Direct Mail Still Rules the Day in Fundraising

Earlier this week, Blackbaud released its 2011 donorCentrics Internet and Multichannel Giving Benchmarking Report, and the biggest finding of all is that direct-mail giving still overwhelmingly brings in the majority of fundraising revenue.

That does not mean, however, that fundraisers should only use direct mail to solicit donations and communicate with their donors. Multichannel integration is vital in this day and age, with donors spending more and more time and money online. But as the results show, focusing on e-philanthropy alone is a mistake, seeing as direct mail still rules the day.

The 2011 Target Analytics report covers 15.6 million donors and more than $1.16 billion. Here are some key findings from the report:

• For large direct-marketing organizations that participated, the majority of gifts still come in via direct mail.
• Even though direct mail remains the dominant channel for donor acquisition, it is increasingly common for new donors to give initially online.
• Online-acquired donors are significantly younger and tend to have higher household incomes than mail-acquired donors.
• Online-acquired donors tend to give larger gifts than mail-acquired donors.
• Online-acquired donors tend to have lower retention rates than mail-acquired donors.
• Online-acquired donors have much higher long-term cumulative value than traditional mail-acquired donors. However, larger gift amounts given by online-acquired donors can mask issues with retention. Long-term value varies depending on the donor's origin gift level.
• Multichannel giving is not ubiquitous. The majority of multichannel donors are acquired online and then subsequently start giving direct-mail gifts. This is the only situation where there are significant numbers of cross-channel donors across all organizations.
• Large proportions of online-acquired donors switch from online giving to offline giving — primarily direct mail. However, very few mail-acquired donors switch to online giving.
• Of the online-acquired donors who move to offline gifts, they tend to do so in their first renewal year — and continue to give offline. Just under half of all online-acquired donors convert entirely to offline, primarily direct-mail giving.
• Robust direct-mail programs drive up retention and long-term value of online-acquired donors. Other than monthly giving programs, direct-mail programs are the best method for gaining repeat gifts from online-acquired donors.
• When online-acquired donors move offline in subsequent years of giving, it does have some negative effect on their value in the renewal year. The higher the donor’s original gift level, the less she upgrades and, in fact, the more likely it is that the donor will actually downgrade if she moves offline. However, these lower gift amounts are far outweighed by the higher retention of online-acquired donors provided by the direct-mail channel.
• The presence of past multichannel giving is generally not a significant factor in predicting future retention or long-term donor value. Traditional RFM factors are far better indicators.

To download the full report, click here.