Raiser Sharpe Tips » Strategy

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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Answer the Only Question Donors Have and You’ll Raise More Money Fundraising

Alan Sharpe — Fri, 11 Nov 2011 22:07:43 +0000

Your donors have only one question that bothers them.

If you want to acquire more donors, you have to answer it. If you want to raise more net revenue, you need to answer it. And if you want to increase the lifetime value of your donors, you must answer it.

Here’s their question: “How will my donation change the world?”

Donors are confused
Donors ask this question for a number of reasons. For one thing, they’re confused. If they live in Canada and want to support an organization that helps children with cancer, for example, should they donate to the Childhood Cancer Foundation, Canadian Cancer Society, Canadian Research Society, Cancer Recovery Foundation of Canada, Coast to Coast Against Cancer, Wellspring Cancer Support Foundation, Terry Fox Run, or someone else?

Many donors don’t know. Or can’t decide. So given that your non-profit organization has competitors who do similar work, you must tell prospective and current donors exactly how you will use their gift to transform lives. Otherwise your donors may donate somewhere else.

Donors have limited funds
There’s another reason you must tell your donors how their gift will make the world a better place. Some of them are on a fixed income. Others just retired. More than a few have student debt. Or other kinds of debt. Some are broke. Either way, they can’t support as many charities as they’d like, so they give their money to the few causes that promise to make the biggest difference with their gifts.

Donors fund specifics, not generalities
Given the choice between donating to “End Hunger in Your City” or giving a donation that buys “Thanksgiving dinner for $1.73″ for a man at the local homeless mission, you know what the donor will choose. And so does the donor. “How will my donation change the world?” is a question that demands a specific answer, not a general one. Supply the answer and your donor will supply the donation.

Don’t ask for a single donation until you can answer this question. That goes for every campaign, every appeal, every ask throughout the year. And make sure your answer is clear, concrete and compelling. Your donors demand it, no question about it.

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

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

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

How to Discover How Many Donors You Need to Reach Your Annual Revenue Goal

Alan Sharpe — Fri, 19 Aug 2011 15:34:28 +0000

Does your charity need to double or triple or quadruple its income over the next five or ten years? Are you trying to figure out how to do that? Follow these simple steps to discover how many donors you’ll likely need to reach your goal.

Let’s assume you need to raise $1 million annually.

Step 1: List your giving methods.
Open a new spreadsheet. In Column A, list the methods you’ll use to raise funds from donors. Your column will look something like this:

INDIVIDUALS
Direct Mail
Email
Major Gifts
Monthly Giving
Online

INSTITUTIONS
Corporations
Foundations
Government

Step 2: Assign a percentage of your total revenue goal to each fundraising method.
Most charities raise 80% of their annual income from individuals and the remaining 20% from institutions. In Column B, assign a percentage to each method to show the percentage of your annual revenue goal you’ll raise from each method. Your column will look like this:

INDIVIDUALS: PORTION OF ANNUAL REVENUE GOAL, %
Direct Mail: 30%
Email: 10%
Major Gifts: 20%
Monthly Giving: 10%
Online: 10%
SUB-TOTAL: 80%

INSTITUTIONS: PORTION OF ANNUAL REVENUE GOAL, %
Corporations: 5%
Foundations: 10%
Government: 5%
SUB-TOTAL: 20%
GRAND TOTAL: 100%

Step 3: Calculate how much revenue will come from each fundraising method.
In Column C, multiply your annual revenue goal (in this case, $1 million), by the percentage revenue goal for each method. Your results will look like this:

INDIVIDUALS: PORTION OF ANNUAL REVENUE GOAL, $
Direct Mail: $300,000
Email: $100,000
Major Gifts: $200,000
Monthly Giving: $100,000
Online: $100,000
SUB-TOTAL: $800,000

INSTITUTIONS: PORTION OF ANNUAL REVENUE GOAL, $
Corporations: $50,000
Foundations: $100,000
Government: $50,000
SUB-TOTAL: $200,000
GRAND TOTAL: $1,000,000

Step 4: Calculate your average annual revenue per donor, per fundraising method.
Based on your experience with donors from each fundraising method, calculate in Column D how much each donor will donate each year, on average. Your column will look like this:

