Raiser Sharpe Tips » Results

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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Win Board Approval for Your Fundraising Budget by Calculating Your Long-Term Donor Value

Alan Sharpe — Fri, 28 Oct 2011 15:14:39 +0000

The ten dumbest words ever spoken in the English language are: “We don’t have money in our fundraising budget for that.”

The people who say this most often are board members. Uninformed board members. Timid board members. Board members who don’t understand that charitable organizations live or die by their donors, and that you and I must spend money to acquire, steward, upgrade and retain our donors.

The surest way to win board approval for your donor acquisition and stewardship budget is to know your long-term donor value.

Long-term donor value defined
Long-term donor value is simply the gross amount of income you expect to receive from a typical donor during a given timeframe. When you know how much a typical donor is worth to your organization long-term, then you know how much you should be willing to invest to acquire, steward and upgrade that donor.

For example, if you know that your typical donor will donate roughly $1,998 to your charity during the first five years following that donor’s first gift, you should be willing to spend a fair amount of money to acquire and cultivate that donor.

The key to winning board approval is knowing how quickly a typical donor will break even, and how much that donor will give you over time.

How to calculate your long-term donor value

1. Decide on the time period you want to measure following the donor’s first gift. The period could be ten years, five years, three years–any period you want to measure. For the purposes of this illustration, I’m using a period of five years.

2. Choose an acquisition channel. Long-term donor value varies greatly depending on how donors are acquired. So don’t mix up your results. Pick just one channel of acquisition. In this example, we want to know the long-term value of donors acquired through direct mail.

3. Run a query on your donor database to find all the donors who gave their first gift to your organization five years ago in response to a direct mail donor acquisition mailing.

4. Run a report on these donors to find every gift they have ever given to your charity, through every channel (direct mail, phone, monthly, special event, online, bequest and so on).

5. Include the following fields in your report for each gift:

* Donor ID
* Date of gift
* Size of gift

6. Export the results of the report

7. Create a spreadsheet

8. Down the left side of the first column (Column A), create the following rows:

1. Donors Acquired
2. Cumulative Gifts
3. Cumulative Revenue
4. Cumulative Average Gifts Per Donor
5. Average Annual Gift
6. Long-Term Donor Value

9. In the columns to the right, create one column for each year. Our spreadsheet will look like this: Column B is Year 1, Column C is Year 2, Column D is Year 3, Column E is Year 4, Column F is Year 5

10. Populate Column B with the results for Year 1, the year of acquisition. It will look like this:
1. Donors Acquired, 6,856
2. Cumulative Gifts, 10,912
3. Cumulative Revenue, $3,002,975
4. Cumulative Average Gifts Per Donor, 1.6
5. Average Annual Gift, $275
6. Long-Term Donor Value, $438

To see a sample of this spreadsheet, click here.

11. Let’s look at Column B.
Row 1 is the number of donors you acquired in Year 1: 6,856

Row 2 is the total number of gifts these donors gave you in Year 1. Gifts given is larger than donors acquired because some donors gave more than once in Year 1.

Row 3 is the total dollar value of all the donations these donors gave in Year 1, through all channels.

Row 4 is a formula field that divides the Cumulative Gifts (Row 2) by the number of Donors who gave this year (Row 1).

Row 5 is a formula field that divides total revenue received that year (Row 3) by the number of donors (Row 1).

Row 6 is a formula field that multiplies Average Annual Gift (Row 5) by Cumulative Average Gifts Per Donor (Row 4).

To see a sample of this spreadsheet, click here.

13. For the remaining four years, you populate the columns in the same way and end up with a spreadsheet that looks like this (each column is separated by a comma):

Year 1, Year 2, Year 3, Year 4, Year 5
Donors Acquired in Year 1, 6,856
Cumulative Gifts, $10,912, $19,227, $26,553, $33,286, $38,376
Cumulative Average Gifts Per Donor, 1.6, 2.8, 3.9, 4.9, 5.6
Cumulative Revenue, $3,002,975, $4,877,466, $7,051,333, $10,781,172, $13,695,731
Average Annual Gift, $275, $254, $266, $324, $357
Long-Term Donor Value, $438, $712, $1,029, $1,573, $1,998

As you can see, the long-term value of a donor acquired by direct mail is $438 in Year 1 and $1,998 in Year 5. Your results may differ.

To see a sample of this spreadsheet, click here.

Remember this for the long-term
The longer the period of time you choose to calculate long-term donor value, the more important it is that you include every gift ever given by every channel. A new donor acquired by direct mail will likely give you only direct mail gifts for the first few years. But a donor acquired by direct mail who stays with your charity for 20 years may eventually give monthly gifts, contribute to your capital campaign, give at a special event, participate in your walk-a-thon, give online, respond to an email appeal, join your Legacy League, and leave you a sizeable bequest when she passes away.

