organizations mail to members to renew their membership. (“This is your final notice: Renew today!”)

Here are my observations about reminder letters:

In all of my years writing fundraising letters for non-profits, I have written reminder letters for only one client.
Mal Warwick (How to Write Successful Fundraising Letters, Revolution in the Mailbox), Stephen Hitchcock (Open Immediately!), Benjamin Hart (Fund your Cause with Direct Mail), Roland Kuniholm (Maximum Gifts by Return Mail) and other direct mail fundraising experts have little or nothing to say on the topic.
Reminder letters are usually mailed by non-profit organizations that mail only once or twice a year. Any organization that mails six, eight or more times in any 12-month period could not send reminder letters because the reminders would arrive in mailboxes days before the next appeal.
Reminder letters are most effective when the donor has a plausible deadline to meet, such as year-end or the conclusion of a capital or special campaign.

If you’re going to mail a follow-up mailing, I recommend the following:

Don’t mention in your first letter that you will be following up with another letter
Keep the letter shorter than the one that it is following up on
Mail the reminder letter in a different envelope
Tell the donor that the letter is a reminder, that you have not heard from them, and that you need them to respond
Re-iterate the case for support
Say something original (don’t just repeat the first letter paragraph for paragraph)
Go for the emotions
Give the donor a deadline for responding, and give a reason for that deadline
Write the reminder letter when you write the first one
Use the same reply device or donation form, but print across it in bold letters LAST CHANCE TO RESPOND or something similar
Mail the reminder letter to your most faithful and most generous donors
Decide early on who will not receive the reminder (likely donors whose anticipated gift is not large enough to make the reminder mailing cost-effective)

Christmas Fundraising Letters: Make Your Appeal Original but Contemporary

Alan Sharpe — Fri, 10 Oct 2008 11:05:57 +0000

If your non-profit organization is typical, your direct mail program raises 50 percent of its revenue with one mailing-the Christmas appeal. More people give more money to the “Holiday Season” letter than they give to any other single mailing all year. Your goal this Christmas is to persuade these generous donors to give again. Here’s how.

1. Make your message original
Just because Christmas commemorates Jesus’ birth doesn’t mean your letter has to dwell on the events that took place around the manger. You don’t have to show donkeys. Instead, consider the other characters in the drama and find a way to present your case for support through them.

For example, Mary and Joseph are living in a land occupied by a foreign army (sound familiar?). Joseph’s fiancé is pregnant with a child that isn’t his, but he stays with her and raises the child as his son anyway. Uncommon. The prevailing emotion surrounding the birth of Jesus is fear. The shepherds tremble in the fields. Herod acts out of fear. Mary and Joseph flee for their lives to Egypt.

2. Tie your Christmas appeal to current events or current themes
The key to connecting with your donors through paper and postage is relevance. Your must present a need that they both understand and care about. One way to demonstrate the relevance of your cause is to tie your case for support in your Christmas letter with the events that are uppermost in your donors’ lives right now.

For example, right now, (October 2008), folks in the United States are electing their next president and folks in Canada are electing their next prime minister. The people who lived in Israel during the time of that first Christmas had no voice and no vote, living as they did under a military dictatorship.

Again, your donors are living through a time of tremendous financial volatility. Banks are going bankrupt. Millions are losing their homes to foreclosure. And the stock markets worldwide are crashing. Can you tie any of these themes to the events that Christmas celebrates, such as “peace on earth,” “goodwill to all men,” and the world’s obvious need for some divine intervention. I know you can.

So I suppose you can see that what I recommend you do at Christmas is say something about the season that your readers have never thought of before (be original) while showing how closely Christmas, and your need for funds, is more relevant and obvious today than ever before. The gifts will come.

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Five Vital Signs of a Healthy Direct Mail Fundraising Program

Alan Sharpe — Fri, 04 Jan 2008 16:02:30 +0000

I spent last night visiting two hospitals with my four-year-old son, Spencer. I noticed that the staff at each hospital took the same vital signs (pulse, oxygen saturation, temperature, breathing) to determine Spencer’s health. Nurses and doctors miles apart, working for different hospitals, on different shifts, knew the same things to look for to determine the health of their patient.