INDIVIDUALS: AVERAGE ANNUAL REVENUE PER DONOR TYPE
Direct Mail Donor: $80
Email Donor: $80
Major Donor: $10,000
Monthly Donor: $360 ($30/mo.)
Online Donor: $150

INSTITUTIONS: AVERAGE ANNUAL REVENUE PER DONOR TYPE
Corporation: $10,000
Foundation: $20,000
Government: $50,000

Step 5: Calculate how many donors you’ll need per fundraising method to reach your annual revenue goal.
In Column E, divide your revenue goal per method (Step 3) by the average annual revenue per donor type (Step 4). Your column will look like this:

INDIVIDUALS: DONORS NEEDED TO REACH $1 MILLION ANNUAL GOAL
Direct Mail Donors: 3,750
Email Donors: 1,250
Major Donors: 20
Monthly Donors: 278
Online Donors: 667
SUB-TOTAL: 5,964

INSTITUTIONS: DONORS NEEDED TO REACH $1 MILLION ANNUAL GOAL
Corporations: 5
Foundations: 5
Government: 1
SUB-TOTAL: 11
GRAND TOTAL: 5,975

Thus, to reach this hypothetical annual fundraising goal of $1 million, you’ll need to acquire 5,975 donors. Your results will vary, of course, depending on the fundraising methods you use, the percentage of your annual revenue goal you aim to generate with each method, and your average annual revenue per donor type. But the same principles apply.

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.

Questions to Answer Before Requesting a Quote from a Direct Mail Fundraising Consultant

Alan Sharpe — Tue, 09 Aug 2011 14:47:25 +0000

If your charity wants to retain the services of a direct mail fundraising firm to conduct your next mailing, answer these questions before you pick up the phone. You’ll save yourself a lot of time, and give the firm everything they need to give you an accurate quote.

Your organization

What is the name of your charity?
What does your charity do?
Is your charity local, regional, national or international?
What is your address?
What is your phone number?
What is your website address?
What is the name and job title of your primary contact person for this mailing?
What is this person’s phone number and email address?
What is your annual budget from all sources (fundraising, government grants, product sales, membership fees, and so on)?
How much money do you raise each year through direct mail?

Your donor database

How many donors, of all kinds, current and lapsed, do you have in your donor database?
How many of those donors give a donation in a typical year?
In a typical year, how many donors stop giving?

Direct mail donor acquisition

Do you acquire donors through the mail?
If yes, how many acquisition mailings do you mail each year?
How many pieces do you mail for each acquisition mailing?
How many donors do you acquire per mailing, on average?
Do you use premiums in your acquisition mailings?
What is your average net cost to acquire a donor?

Donor renewal

How many times do you mail your donors each year, asking for a donation?
How many pieces do you mail each time?
What is an average response rate for a renewal mailing?
What is your average gift for a renewal mailing?
Do you have a donor newsletter that you mail?
If yes, how many times a year do you mail your donor newsletter?

Monthly giving

Do you have a monthly giving program?
If yes, how many monthly donors do you have?
How do you acquire your monthly donors?
What is the size of an average monthly gift?

If your mailing is to acquire new donors

What is your case for support for this mailing?
How many pieces do you want to mail?
Is your charity able to trade names with other charities?
If yes, how many names can you trade?
How many names do you want to rent?
Do you have any rental lists in mind (ones that have worked well in the past)?
What do you want to test with this mailing?
Do you have a control package?
What are you imagining this package will consist of (size of outer envelope? size of letterhead? length of letter in pages? reply device attached or detached? business reply envelope?)
Will there be a premium in this mailing?
Will there be an insert, such as a donor survey or a petition?
What is your budget for this mailing?
Which of the following are included in your budget?
Strategy
Writing
Design
List rental
Printing
Premium (front-end or back-end)
Lettershop
Postage
Taxes

If your mailing is to renew current and lapsed donors

What is your case for support for this mailing?
What are you imagining this package will consist of (size of outer envelope? size of letterhead? length of letter in pages? reply device attached or detached? business reply envelope?)
Do you want to segment your letter (new donors, current donors, lapsed donors, monthly donors, for example)?
If yes, what are the segments?
Will your letter or reply device suggest donation amounts based on the donor’s last gift, or some other criteria?
What do you want to test with this mailing?
What is your budget for this mailing?
Which of the following are included in your budget?
Strategy
Writing
Design
Printing
Premium (front-end or back-end)
Lettershop
Postage
Taxes

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

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

Direct Mail Donor Acquisition Tests: Five Ways to Evaluate Your Results

Alan Sharpe — Fri, 17 Jun 2011 13:18:16 +0000

If you drop a donor acquisition package in the mail as a test and it generates a response rate of 17%, can you say your campaign was a success? No.