The key to understanding your long-term donor value is always knowing which donor acquisition channel you are referring to and which gifts you are referring to. In the above example, the long-term donor value calculation is based on all donors acquired by direct mail five years ago and includes all the gifts they ever gave during those five years. Naturally, if this calculation included only their direct mail gifts in that time period, the results would be different.

Now approach your board of directors well-armed
As you can see, when you know what your average long-term donor value is, in other words, when you know how much money a typical donor gives to your charity in a given timeframe, you can approach your board with hard, persuasive evidence for investing in donor acquisition, donor stewardship, monthly donor conversion, bequest marketing, gift upgrading, mid-level-donor stewardship and much more.

To see a sample of this spreadsheet, click here.

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

Penelope Burk Versus Donor Behaviour: Direct Mail Fundraising is Not in Decline

Alan Sharpe — Fri, 21 Oct 2011 16:56:32 +0000

Fundraising consultant and researcher Penelope Burk of Cygnus Applied Research says direct mail is declining in popularity. She is wrong.

In her firm’s latest report, The Cygnus Donor Survey: Where Philanthropy is Headed in 2011, Burk says there is “a continuing decline in donors’ desire to transact their gifts through the mail; 26% of those who gave through the mail last year said they plan to give less this way in 2011 (less often, less money or both).

The problem with Burk’s survey is that it reports on what donors say they will do, not on what they actually do. Burk partnered with 40 not-for-profit organizations for her research. But she didn’t ask them if their direct mail programs are growing or shrinking. Instead, she surveyed 22,000 donors from these organizations, and asked these donors what they think of direct mail.

And there’s the problem.

Donors will tell you they receive too much mail. But respond anyway. Donors will tell you they hate receiving fundraising telephone calls during supper. But give over the phone anyway. Donors will tell you they prefer to hear from you by email. But then won’t read your email appeals.

What donors say they will do and what they actually do are often two different things.

I had a neighbor like that. Maurice said he’d never attend an estate sale organized by the local auctioneer because the auctioneer was “as crooked as a snake.” But wouldn’t you know, at the estate sale of a widow neighbor of ours, who was up at the front of the auction, bidding on all the items he wanted? Maurice.

If you want to discover where philanthropy is heading, don’t ask donors what they desire to do next year. Ask charities what they are doing next year.

That’s what the Association of Fundraising Professionals did in the Fall of 2011 with an online poll of its members. Their Quick Poll mirrors what my firm sees happening in the sector, namely, that the majority of charities (61% of poll respondents) are neither abandoning nor decreasing their use of direct mail. A whopping 35% of poll respondents are increasing their use of direct mail.

Direct mail still rules the day in fundraising. Direct-mail giving still brings in the majority of fundraising revenue. The vast majority of charities raise less than 10% of their annual income online.

If you want to discover if direct mail is declining, look at your numbers. They are never mistaken. But donors sometimes are. And so are the researchers who report on those donors’ desires and supposed preferences.

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.

When to Ignore Your Direct Mail Fundraising Test Results

Alan Sharpe — Fri, 26 Aug 2011 14:56:17 +0000

Direct mail fundraising is a soccer game where the opposing team keeps moving the goal posts.

A premium that worked last year doesn’t work today. A package design that worked at your last charity doesn’t work at your new one. A proven way to acquiring new donors gradually fails.

How can a tested, proven tactic stop working?

When you test one thing against another in the mail and Thing A outperforms Thing B, you know what works, right? The key to knowing what works in direct mail fundraising is testing, right?

Well, sort of.

There are at least three times when you should ignore your test results.

When Charities are in Different Sectors
I know of two charities. One is a national animal welfare group that relies heavily on premiums (greeting cards, address labels, note pads) to acquire and retain donors. The other charity is a national human rights organization where one in four of its donors hate premiums, never respond to them, and ask the charity to never mail them.

As you can see, a tested tactic that works for one charity will not necessarily work for another. When you move from one charity to another, ignore your test results from your former charity, or at least re-test them to make sure they are valid at your new charity.

When the Test Results are Dated
What worked in the mail once may not work again. When was the last time you received a CD in the mail from America Online (AOL) promoting their dial-up Internet service? There was a time when half of all CDs produced worldwide had an AOL logo on them. In the late 1990s, AOL was signing up new subscribers at the rate of one every six seconds.

No more.

Outer envelopes are another good example. Every charity used to mail plain #10 envelopes. Then one charity put teaser copy on its envelopes and saw a lift in response.

Other charities heard about it, copied the tactic, and soon every charity that put teaser copy on its outer envelopes saw a lift in response. Years later, when everyone was using teasers, a charity mailed a plain #10 envelope and saw a lift in response. Plain envelopes were suddenly different.