You must do the same with your direct mail fundraising program. Here are the five vital signs to watch for to make sure your program is healthy, and remains healthy.

Vital Sign #1: Your donor file. It’s growing.
Death is unavoidable, even in fundraising. Friends die. A healthy direct mail program includes multiple donor acquisition mailings each year to replace donors who die or otherwise “lapse,” and to grow the donor file even further so there is a net gain in new supporters yearly.

Vital Sign #2: Your friends. They are loyal.
Experienced annual giving officers know that the main goal of fundraising letters is not to raise money but to retain donors. Make friends for life and they will donate. A robust direct response fundraising program aims to keep as many donors as possible, and avoids methods (sweepstakes and premiums, for example) that attract too many short-term donors. A well-run program mails original, personal, heart-felt thank-you letters for every gift within 24 hours, and mails newsletters to keep donors informed about how their gifts are changing the world.

Vital Sign #3: Your numbers. You know them.
Successful directors of development know that you can only manage what you can measure. And the beauty of direct mail is that you can measure just about everything. What is your attrition rate? What is your cost to raise a dollar? What is your cost per piece? If you’re watching your numbers, you know the answers.

Vital Sign #4: Your testing. It’s thorough.
Arrive at the emergency department with a high temperature and the nurse will likely give you something for it, such as Tylenol. Medical staff don’t simply measure your vital signs and chart them. They take remedial action. If you’re running a healthy direct mail program, you are doing the same, through testing.

Which of those 11 lists generated the highest response and highest average gift at the lowest cost? Which package generated the highest response, the package with the brochure or the one without? Which ask generated the highest average gift, the one for the new kitchen or the one for the new mothers? If you are testing your lists, your creative and your cases for support, you aren’t going with your gut anymore. And your program is healthier for it.

Vital Sign #5: Your donors. You treat them differently.
Arrive at the hospital pregnant, they take you to obstetrics. Arrive broken, they take you to orthopedics. A hospital treats its patients according to the patients’ needs, not the hospital’s. A healthy direct mail fundraising program does likewise. It solicits and respects the goals, desires and wishes of its donors.

Those who want to give monthly, can. Those who want an annual receipt, get it. Those who want to receive updates on your work in Darfur by email, not by mail, get them. Those who supported your new initiative with a $2,000 gift are delighted that your subsequent appeals cover the same need, acknowledge their support of that need, and speak to them as a partner and not as a paycheck.

One advantage to raising money through the mail is that you don’t have to wait until you see signs of sickness before you seek treatment and watch your health improve. Because direct mail is testable, and because others have gone before you, you can avoid plenty of the maladies that have felled perfectly worthy causes. Watch these five vital signs and you should avoid the emergency department.

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Reduce Direct Mail Donor Attrition in Four Ways

Alan Sharpe — Fri, 09 Nov 2007 13:25:11 +0000

Your non-profit loses 15 percent of its donors every year, if you are typical. What can you do to reduce that percentage?

First, understand that all non-profit organizations lose donors. Some donors stop giving because they stop living. Others lose their jobs, get a divorce, retire or suffer a business loss. These things are outside of your control.

But some donors fall away because of something you do. Or don’t do. Here are a few proven ways to keep your direct mail donors inspired, motivated and giving.

1.Thank donors promptly for every gift
Pick up the phone or mail a thank-you letter or card within 24 hours of receiving every gift, regardless of its size or source. The longer you delay, the more likely you are going to be perceived as ungrateful or disorganized, or both. Donors who are thanked promptly for their gifts are more likely to give again.

2. Show donors how you are using their gifts to change the world
I read in this month’s (November 2007) issue of a Quaker peace magazine that the war in Iraq is costing American taxpayer $720 million a day. That’s a lot of groceries. With no end to the occupation or the killing in sight. As the deaths of American soldiers continue, and as the costs of the war continue or increase, popular support for this war, such as it is, will decrease. No one wants to throw their hard-earned money at a losing venture.