If your donor acquisition test mailing generates an average gift of $125, can you say without fear of contradiction that your test was a success? No.

So how do you know if your direct mail donor acquisition test mailing was a feat or a failure? Answer enough of these questions in the affirmative to satisfy your boss, board, or banker.

1. Is your net cost per donor acquired acceptable?
Back in the day, which is to say, in the 1970s, charities mailed donor acquisition packages that generated a net profit. In other words, the revenue that the campaigns generated not only covered the costs of the campaign (writing, design, printing, list rentals, lettershop, postage), but also generated a profit. In those days, new donors more than covered the cost of their own acquisition.

Today, you should expect to lose money acquiring donors through the mail. How much you’re willing to “lose” is up to you and your board. After all, the “loss’ is really an investment. Your net cost per donor acquired is the investment you have to make to grow your donor database.

You calculate your net cost per donor acquired by subtracting your expenses from your revenue, and dividing the result by the number of donors acquired.

For example:
Number of pieces mailed: 50,000
Cost of the mailing: $50,000
Responses (donors): 500
Response rate: 1%
Revenue (total gifts): $34,000
Average gift: $68
Net Revenue: -$16,000
Net Cost Per Donor Acquired: $32

In this example, the charity suffers a net loss of $16,000. Some board members will look at that number and say the mailing was a failure and is never to be repeated. But look closer. The charity also acquired 500 donors. Many of whom will donate again. Each of those donors cost $32 to acquire. The charity will both break even and make a net profit with these new donors, assuming at least 48% of them give another gift of $68.

The safest way to pick an acceptable cost per donor acquired is to calculate the lifetime value of your average donor acquired by mail. If the amount of money you receive from your average direct-mail-acquired donor is many times greater than the cost of acquisition (four times greater, for example; the ratio is up to you), you can justify the cost of acquisition.

Another consideration is time until you reach break-even. How many months do you have to wait before your average direct-mail-acquired donor gives you enough money in donations to cover the cost of their acquisition? In other words, how many months from date of acquisition must you wait until your new donor starts giving you donations you can use for mission?

You can measure this in months and number of gifts. For example (using the figures from the above example), “Our typical donor acquired by direct mail must subsequently donate at least $32 to cover the cost of their acquisition so that we break even. Our new donors typically cover the cost of their acquisition and generate a net profit of $36 with their second donation, which they typically make within four months of date of acquisition.”

2. Is your average gift acceptable?
Some acquisition methods, such as premiums and trinkets, tend to generate a lower average gift than other methods. Are you happy with the average gift that your test generated? Just remember that your goal in donor acquisition is not to raise money. It’s to acquire donors. Money raised is secondary.

3. Is your response rate acceptable?
If you’ve conducted tests before, you know what your average response rate is. Did this test beat that average, or come under? If you have a goal for how many new donors you want to acquire this year, can you meet that goal with this response rate, and by mailing these lists again, or lists just like them? Remember that your goal is to acquire as many donors as possible (at an acceptable cost, of course). So the higher your response rate, the better.

4. Did enough of the lists you tested generate acceptable results?
In your test, you likely mailed at least 50,000 pieces to 10 or more lists. Some of those lists performed better than others, right? Measure your net cost per donor acquired, response rate and average gift for each list. Did enough of the lists generate the results you were after, so that you can confidently mail those lists again?

5. Did you beat your control?
In your test, you likely mailed two or more packages, each one with a different look, message and case for support. One of those packages was likely your control package (the one you’ve been mailing over and over because no other package can beat it). Did any of the packages beat your control? If one did, figure out why, repeat your test to be sure, and your test will have been a success.