Be prepared to ignore your test results if they are from tests conducted a while ago. Technology changes. Donors change. Test results change.

When Your Sample Size is Too Small
To get test results that you can trust you need to receive at least 50 responses. To get 50 responses at a 1% response rate, you must mail at least 5,000 pieces. If you are mailing two packages and measuring the difference in results between the two of them (response rate, average gift, cost to raise a dollar, for example), then you must mail at least 5,000 of each package for a total mailing quantity of 10,000. If your test sample is smaller than 5,000 pieces of mail, don’t trust your results.

Another time you should not trust direct mail fundraising test results is when they are someone else’s results. Mine, for example. If you want to be confident that what I’m saying is valid, test my advice for yourself. I always tell the truth, but what is true for me may not be true for you. There are no absolute truths in direct mail fundraising, except this one: There are no absolute truths in direct mail fundraising.

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

Don’t Measure Fundraising Costs, But Cost-Effectiveness.

Alan Sharpe — Fri, 29 Jul 2011 11:50:39 +0000

The only number in fundraising that matters is net revenue.

Net revenue is the money you have left over after you subtract your fundraising expenses from your fundraising income. Net revenue is the only money you can do mission with. The more net revenue you have, the more good you can do in the world.

You would think that board members would encourage their charities to raise as much net revenue as possible. But plenty of them don’t. They instead obsess over fundraising costs, and pressure their fundraising staff to cut fundraising costs wherever possible.

This is foolish and short-sighted. It’s the equivalent of cutting your office energy costs in half by not heating in winter and not air conditioning in summer. And losing all your employees.

It’s the equivalent of travelling to a famine-stricken area of Africa with life-saving supplies, but choosing the cheapest method of travel, row boat, instead of a Boeing 777, arriving three months late, and everyone having died while you were in the middle of the Atlantic Ocean saving money.

People who obsess over fundraising costs instead of net revenue are looking at the wrong end of the horse. You discover the health of a horse by examining its eyes, ears, nose and gums. The other end doesn’t tell you much.

Arbitrarily cutting your fundraising costs is foolish if it reduces your net revenue, wouldn’t you agree?

Increasing your fundraising costs is wise if it increases your net revenue, wouldn’t you agree?

Remember that there are only three ways to increase your net revenue:

1. Reduce your costs
2. Get donors to increase the size or frequency of their gifts
3. Get more donors

To persuade donors to increase the size or frequency of their gifts, you have to increase your fundraising costs (by mailing them more often, for example). To get more donors, you have to increase your costs.

Naturally, if you can reduce your costs without reducing your net revenue, you should. For example, if a fundraising letter printed in black raises just as much money as a letter printed in colour, but costs less to print, you should print in black. But if printing in colour brings in more net revenue, despite it costing more, you should print in colour.

If your board demands that you cut costs, insist that you cut costs for the right reason. And there’s only one right reason. Cut your fundraising costs not because cutting costs is always good (it ain’t). Only cut if doing so boosts your net revenue, because boosting net revenue is always good.

If cutting your fundraising costs boosts your net revenue, cut. If increasing your fundraising costs boosts your net revenue, increase. Keep your eye on the right end of the horse and you’ll raise more money, and do more good with it to change the world.

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

Need help?
If you need help crafting effective direct mail letters, 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

Four Fundraising Benchmarks You Must Monitor (or Else)

Alan Sharpe — Fri, 27 May 2011 15:02:27 +0000

Know how to boil a frog?

You don’t just drop him into a pot of boiling water. He’ll jump out.

Instead, you place him in a pot of cool water, then warm the pot gradually to a boil. The frog grows accustomed to the rising temperature, until it’s too late. He boils.

Know how to go bankrupt as a charity?

Not by making one sudden radical change. That can be reversed.

No, to go bankrupt as a charity, all you have to do is continue doing what you’re doing right now, without watching for changes in your environment. Pay no attention to trends in your data, ignore industry benchmarks, and you’ll eventually reach boiling point and expire.

On the other hand, if you want to boost your net revenue each year, and continue to attract new donors, members and supporters to your cause, you must watch two things: watch for trends in your results, and watch for trends in the industry. Here are the main things you should be watching to make sure you’re not the frog in the pot.

1. Gross Donated Revenue by Channel
You raise funds using multiple channels. You need to know which channels raise the most revenue. And which ones raise the least. You can only discover this by measuring your gross donated income by channel each year, and comparing your current year results with previous years.

Look for trends. Which channels are growing? Which ones are declining? Then compare your results with other charities in general, and with other charities in your sector in particular.

Make sure you measure every channel. Some channels are growing in popularity (mobile, for example), while others are waning (fundraising banquets, for example).