One sure way to encourage repeat donations and reduce donor attrition is to show donors that their gifts are changing the world, making a difference, changing lives.

3. Balance informing with asking
Don’t mail more newsletters than appeals, and vice versa. Strike a balance between asking for funds and informing donors how you are using those funds. Mail an appeal, then a newsletter, then an appeal, and so on.

4. Acquire donors who are most likely to remain loyal
One way to reduce donor attrition is to attract loyal donors in the first place. Before you mail a direct mail donor acquisition package, make sure the people on your list meet your profile of an ideal donor. Avoid front-end premiums and sweepstakes that tend to attract low- dollar donors who vanish after their first gift.

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How Donor Acquisition Mailings Differ from Donor Renewal Mailings

Alan Sharpe — Fri, 28 Sep 2007 15:36:36 +0000

Your job as a direct mail fundraiser is to make new friends every and keep them for as long as possible. And to do that you need two kinds of letter, acquisition and renewal. Understand the differences between these two letters and you’ll improve your results.

PURPOSE
Acquisition mailings are designed to persuade non- donors to mail you their first gift. They aim to acquire donors. Renewal mailings are designed to encourage past donors to give again. Their aim is to renew, or re- solicit, existing donors.

AUDIENCE
Acquisition mailings are mailed to strangers.
Renewal mailings are mailed to friends.

COST
Acquisition mailings tend to be inexpensive, costing anywhere from $0.50 to $1.00 a piece.

Renewal mailings tend to be more expensive, costing anywhere from $0.75 to $7.00 a piece.

PERSONALIZATION
Acquisition mailings, to keep costs down, tend to be one-size fits-all. They rarely involve any personalization beyond the salutation.

Renewal mailings tend to be more involved, and may include personalized salutations, personalized ask strings based on the donor’s previous giving levels and personalization in the body of the letter.

SEGMENTATION
Acquisition mailings are usually mailed to everyone on a prospect list.

Renewal mailings are usually segmented so that each donor segment in a house list (monthly donors, major donors, lapsed donors, first-time donors) gets a different package.

PREMIUMS
Acquisition mailings often include premiums (personalized note pads, return address labels, greeting cards).

Renewal mailings rely less on premiums.

FREQUENCY
Acquisition mailings are mailed only a few times a year (somewhere between one and four times a year).

Renewal mailings are mailed around six times a year and as often as 12 times a year.

RESPONSE RATES
Acquisition mailings tend to generate acceptable response rates of between 0.5% and 2.5%.

Renewal mailings tend to generate acceptable response rates of between 6% and 12%, sometimes as high as 20%.

NET-EFFECTIVENESS
Acquisition mailings usually lose money (but gain donors).

Renewal mailings almost always generate a net return.

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Direct Mail Fundraising is a Program, Not a Campaign

Alan Sharpe — Fri, 13 Jul 2007 11:39:04 +0000

Before they hired me as their director of development, and before they ran out of money and laid me off, a non-profit organization whose name is unmentionable ran an unmentionable direct mail program.

It wasn’t a program as much as a series of last-minute campaigns. One particularly notorious campaign ran the Christmas before they hired me. As the inflexible deadline loomed to get their last donor newsletter of the year into the mail, the staff procrastinated and put out fires in other departments until the deadline came and went but the newsletter didn’t.

The organization got so far behind that the drop-date for the year-end appeal arrived and they still hadn’t dropped their final donor newsletter in the mail. So, to save money, or so they thought, the person in charge, if I may use that term, decided to mail both the newsletter and the Christmas appeal letter at the same time. In the same package. The appeal letter was inserted into a number 10 envelope, and the envelope was nested into the newsletter, and the newsletter was inserted into a poly bag.

The mailing, as they say, tanked. What should have been their most successful direct mail appeal (Christmas) became their worst. They suspect that donors found the poly bag in their mail, thought that it contained only a donor newsletter, and laid it aside for reading later, or opened the bag and read a page or two before heading out the door to give their money to Wal-Mart.