Each of these metrics helps you discover, to a point, if your direct mail donor acquisition test was a success. No single metric tells you everything. You must exercise good judgment. But pay particular attention to your net cost per donor acquired. That’s the most useful metric. After all, your response rate, even if it’s in the double digits, doesn’t tell you if you made a net profit. And your average gift, even if it’s $200, doesn’t tell you if you made a net profit. But your net cost per donor acquired tells you two things: (1) if you made a net profit, and (2) how much you had to spend to acquire each donor.

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

Twenty Postal Strike Survival Tips for Charities and Non-Profits

Alan Sharpe — Fri, 03 Jun 2011 16:04:50 +0000

What should you do if your charity raises money through the mail but your country’s postal workers are about to strike, or are already on strike?

Naturally, you’re troubled.

Most charities in Canada that are not places of worship raise a substantial portion of their operating budget using fundraising letters. Many charities also rely on the mail to recruit new donors, keep their donors up to date with newsletters, invite donors to special events, conduct donor surveys, and issue charitable tax receipts and thank-you letters. So a strike by postal workers isn’t just an inconvenience. It threatens a charity’s very existence.

Here are some ways to survive a postal strike.

In the weeks before the postal workers go on strike, write to your donors. Tell them that a strike is imminent, and give the anticipated strike date if possible.
Describe how the strike will affect your donors’ ability to communicate with you, and your ability to communicate with your donors, by mail.
Warn your donors to expect delays in receiving their gift acknowledgement letters, since their mail gifts, and you thank-you letters, will likely be delayed in the mail system.
If the labour action involves rotating strikes in cities across the country rather than a nationwide general strike, warn your donors to still expect delays, since the location and duration of each strike is unpredictable.
Give your donors a way to keep current on the status of the strike by showing them where to sign up for email bulletins, text alerts and media releases issued by the postal labour union and the postal service. Direct donors to the websites of each party in the strike.
Encourage your donors to make their donations using other methods, such as email, phone, online, text and in person.
Before the strike begins, make contingency plans for sending your appeals by email, provided you have the technical ability and sufficient email addresses to do so profitably.
If you are going to solicit gifts during the strike by email, write to donors whose email addresses you do not have on file, and invite them to give you their email addresses. Give donors an incentive, such as a gift certificate, for doing so (you’ll acquire more addresses this way).
If you anticipate that the strike will be prolonged, consider phoning your high-value donors and asking for a gift. Mention the impact of the strike and encourage them to either phone your charity or give online. Do this throughout the duration of the strike.
If you anticipate that the strike will be prolonged, write to your donors before the strike and invite them to join your monthly giving program. If some are reluctant, invite them to give a gift each month, however small, for the duration of the strike only. Stress your need for daily funds to continue helping the people you serve.
Before the strike begins, invite your most frequent and generous donors to mail you a series of post-dated cheques.
Before the strike begins, invite your donors to add your charity as an Internet banking payee so that they can donate to your cause when they pay their bills online.
Ramp up your homepage so that it makes a clear, compelling request for donations (perhaps even mentioning your inability to receive donations in the mail, and stressing the need for visitors to donate online or by phone instead).
Revise your Twitter homepage so that it stresses your need for funds during the strike, and then solicit donations in some of your tweets.
Post a provocative, viral video on YouTube that shows the predicament your charity will be in if you stop receiving gifts during the postal strike. Make a strong request for funds, and direct viewers to your donation page, or even better, to a special landing page dedicated to the strike.
Post regular status updates to your Facebook page so that your fans, friends, donors, advocates, members and everyone else is reminded regularly of your need for funds.
While the strike is on, email your gift acknowledgement letters, charitable gift receipts, newsletters and special event invitations.
If your charity has to cancel a fundraising event because of the postal strike, host the event online instead as a creative, fun, tongue-in-cheek non-event. (“Our Black Tie Non-Event will NOT take place on (date). Cocktails will NOT be served at 5:30 p.m. Dinner will NOT be served at 7 p.m. NO program will be held at 8:30 p.m.)
When the strike is over, and you have a backlog of gift acknowledgement letters to mail, mention in each letter that you are sorry for the delay in thanking the donor.
When the strike is over, don’t be tempted to persuade as many donors as possible to start giving online instead of by mail. The majority of today’s donors prefer the mail. Gifts made by email and online still make up less than 10% of the revenue for most charities in North America.