Here are the major channels: bequests, direct mail, direct-response television, email, face-to-face (street & door-to-door canvassing), grant proposals, major gifts solicited in person, mobile, phone, social media, special events, website.

2. Average Gift by Channel
Some fundraising methods (channels) generate larger gifts than others. Which channel generates the largest average gift for your cause? Which channel brings in the lowest? Measure your average gift for each fundraising method you use and you’ll know. Track this number over time to discover which channels are growing more effective, and therefore need more of your resources.

3. Total Donors Acquired, by Channel
Which of your donor acquisition methods brings in the most donors, and which the least? Measure and find out. Look for trends over the past 10 years. Tweak your program accordingly. Then find out how you compare with other charities.

4. Attrition Rate by Channel
Some donor acquisition methods are notorious for high attrition rates. Direct mail donors acquired through lotteries, for example, tend to fall away (never donate again) at much higher rates than donors acquired through other methods. Which of your donor acquisition channels has the highest attrition rate? And which the lowest? You have options, you know. You can always drop a channel that has an unsustainably high attrition rate.

The key to growth is to watch for trends in your fundraising results, and to compare your organization with others in your sector to see how well you’re doing. That way you can be hot. Just not boiling hot.

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.

Should a Donation Thank-You Letter Ever Ask for a Donation?

Alan Sharpe — Mon, 17 Jan 2011 12:24:58 +0000

I got a big surprise the day I closed my direct mail fundraising consultancy and started working for a national charity. I discovered that my new employer used its gift acknowledgement letters as a way to raise funds. With every donation thank-you letter it mailed to donors, it included a reply device and business reply envelope.

At first, I was incensed. Then, I was embarased. You see, for the longest time, I have advocated in my workshops, books, handbooks, newsletter and blog that a charity should never use a thank-you letter as a chance to ask for another gift. Doing so was tacky and alienated many donors, I said.

I held this position largely because of a fundraising consultant and researcher called Penelope Burke. In her book, Donor-Centered Fundraising, which I recommend, Penny Burke presented the findings of her surveys of donors and their attitudes towards giving. Forty percent of respondents to Burke’s surveys said that asking for a donation in a thank-you letter is rude. A further 20% said they would stop giving if a charity treated them that way.

But during my first day on the job in the real world of fundraising, I learned that my employer raised over $150,000 a year with its thank-you letters. Thousands of donors responded to the reply device in their thank-you letters by returning it with a cheque in the enclosed business reply envelope.

I figure you can see the predicament I was in. Should I stand on my principles or let the donors decide what was rude and what wasn’t? I did the latter. I allowed the charity to continue using their thank-you letters as a way to raise funds.

Donors are a strange bunch. Gather a number of them into a small room for a focus group and they will tell you not to solicit them, however subtly, in a gift-acknowledgement letter. Ever. But do that very thing in their mailbox and they will respond. What donors say they will do and what donors actually do are often two separate things.

So should you ask for another gift when thanking donors for their last one? I recommend you test and find out. Surveys only prove what donors think they will do, or what they think they should do. Testing proves what they actually do. Sometimes the difference between the one and the other is more that $150,000 in net annual income.

Those are my thoughts. What are yours?

Learn More
Read 51 Ways to Write Original Donation Thank-You Letters, Boost Your Revenues and Donor Loyalty
with Effective Donation Thank-You Letters and other resources on donation fundraising letters.

FAQs About Trading Mailing Lists with Other Charities in Donor Acquisition

Alan Sharpe — Fri, 07 Jan 2011 13:02:13 +0000

Q1. What is list trading?
A. List trading, or swapping, is the practice of exchanging mailing lists with another charity. They mail a fundraising letter to your list and you mail a fundraising letter to their list.

Q2. When do charities tend to trade lists?
A. List trading is used exclusively for donor acquisition. Charity A mails Charity B’s donors with a view to acquiring as many of those donors as possible, and vice versa.

Q3. Who “owns” the acquired donors?
A. Charities who swap lists do so with the clear understanding that any donors who respond to an acquisition mailing become donors of that charity as well.

Q4. How much does it cost?
A. List trading is free. No money changes hands.

Q5. How does the list trade take place?
A. Charities use a third party, such as a lettershop or list broker, to exchange the lists. That way, each charity can mail the other’s list only once. These third parties also de-dupe the lists so that you do not mail any donors on the other charity’s list that already support your cause.

Q6. How many names can I trade with another charity?
A. List trades are reciprocal. So however many names you want from the other charity, they will want an equal number of names from you.

Q7. Which names do I trade?
A. You will work with the other charity to decide the criteria to use when pulling your lists. The names you each select will invariably be donors who have made a gift within the past 12 months. You can further narrow your lists based on any other criteria that helps both charities.