I tell you all this by way of warning. Direct mail fundraising is not a campaign. It’s not a series of mailings. It’s a program. A direct mail fundraising program.

So what’s the vital difference between a direct mail program and a direct mail campaign?

1. Planned program, not ad hoc mailings
To professional fundraisers, each letter they drop in the mail is not a one-off campaign or a “mailing” but simply one part of a year-long program, usually one that starts on January 1st and ends on December 31st. Raising money through the mail is complicated, expensive and time consuming. That’s why professional fundraisers plan their mailings months in advance.

2. Runs for 12 months
Unlike other some fundraising methods (such as banquets), a direct mail fundraising program runs for 12 months. Donors are solicited many times during the year. The program relies heavily on past donors to repeat their gifts. New donors are identified and acquired each year.

3. Repeated every year
Unlike some forms of fundraising (such as capital campaigns), the annual direct mail fundraising program is repeated year after year. The program has a start, a middle and an end, and then repeats itself the next year.

If you want to attract donors, raise funds, retain donors and move donors up the giving pyramid, you need to get with the program.

If you need help creating or improving your direct mail fundraising program, call Alan Sharpe today. He conducts direct mail fundraising program audits, and coaches clients one-on-one as part of his monthly coaching program.

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In Direct Mail Donor Acquisition, What You Win Them With Is What You Win Them To.

Alan Sharpe — Fri, 05 Jan 2007 16:05:43 +0000

Want to learn a vital lesson in donor retention? Here’s a tactic from Sunday School to avoid.

I know a Christian church in the United States that uses all sorts of tricks to attract neighbourhood children to its evangelistic Sunday School programs. One trick is to attach a ten-dollar bill to the underside of a chair in the classroom. The child who happens to pick that chair gets to keep the $10 Cool. Naturally, this trick leads to plenty of free word-of-mouth advertising in the neighbourhood on Monday.

Another trick is to give a toy to every child who brings a friend to Sunday School. Naturally, this means the church receives a steady influx of new students each Sunday.

But this church has a problem. And so do you, if you use similar tricks to attract new donors or members. Simply put, this church attracts children who care more about mammon than they care about God. Which is to be expected. A carnal incentive attracts a carnal student.

In direct mail donor acquisition, the equivalent of the ten-dollar note taped to the underside of the chair is the lottery or sweepstakes. The equivalent of the free toy is the free sheet of address labels.

The problem with lotteries and premiums, of course, is that they attract many donors. Of the wrong kind. Premiums boost response rates, even triple them on occasion, but usually at the expense of reducing the size of the average gift. And usually by attracting donors who will not renew their support and mail another gift unless they receive another lottery ticket or premium in return.

In the evangelical church circle that I run in, we say, “What you win them with is what you win them to.” In other words, if you use weight-loss classes or rock concerts or pizza parties to attract new people to your church, those are the things that the people come to receive. They come for the pizza, not the preaching. The music, not the message. The singing, not the Saviour. Churches and Sunday School programs that use these devices increase their numbers, but only for a season. When the incentives stop coming, the people stop coming.

Which is why I always encourage my clients to ask for the second gift first, in their mind at least. Before they mail the acquisition package with its expensive premium, they need to know what they are going to mail next to donors who respond. And what they will mail after that. You can’t mail bribes forever. You have to offer donors a better reason to respond than bundles of free greeting cards.

Your case for support must aim for donor aspirations, not greed. You want donors who are sympathetic with your cause, inspired by your goals, and motivated by altruism, not selfishness. As Kay Sprinkel Grace says in her book, Over Goal! What You Must Know to Excel at Fundraising Today, “You cannot motivate people; they are already motivated, and your job is to find out what motivates them and construct the right environment in which their motivation will flourish.”

So, when you plan your next donor acquisition mailing, aim to reach the hearts and minds of your potential donors, not just their wallets. And avoid incentives that attract one-time donors and guilt offerings. What you win them with is what you win them to.