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.

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)

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.

Look for Connection, Not Cash, in Prospective Direct Mail Donors

Alan Sharpe — Fri, 27 Jun 2008 13:25:09 +0000

I received an email the other day that reads as follows:

–letter starts–

Hello Mr. Raiser,
My name is _______. I work for a non profit organization, the ____________. We are in a season of taking the ministry international and also growing and empowering the ministries within. I would like to draft up a professional letter, that will go out to major corporations and empowered people, asking for donations, and for it in return be a tax write off! My goal is to mail/email a donation letter to different large companies and multi-millionaires example Oprah Winfrey, Donald Trump. I’m not sure at all as to how to even begin the letter. Please help!

–letter ends–

I cannot give any helpful advice on how to begin a letter like that because a letter like that shouldn’t be started.

The most important quality to look for in a potential direct mail donor is a connection with your cause. You shouldn’t be looking for millionaires, or billionaires.

Direct mail fundraising works by soliciting small gifts from lots of people regularly. Even retired folks can give you a small gift.

Look for connection, not capacity. Donald Trump has capacity. But does he have any connection with an obscure charity with a narrow case for support that wants him to make a donation because of the tax write off? Not likely.

Look for people who have connection, not just cash. A widower on a pension who has been touched by your ministry is a better candidate for a direct mail donation than a millionaire who has no clue what you do, or where you do it, or why. An individual who lives around the corner and believes in you is a better bet for a direct mail gift than an employee in a multinational corporation headquartered in another state who manages corporate donations but doesn’t know you from Eve.

Look for friends, not funds.

Find more help in 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 these…

Handbook Number 15
Increase Your Income and Boost Donor Loyalty with Donor-Centered Newsletter Stories.
Reap the long-term benefits of putting donors first in your donor newsletters.

Reduce Your Direct Mail Fundraising Costs by Mailing Less Often to Those Who Give Less

Alan Sharpe — Fri, 18 Jan 2008 14:43:54 +0000

The secret to reducing your direct mail fundraising costs is counterintuitive, like fertilizer.

Next time you’re out in the boonies, watch as a farmer spreads fertilizer over his field. As he passes over the parts of his field that always produce the smallest yield, he spreads little or no fertilizer. As he passes over those parts of his field that traditionally deliver the highest yield, he pours the fertilizer on thick.

If you’re a city-slicker like me, that doesn’t make any sense. Why doesn’t the farmer fertilize the part of his field that obviously needs the most help? Surely the poor soil needs the fertilizer more than the healthy soil, right?

Wrong.

Farmers know that they should invest their money in the parts of their acreage that always give them the highest return on their investment. Or, to put it the other way, farmers know that they should not spend any more money than necessary on the parts of their fields that habitually deliver poor results.

You should follow the farmer’s lead when you need to save money on your direct mail fundraising program. Invest your money on the people in your house file who promise to deliver the greatest return on your investment. Give them more fertilizer. Spend less money on the people who show little promise. Give them less fertilizer.

The most promising donors are those who give you the most money and who give the most often. The least promising donors are those who give little and give infrequently.

For example, the donor who gives you $250 in three donations each year should get more of your fertilizer than the donor who gives you only one donation of $20 each year. The high-dollar, frequent donor should receive more appeal letters than the low-dollar, infrequent donor.

The secret to reducing your mailing costs (and boosting your net revenue as a result) is to segment your house file. Segment your donors into three groups, high, medium and low. In the high group are those who give the largest gifts and who give the most often. In the low group are those who give you the smallest gifts and who give the least often. In the middle group are those who are in between.

Mail the donors in your high group at least six appeal letters each year. Mail the donors in the medium group at least three times a year. Mail the folks in the low group one fundraising letter a year (Christmas might be the best time).

Inexperienced fundraisers think they should mail their high-dollar, frequent donors less often (since these donors are already giving) and think they should mail their low-dollar, infrequent donors more often, to encourage them to give more and to give more often. No wonder these folks have trouble putting food on the table.