Q8. Who do I ask to trade lists with my charity?
A. Pick charities whose donors are similar to yours but whose causes are different. Donors are unlikely to support two charities that do identical work.

Q9. What are the benefits of swapping mailing lists?
A. There are any benefits:

1. You save money on list rental fees
2. Your net income from a traded list can be twice that of a rented list
3. You stand to acquire twice as many donors as a rented list
4. Your cost of acquisition (cost per donor) is around half that of renting lists
5. The percentage of acquired donors who go on to make a second gift is higher than for donors acquired from a rented list
6. Your response rates will be higher

Q10. If I let another charity mail my donors, won’t they stop giving to me, or give less?
A Not likely. Your donors already support multiple charities and receive lots of mail from them. One more piece of mail won’t make a difference. Even if the other charity’s mailing is highly successful, 90% of your donors won’t respond. Plus, few donors give all that they can. Chances are that if they like the other charity’s mission, they will support both of you, not one or the other. And remember this vital thing: list trading is reciprocal. While the other charity is mailing your donors, you are also mailing theirs.

Q11. When should I not swap my list?
A. You should not trade your list if your privacy policy forbids the practice.

Predict Your Direct Mail Fundraising Campaign Success with Doubling Day

Alan Sharpe — Fri, 10 Dec 2010 12:00:39 +0000

How can you predict the success of your direct mail fundraising campaign before it has concluded? You know the challenge. If your charity is at all typical, you receive donations from your fundraising appeals for months, even years, after they have mailed. I worked for a non-profit organization that received thousands of dollars each November from its end-of-year mailing OF THE YEAR BEFORE.

Why donors hang onto business reply envelopes for 12 months or longer is beyond me. But they do. Does this mean you can never know the success of your direct mail campaigns until you have received every last response and every last dollar? No, because you can use doubling day instead.

Doubling day is that point in a direct-mail appeal life cycle when you can anticipate that half the responses have been received. Doubling day can measure the total number of responses received, or the total amount of money received (although these two days are likely to be different).

For example, if you mail 5,000 pieces and receive 25 replies by doubling day, multiply by two. You can expect a total of fifty inquiries, for a one percent response rate. Depending on the class of mail you use for your mailing envelope and reply envelope, doubling day will occur at different intervals, expressed as the number of days since the promotion was mailed. Your doubling day, obviously, can only be known when you have mailed at least a couple of direct mail campaigns to the same audience at the same time of year.

According to the folks who know such things, most non-profit mailers receive half of their responses on the eighteenth day after dropping their campaign into the mail, when mailing bulk rate. Your results may vary.

Knowing your doubling day helps you optimize revenue. Most non-profit organizations that rely on the mail for the bulk of their donated income drop each fundraising appeal in the mail just as the previous one has reached its peak and is declining. That way, they have a package in the mail every day of the year. Knowing your doubling day helps you time your appeals so that you mail as many as possible during the year without annoying your donors or cannibalizing your response.

Doubling Day is the traditional tool that non-profits use to predict the success of their direct mail fundraising campaigns while they are in the mail, but it’s useful only if it’s consistent. A number of things can throw off your doubling day.

Delays in mail delivery
In Canada and the United States, doubling day is turning into doubling month. Every mail class has been going up at least three days in delivery, so that each class is harder to rely on.

Class of mail
Naturally, if you use first-class postage on your mailing envelope and your business reply envelope you will reach doubling day sooner than if you use bulk class and no postage on your BRE.

Unusually large gifts in previous campaigns
If you use doubling day to measure the amount of money raised rather than the number of responses received, one or more unusually large single gifts in previous campaigns will skew your doubling day, making it appear to arrive sooner than it does. Remove those large gifts from your calculation to arrive at an accurate doubling day.

Contents of the direct mail package
If your mailing contains a newsletter or brochure or something else that donors will likely hang on to, this may draw out your doubling day. Some donors respond to these types of mailings months after they have dropped.

Time of year
The same is true for Christmas appeals. Donors who receive them in November often hang onto the package until the end of December before responding. So, at Christmas, expect your doubling day to be the same day it was for the previous year’s Christmas appeal, not the previous month’s appeal.

Learn more

Handbook Number 16
Direct Mail Fundraising Arithmetic Demystified.
Master 14 common formulas that help you measure-and improve-your DM fundraising results.

Why Hospital Lotteries and Sweepstakes are Bad for Your Health

Alan Sharpe — Fri, 24 Sep 2010 10:46:08 +0000

Hospital lotteries and sweepstakes raise millions of dollars for good causes but they do more harm than good. Here’s why.

1. Hospital lotteries are unethical
Hospitals and healthcare charities are in the business of treating and preventing illness. Gambling is addictive. Gambling hurts gamblers and their families. Gambling addiction is a mental disorder that requires medical intervention in most cases to overcome. For hospitals to raise funds using a method that hurts the person giving the money is unethical.