If you need help with your donor acquisition or donor renewal program, give us a call, at 1 877 742-7732, or take a look at the following resources:

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How Long are your Donors? Improve Donor Tenure and You’ll Boost Fundraising Request Letter Revenue.

Alan Sharpe — Fri, 15 Dec 2006 15:48:13 +0000

How long do most of your donors contribute to your organization before they walk away? One year? Five? Ten? You should know.

Direct mail fundraising, like all effective fundraising, is about raising friends rather than raising funds. Raising a friend is always more important in the long term (the only term worth considering in fundraising) than raising a dollar. And losing a donor is always worse than losing a dollar.

Which means you must pay as much attention to your donor numbers as you do to your donation numbers. Response rate, average gift and cost-to-raise-a-dollar are donation numbers. They tell you how you are doing as far as funds are concerned. But donor attrition rate, renewal rate and average tenure are donor numbers. They tell you how well you are doing as far as your friendships are concerned.

Average donor tenure is a vital number to watch. Simply put, your average donor tenure is the length of time, measured in years or months, that your average donor gives to your organization before stopping. The for-profit world watches this number. You should, too.

Learn from the for-profit world
A lady at my church described to me her work as an insurance sales agent. She explained that most agents make a commission when they sell an insurance policy and make another commission when their customer renews that policy, usually a year later. “Clients, on average, buy a policy and renew it six times,” she said, “which means one sale delivers seven years of residual income.”

This lady knows her average tenure. Most of her customers stay with her firm for seven years and then go elsewhere. What about your not-for-profit organization? How long do most of your donors stay with you before going elsewhere? Find out today. And watch that number every year.

Naturally, you want to attract donors who stay with you for a lifetime. For many organizations, the lifetime value of a donor is about five years. That’s not a very large number. But at least you can start improving it once you know what it is.

You are in trouble if your donor base is shrinking each year. You are also in danger if most of the donors you acquire give you one gift and never give again. But remember that average donor tenure is just one button on your calculator. You also need to watch how much your donors give each year. Some may stay with you for decades but contribute little. Others may stay with you for a few years but donate enough to build a new wing on your facility.

You’d be disappointed if you lost all the friends you made each year, or if they hung around but showed no sustained interest in you. So measure and watch your average donor tenure. Then take whatever remedial action you think is necessary to keep your friendships with your donors healthy—and lengthy.

If you need help boosting your average donor tenure using direct mail, give us a call at 1 877 742-7732.

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Fundraising Letter Frequency: Mail Often Enough to Prove Friends Stay in Touch.

Alan Sharpe — Fri, 01 Sep 2006 17:34:38 +0000

Want to know one of the most vital truths in direct mail fundraising? Friends stay in touch.

Direct mail fundraising is like having a long-distance friendship by mail. You write. They write. You write. They write. And so your friendship grows. Because you stay in touch.

But how often should you write your donors? Once a month? Once a quarter? How often is enough? How often is too little? How often is too much? Well, consider these findings from a recent survey of leading non-profit organizations who work in a number of charitable sectors. See how often they wrote to this donor, and decide for yourself how often you should write to yours.

Here’s how the survey was conducted. On Mon, 12 Jun 2006, I made a donation of $20 to 20 non-profit organizations in Canada and the United States. Then I watched my mailbox and email inbox to see how many organizations wrote back to me over the next few months, and how often.

Today is Friday, August 31, so the results below show you how many times each organization corresponded with me during the 11 weeks following my donation. These results do not include the gift acknowledgement or thank-you letter the organizations mailed in response to my gift. These figures only show the number of appeal letters, newsletters, alerts or other correspondence that each organization mailed or emailed to me after they thanked me for my initial gift.