You’ll benefit from these…

Handbook Number 17
How to Convert Your Once-Only Direct Mail Donors into Repeat Givers.
Proven direct mail fundraising techniques for renewing your new members and first-time donors—year after year.

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.

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41 Things You Can Mail to Donors in Direct Mail Fundraising

Alan Sharpe — Fri, 11 Jan 2008 15:49:54 +0000

Want to learn a lesson in direct mail fundraising from Winston Churchill? He once observed that a fanatic is “someone who can’t change his mind and won’t change the subject.”

A fundraising letter fanatic, of course, is someone who thinks the only thing you can mail a donor is a fundraising letter. But that’s just one of more than 40 things you can mail to make friends and raise funds using paper and postage.

Acquisition package: Designed to attract new donors.

Welcome kit: An assortment of informational pieces and a cover letter, mailed to first-time donors, welcoming them to your organization and your cause.

Thank-you letter: The most important letter in direct mail fundraising, and it should never ask for a gift.

Renewal letter: Designed to persuade last year’s donors to renew their support again this year.

Member renewal letter: Mailed by member-based organizations to members whose membership is about to expire and must be renewed.

Reminder letter: Mailed a few weeks after your appeal letter, encouraging donors who have not responded to give. Popular at year-end.

Lapsed donor recovery letter: Mailed to donors who have not given a gift in 12 months or more, inviting them back on the train.

Monthly donor conversion letter: Mailed to annual donors (those who respond to your annual appeals), inviting them to join (convert to) your monthly giving program.

Special appeal: Mailed during the year to raise funds for a special cause, often an emergency, such as a natural disaster.

Year-end appeal: Letter that capitalizes on the year-end tax advantages and “spirit of the season” of Christmas.

Upgrade letter: Appeal inviting donors to increase the dollar amount (and sometimes frequency) of their gifts.

Donor club invitation: Letter inviting high-dollar donors to join a President’s Circle or other exclusive donor group.

Legacy gift prospecting letter: Mailed to a select group in your house file, asking if they are interested in making a planned gift (bequest, charitable remainder trust, and so on).

Special event invitation: A card or letter inviting donors and potential donors to a golf tournament, banquet, concert or other fundraising event.

Newsletter: Sent to current donors to inform them of how your organization is using their donations to change the world.

Annual report: Usually mailed to major donors, loyal donors and donors with influence.

Survey: Designed to solicit the opinions of donors and prospective donors.

Petition: Mailed by advocacy organizations (Amnesty International and Mother Against Drunk Driving, for example) to members, inviting them to complete and mail the petitions, usually to a decision-maker in federal government.

Member-get-a-member letter: Mailed by member-based organizations, inviting members to recruit new members to the organization.

Pledge appeal: Usually sent during capital campaigns, these appeals ask recipients to pledge a larger-than-normal gift (for the donor, that is) towards the campaign, a pledge that is usually honored by the donor by making a number of gifts over a period of a year or two.

Congratulatory card: Mailed to donors on the occasion of the donors’ wedding anniversary, birthday or other special event.

Testimonial: Written endorsements from clients or donors or others affected by the work of your organization, usually accompanying an appeal letter.

Plaque: Sent to faithful or particularly generous donors as a sign of your gratitude for their extraordinary support.

Gift catalog: Describes through pictures and text the items that donors can buy from your organization to support your work (a goat for a family in India, for example).

Resource catalog: Describes the books, DVDs and other educational materials that donors can order to educate themselves and others about your cause and the people you help.

Matching gift appeal: Invites donors to give gifts that, collectively, match a large gift made by another donor.

Newspaper clipping: Has your charity received favorable press recently? Mail a copy of the article to your donors (with the newspaper’s permission).

Quiz: Do you want to stir the imaginations of your donors, particularly if they are under the age of 12? Mail them a quiz that gets them thinking about a vital subject (climate change, poverty, nuclear war, homelessness, for example).

Factsheet: Sometimes you need to give your donors statistics and facts and figures, maybe even a history of your organization. Put these into a factsheet.

Special report: Dealing with a hot and timely topic that will galvanize your constituents.

Calendar: Special calendar that highlights special events of yours and days during the year that are of interest to you and your donors.