2. Hospital lotteries harm a hospital’s reputation
Why does the Canadian Cancer Society require that its employees be non-smokers? Because smoking causes cancer. A charity that fights cancer cannot afford to also condone an activity that causes cancer. Their reputation would suffer. When the public perceives your organization as a major promoter of gambling, an activity that harms society, the shine comes off your reputation. Close ties to any activity that causes harm to people tarnishes your brand.

3. Hospital lotteries confuse donors
Buying a lottery ticket is not a philanthropic act. Gambling is not an act of charity, regardless of who is organizing the sweepstakes. Lottery ticket buyers do not receive a charitable tax receipt. According to the Canadian Medical Association, “The fuzzy line between gambling and giving gets even fuzzier when ticket buyers are treated like donors. In March 2008, for example, the Princess Margaret Hospital hosted a series of lectures on cancer research for 700 lottery participants, something once done only for large private donors.”

4. Hospital lotteries are risky
Lottery prizes are purchased, not received as gifts, which makes for a high break-even mark. Some charities have failed to reach it. Australian hospital operator Southern Health lost $590,000 on its lottery in 2006 when it sold only 60% of tickets.

5. Hospitals become addicted to gambling
Some hospital lotteries are so successful that the hospitals that run them can’t quit. The Princess Margaret Hospital in Toronto, Canada, has raised over $170 million with its lottery over the past 13 years. According to the Canadian Medical Association, lotteries account for 30% of all private hospital funding, and, without them, hospitals would suffer. Hospitals are addicted to gambling revenues.

To read a fuller treatment of this topic, read “Hospital lotteries not always the best bet,” by Roger Collier in the Canadian Medical Association Journal. This article draws heavily from that article.

Boost Fundraising Letter Response Rates by Making Responding Convenient

Alan Sharpe — Fri, 23 Jul 2010 10:39:34 +0000

I had a client who wanted to drive prospective customers to his online store using a postcard. Great idea, I thought, and cost effective.

He had a terrific product, a compelling offer, and a sound business model. He had just one problem. He wanted to make all website visitors register before they could browse his product catalog. Big mistake.

So I, along with his business partner, managed to talk him out of the idea. And he was glad that we did.

That’s because one of the fundamental requirements of direct mail is that you make it easy for your prospects, customers and donors to respond. The word to remember is “convenience.” You must make responding as convenient as possible. Here are some ways to do that with your donors.

REPLY DEVICE

Print your donor’s name and address on it so the donor doesn’t have to.
If your donors must complete part of the card, give them enough space (most direct mail donors are over 60 and can’t read or write without glasses).

REPLY ENVELOPE

Pay for return postage so your donors don’t have to hunt for a stamp.
Print your return address on the return envelope.

TEAR-OUT COUPONS

Place coupons at the outside corners of the page (not in the gutter or the middle of the page), where they are easy to tear out.
Perforate the edges of tear-out coupons with a fine perf, not a coarse one, so they are easy to tear out.

PAYMENT

Offer as many payment options as possible without paralyzing your reader.
Accept all the major credit cards.
Accept cheques.
Accept recurring monthly donations.
Accept donations by telephone (toll-free, of course).
Accept donations by mail.
Accept donations on your website.

One of the beautiful things about donating by mail is the convenience. But that is only true if the direct mail donating experience is convenient. Use some of these methods to improve your convenience quotient and your donors will thank you for it—with their gifts.

Learn more

Handbook Number 12
How to Write
and Design Effective Direct Mail Fundraising Reply Devices.
Attract the gifts you need by making the donation process quick and painless for your donors (and you).

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).

How to Help Your Lettershop Bungle Your Fundraising Campaign

Alan Sharpe — Fri, 14 Aug 2009 14:32:46 +0000

I know from reliable sources that the Mr. Murphy who coined Murphy’s Law (“If something can go wrong, it will”) worked as an account manager at a lettershop. After leaving his position of direct mail fundraising manager at a national charity. After all, in what other line of work, other than, say, launching a space shuttle, could you meddle with so many small details to sabotage your mailing? Murphy knew every way to mess up a direct mail appeal, but he had his favourites. Here they are.

1. Give the lettershop irrelevant data
Why supply only the donor number, campaign keycode, name, address, city, province and postal code (or state and zip) when you can instead add all sorts of extraneous data and personal information to each record? Why not tell the lettershop the shoe size of each donor? And the name of their pet? You’ll compromise donor confidentiality, increase the chances for mistakes, boost your volume of nixies and undeliverable mail, and compel your lettershop to order Prozac by the case.