Eleven weeks after I sent them a donation, the following organizations wrote to me this many times:

Amnesty International: 7
Insight for Living: 6
Billy Graham Evangelistic Association: 5
Focus on the Family: 4
Ontario March of Dimes: 3
Trans World Radio: 3
Greenpeace Canada: 2
Mothers Against Drunk Driving: 2
Canadian Red Cross: 1
Samaritan’s Purse: 1
The Coalition to Stop Gun Violence: 1
World Wildlife Fund Canada: 1
American Friends Service Committee: 0
Canadian Cancer Society: 0
Covenant House: 0
London Health Sciences Centre: 0
National Down Syndrome Society: 0
Oxfam Canada: 0
Project Ploughshares: 0
Veterans for Peace: 0

So which organization got it right? I won’t tell you. But I will say this: the quality of your friendships with your donors depends more on how often you write than it does on what you write.

You know this to be true in your own friendships. Sometimes you get together with a friend over coffee, or phone her, and yak about nothing memorable at all. But you don’t care, because what you talk about is not as important as simply having that friend to talk to. She’s your friend. And friends stay in touch.

The more you value a friendship, the more you’ll stay in touch. Just ask your donors.

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Year-End Fundraising Letter Appeals: 7 Tips to Give Them a Boost.

Alan Sharpe — Thu, 01 Jun 2006 16:19:12 +0000

If your non-profit organization is like many others, you receive half or more or your contributed income at the end of the year as part of what used to be called the “Christmas Appeal.”

In recent years it has come to be known as, in politically correct North America at least, the “Year-End Appeal” or “Seasonal Appeal.”Which means your year-end appeal letter can make or break your year, financially speaking. Here are some tips on how to craft a winning year-end fundraising letter appeal package.

1. Keep it simple
One non-profit ministry that I shall not name mailed their year-end appeal letter in a poly bag along with their donor newsletter. They had been late in getting their newsletter in the mail and so, to save on postage, they mailed it along with the seasonal appeal letter. The campaign bombed, and bombed big. Donors, as far as we could tell, read the full-colour newsletter and ignored the letter that came with it. So my advice is this: keep your year-end appeal simple and focused on one goal: securing a year-end donation.

2. Be creative
You will be competing with other organizations in the mailbox. Every charity sends an appeal at Christmas. So stand out by mailing something creative. When I worked with Doctors Without Borders as their fundraising letter writer, they mailed a Christmas card to donors that donors then signed and returned to the organization with their gift. Doctors Without Borders forwarded the card to a volunteer doctor or nurse who was serving overseas, and whose name was on the card. The cards were greatly appreciated by the volunteers (many of whom were homesick at that time of year). The cards also involved donors in a way that warmed their hearts and motivated them to contribute.

3. Look back with thanksgiving
Use your year-end appeal fundraising letter as a way to thank donors for their support during the past year. Don’t list the names of every staff person you hired or promoted, or go on at length about happenings at head office. Instead, tell at least one heart-warming or compelling story that illustrates in vivid terms how your donors’ gifts changed lives. Use quotes from the people that you serve wherever possible. They add credibility and human interest to your letter.

4. Look ahead with anticipation
Also use this Christmas appeal letter to present your vision for the coming year. Show donors how their gift this “Holiday Season” will make a difference next year for your organization and the people you serve.

5. Use a seasonal theme
Try to tie your appeal to the season. Giving, presents, exchanging greetings, snow, “goodwill toward man” and other themes are popular at Christmastime. If you can tie your appeal to an emotion or sentiment that is already prevalent at the end of the year, and do so in a relevant way without being overly sentimental, do so.

6. Accentuate the positive
Please don’t appeal for donors to get your books out of the red and into the black. If you have a negative cash flow at year-end, don’t ask donors to correct it. They will see your predicament as your fault. Donors are not motivated to eliminate debt (unless it’s Third World debt). But they are motivated to change the world through a gift to your organization. So present your appeal as an opportunity for the donor rather than a rescue operation for your chief financial officer.

7. A special word for Christian charities
Avoid the “God gave us an unspeakable Gift and so should you” approach in your Christmas appeal letter. Instead, show in concrete terms how you will use a donor’s gift to further the work that your Christian donors care about, using a biblical theme if possible.