What Does Your Board (or YOU) Need to Know
About Fundraising?
An H&J White Paper

Direct mail can be a challenge, even under the best of circumstances. But despite its difficulties, industry research consistently indicates that, when it comes to funding your mission, direct mail is still the foundation of the most successful donor-contribution efforts.

Yet, all too often, CEOs, CFOs, and Boards of Directors don’t really “get" direct mail.

It’s not really that surprising. Even those of us who work with direct mail regularly don’t always understand the subtle intricacies of how and why it works. No wonder it can seem arcane and confusing to those outside our esoteric world!

So to help make your case to the skeptics, here are a few tips on how to explain the importance of your program, in language you don’t have to be a “mail-nerd” to understand:

1. HOW IT WORKS

The “giving pyramid” may be a staple among fundraisers, but it’s less familiar to others. The purpose of direct mail is to bring in long-term donors and cultivate them up the pyramid so that they become major givers.

Planned Giving officers often report that the majority of Planned Giving gifts come from donors who began as direct mail donors in the $25 range.

2. THE MEDIUM OF THE PAST, THE PRESENT AND THE FUTURE

Even in this e-mail age, direct mail remains the foundation of fundraising. The surprising industry study reflected in the chart below shows that “Generation Y” the youngest generation of donors – those who are theoretically the most computer savvy – are actually the fastest growing group of direct mail readers.

Direct mail is even the preferred choice of e-mail donors! A study by McPherson Associates showed that, of people who first contributed on-line, 70% renewed. BUT, of that 70%, 80% of that group renewed by mail!

And, according to an InfoTrends study, nearly 70% of people prefer direct mail to e-mail or phone-based marketing. (1)

(1) “InfoTrends Launches Major Study on Direct Mail, Transaction and ‘Transpromotional’ Documents.” Tekrati.com, May 25, 2006.

3. THE HIGH COST OF DOING NOTHING

One thing you can be sure of: If you don’t ask for anything, you won’t get anything!

The chart below shows what happened when a national human services organization decided to “save money” by eliminating its acquisition program:

(2006 Annual New York Nonprofit Conference)

This organization was seeing a sharp decline in direct mail revenues. Yet just as the numbers were emerging from a slump the decision was made to cut acquisition.

The purple line shows that, yes costs did plummet. However, as the green line proves, three full years after the acquisition cut, revenues still had not climbed to even their lowest previous level. This organization learned the same painful lesson so many others have: The only thing more expensive than prospecting is NOT prospecting!

4. SO, WHAT CAN YOU EXPECT?

This chart shows a typical acquisition projection for a chapter-based nonprofit organization:

If only half of the new donors make a second gift of $25 within the fiscal year, you have more than recouped your initial investment!

5. THE BOTTOM LINE

The above information just scratches the surface of the intricate world of direct mail fundraising.

But we hope this will give you some nuts and bolts information to help illustrate the high value of a direct mail program for an established organization.

At the end of the day, it is an old cliché, but in this case it’s really true: Direct mail doesn’t cost – it pays!