Special event teaser: Postcards or other short notices that pique the curiosity of your supporters about upcoming events.

Photographs: Mailed to donors to show the before-and-after results of their generosity.

Premium: Return address labels, notepads and other incentives designed to persuade the recipients to donate.

Freemium: Items enclosed with a direct mail appeal that have no intrinsic value, but help you communicate your appeal in a tangible, memorable way. A hospital, for example, might enclose a facsimile of a patient bracelet once worn by a young cancer survivor.

Involvement device: Scratch-off cards, checkboxes and other devices that involve the donor in meaningful ways and encourage a donation.

Brochure: Shows in pictures and words what you cannot discuss in the body of your letter.

Reprint: Has your CEO just given a speech to the United Nations? Transcribe the speech and mail it to your donors (assuming your CEO is a dynamic speaker, of course!).

Progress report: Mailed to donors, usually major donors, who have designated their gifts to a particular project, and who need to be kept informed about your progress with their money.

Follow-up note: Mailed after you’ve phoned your donor or made a personal visit, usually to thank the donor.

Income tax receipt: The more of these you have to mail each year, the better, right?

You might be interested in…

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

And don’t pass up…

Handbook Number 10
Six Insider Secrets of Running a Profitable Annual Fundraising Letter Program.
Proven techniques from the professionals for building long-term relationships with your donors and members.

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

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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.

See these other resources…

Handbook Number 9
31 Questions to Ask Yourself Before You Ask Anyone for a Donation with a Fundraising Letter.
Increase your chances of success by answering the vital questions that leading fundraisers ask themselves before writing a single word.

Handbook Number 10
Six Insider Secrets of Running a Profitable Annual Fundraising Letter Program.
Proven techniques from the professionals for building long-term relationships with your donors and members.

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.

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Direct Mail Fundraising Success Depends on a Strong Case for Support

Alan Sharpe — Fri, 28 Dec 2007 16:17:47 +0000

The secret to raising funds with direct mail appeal letters is not found in what you say or in how you say it but in why you say it.

Success is found not in technique but in truth. The truth of your case for support. That’s why, before you write a word of your fundraising letter you must state your case for why a donor should support you. I am not talking about a “case for need.” In donor-centered fundraising there is no such bird. Your needs are immaterial. What’s important to your donors is why they should support you. Their needs come first, not your’s.

Your case for support is simply the logical case that you make to your donor for supporting your organization with a donation today. The stronger your case, the stronger the response you can expect to receive to your direct mail appeal. An effective case statement meets three criteria. It must be compelling, credible and clear.

Be Compelling
The first goal of your case for financial support is to present a problem that demands a solution. Your donor must see your problem, your challenge, your goal, as one that is, in a word, compelling. The shortfall in your Annual Fund is compelling to your chief financial officer but not to your donors. A good case is not about dollars. It’s about the difference those dollars make in lives changed.

Be Credible
Your donor must believe that the problem that needs funding is solvable. And that your organization has the people and expertise to solve it. Donors must believe that the money they contribute is a necessary part of the solution. They must believe that their gift will be meaningful and worthwhile. Maybe that’s why The Flat Earth Society, which has been “Deprogramming the masses since 1547,” does not rely on direct mail to raise funds.

Be Clear
You must make a clear connection between the need you are addressing and how the donor’s gift will meet that need. Don’t spend all your ink on describing the problem. And don’t use your quota of exclamation points pleading for “support.” Donors need a reason to give. Money follows mission. And the clearer your link is between your mission and their money, the more likely your donors are to respond with a gift.

“There is simply no substitute for a nonprofit having a clear and compelling reason to exist, presented concisely and persuasively,” says Kent Dove in his book, Conducting a Successful Fundraising Program. So spend time and money and effort preparing your case for support. You can’t raise funds without it. Not for long, anyway.

You might be interested in…

Seminar-on-Demand 002
How to Publish the Perfect Donor Newsletter.
Presenter: Tom Ahern.
Discover the unsuspected flaws that kill most donor newsletters before they’re even mailed. Presented by the author of The Mercifully Brief, Real World Guide to Raising More Money With Newsletters Than You Ever Thought Possible.

Handbook Number 12
How to Write 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).

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