2. Supply your date file with no field headings
The first record in your data file should look just like a donor record except it contains the name of each field instead of the data. But that’s so last Millenium. So add some colour to your lettershop’s vocabulary by submitting your data file with no field names. Let the folks in data figure out for themselves if the number in the field that looks like this <<$100.00>> is the donor’s last gift or the ask amount or the price of a Grande Latte No Whip at the Starbucks in Trafalgar Square.

3. Give your data file fields and your mail merge fields different names
If you have a field in your data file called <> and you want that field to appear in your letter as variable data, call it <> or <> or something more exotic.

4. Give your data file a no-name name
Just before you upload your data file to your lettershop, pretend that they were sincere when they said, “We treat you like you are our only customer.” Name your data file “mailing_list.csv.” Or just “list.csv.” They will know it is from you.

I know these methods work brilliantly at confusing lettershops because I have employed the first three to good effect. Only once each, mind you. There must be other ways to bungle a mailing. Let me know your favourites.

You might be interested in…

Breakthrough Fundraising Letters.
How to write direct mail donation request appeals that attract more donors, raise more money, and build stronger relationships. Available in paperback and as an e-book.

Mail Superiority
Learn the proven, step-by-step process for raising funds and friends cost effectively, year after year.

Handbook Number 16
Direct Mail Fundraising Arithmetic Demystified.
Master 14 common formulas that help you measure—and improve—your DM fundraising results.

Handbook Number 27
Raise More Money and Retain More Donors by Reducing Your Returned Mail.

Raise More Money and Retain More Donors by Reducing Your Returned Mail.

Tips, tactics and industry best practices for reducing your volume of “undeliverable” and “bad addresses”.

Don’t Watch Fundraising Costs, But Cost-Effectiveness

Alan Sharpe — Fri, 19 Jun 2009 11:11:57 +0000

I received an email from a fundraiser who is about to lose her job. Her board of directors has decided they cannot afford her salary. They see her salary as just a line item in the budget, one found under the heading of Costs rather than Income. They blame their decision on the recession. I blame the board. And I sympathize with my fellow fundraiser.

The metric to watch in fundraising is not cost. It’s cost-effectiveness. We fundraisers have to spend money to make money. How much we spend, and when we spend it, and how we spend it, should be determined not by some arbitrary number on our budget but by the return we anticipate from spending that money.

Five of the silliest words ever spoken in the English language are, “That’s not in our budget.”

What many members of volunteer boards fail to grasp is that increased spending must precede increased income. If you want your bequest income to increase, you must first increase your spending on promotion (think brochures, letters, advertisements, seminars). If you want your major gift income to increase, you must first increase your spending on identification and cultivation (think database research, travel, solicitation materials).

So the question your board should be asking is not, “Can we afford to spend this much?” but rather, “What is the anticipated return if we spend this much?”

I’ve seen this first hand. I worked for a brief while at a non-profit that eventually laid me off because they ran short of money. I was their chief development officer, the one they hired to boost their income, but, when money got tight, they laid off the very person who could have raised more money for them, if they had only been willing to spend money first.

To persuade your board or your executive director to spend money in a tight economy, you need evidence. If you have proof from past campaigns that you can spend 23 cents and raise a dollar, show that proof. If you can demonstrate from a test mailing to a rented list that you can acquire new donors at a cost of only $11 each, and that they will pay for themselves within seven months and have a lifetime value of $892 and six years, show that proof as well.

Warren Buffet and Bill Gates don’t like to spend money any more than your board does. But they like to spend money if the anticipated return on their investment is attractive. That’s why they spend billions of dollars a year on acquisitions that show up on the Costs line of their budgets. Invite your board to look at the Income line of those same budgets. You’ll justify your salary.

You’ll benefit from these:

Handbook Number 26
Raise Funds in a Recession.
Twenty-seven development professionals describe how to raise funds, cut costs and retain donors in an economic downturn.

Handbook Number 5
Boost Your Revenues and Donor Loyalty with Effective Donation Thank-You Letters.
Master the single most important letter in direct mail fundraising.

Direct Mail Fundraising ROI Calculator. Automatically calculate the 10 most vital formulas for measuring the return on investment (ROI) of your direct mail, with this special calculator.

Improve Your Direct Mail Fundraising Letters: Donate to Your Competitors

Alan Sharpe — Fri, 08 May 2009 10:55:03 +0000

One of the quickest ways to learn the craft of direct mail fundraising is to donate money to your strongest competitors. Pick the Top 10 organizations you admire and mail them a donation of at least $20. Then watch your mailbox. What you’ll get is a correspondence course in raising money with paper and postage.

First of all, the organizations will mail you a thank-you letter. How quickly do they mail it after receiving your gift? Make a note. Is the letter hand-signed or generated by a machine? Is it a postcard instead of a letter? Compare all 10 gift acknowledgement letters, decide what the best ones have in common, and do likewise.

Sooner or later, probably sooner, the charities will mail you an appeal letter. Do they address you by name or as “Dear Friend”? Do they acknowledge that you are a brand new supporter? Do they thank you for your last donation?

Is their package creative, compelling and, as far as you can tell, cost-effective? Do they offer you a premium? The best organizations in your Top 10 will use the same industry best practices. Now you can, too, provided you borrow a tactic and don’t lift any phrases or images.

Pay attention to how your competitors present their case for support, how often in their letters they ask for a gift, how they describe the need, and how often they use testimonials and stories from the people they help.

Count the number of enclosures in each package. Watch for common practices that are obviously working (business reply envelopes, for example). And watch for unusual inserts. World Vision recently mailed donors a blanket.

Count the number and type of appeals you receive in one year. Which competitor mails the most often? Which one the least? Which one is more successful? Why?

Count the number of pages in a typical letter. Count the number of colours.

If you want to see how charities try to recover lapsed direct mail donors, mail one donation only and keep watching your mailbox for a few years. If you need ideas for creative ways to renew members, join a few member-based charities and let your membership lapse.

The keys to improving your direct mail fundraising program are borrowing and brilliance. Borrow the best practices that all the leading organizations have in common. But create your own original, brilliant look, message, themes and inserts. Above all , make every word and image your own.

You may be interested in these:

Handbook Number 4
Anatomy of a Profitable Fundraising Letter.
Discover 62 tricks, secrets and tactics used by successful fundraising pros.

Over 130 Sample Fundraising Letters.

International, national and local charities share examples of their direct mail fundraising expertise.

Direct Mail Fundraising Tests: Follow these Eight Rules for Success

Alan Sharpe — Fri, 04 Jul 2008 13:25:38 +0000

The best way to improve your direct mail fundraising program is through testing. Don’t follow fads, board whims, or a gut feeling that turns out to be indigestion.

Instead, test. And, to save money and time (and further indigestion), follow these eight rules.

Rule #1: Test things that are significant
Don’t test a blue signature versus a red signature. It’s too expensive of a test. Don’t test Times Roman versus Arial. Test things that are significant. In other words, test a six-page letter versus a two-page letter. Test a full-color package versus a black and white package. These would be significant tests.

Rule #2: Test things you can control
You can control your printing, you can control the length of the letter, you can control the photography, and so on. Don’t test things that you have no control over-for example, mailing during a recession. You could have no control over that in the future.

Rule #3: Make your test large enough to be significant
Mail at least 5,000 pieces to get 50 responses at a one percent response rate. Fifty responses is considered the minimum number you must generate to achieve a trustworthy test.

Rule #4: Test one thing at a time
If you mail a package and it does really, really well and you think, “Oh, we can improve this package,” don’t do a test where you mail a similar package but you change the headline and you change the teaser copy on the envelope and you change the reply device and you change the postscript, because if the second package outperforms the first package, you won’t know what was responsible for the improvement. Was it the teaser copy on the envelope? Was it the headline? Was it the reply device? Was it the postscript? You won’t know. Test one thing at a time to be sure.

Rule #5: Don’t let large gifts skew your results
When you examine your campaign results, you see gifts of $25, $35 and $45, which is typical. But then you see a gift of $15,000 in response to the same campaign. That number will skew your results if you let it. Your spreadsheet for this campaign may tell you that the average gift was $92, but that’s because of this unusually large gift. If you take this one gift of $15,000 out of your calculation, your average gift will likely be closer to $36.

So be careful about large gifts. Remove them when you’re doing calculations to measure what your net income will be. Expect your average gift and your cost to raise a dollar to be skewed by large gifts.

Rule #6: Test acquisition mailings for people, not profit
Concentrate on acquiring loyal donors in the greatest numbers at the lowest cost. Enough said.

Rule #7: If you are starting out in direct mail, aim to acquire as many donors as possible
If you’re just starting in direct mail and you’re obviously starting with donor acquisition, aim to acquire as many donors as possible, not to make as much money as possible. Success in the mail comes after the first gift.

Rule #8: Test every time you mail
If you’re mailing to a large number of people, always test something. Test two asks, test the ask string on your reply device, test the teaser copy, test the length of the letter, test the signatory, test something of significance every time you mail. You’ll learn a lot, and you’ll improve your packages and your approach over time.

These tips are taken from my new, 270-page book:

Mail Superiority.
Learn the proven, step-by-step process for raising funds and friends cost effectively, year after year.

You might also like…

Handbook Number 16
Direct Mail Fundraising Arithmetic Demystified.
Master 14 common formulas that help you measure—and improve—your DM fundraising results.