Focus On: Lists: Digging For Donors

Anyone who works in direct mail donor development can tell you that it’s a challenge to find ways to bring in new donors while operating under an ever-tightening budget. With so many organizations mailing to the same lists of donors, fewer new lists being brought to the market and expenses always on the rise, creativity and willingness to take calculated risks will help you reach your new donor goals.

In a perfect world, mailings would breeze through the post office and land in potential donors’ mailboxes without competition from other charities. Then, prospects gleefully would open the letters, feel a connection and send in donations using their own stamps.

These new donors would give repeatedly and generously for years — always, of course, using their own stamps. Eventually, after decades of loyal support, an envelope would arrive from some attorney’s office. A notice would be enclosed that Loyal Donor bequeathed his or her estate to your organization.

Until scientists figure out how to create and clone Loyal Donor, your best action is creative action. How do you do that? Maybe some of the things that other nonprofit professionals are doing to bring in new donors and control expenses will give you some ideas.

Reach out to the Hispanic market.
Today, more than one in eight people in the United States are of Hispanic origin. The U.S. Department of Commerce projects that by 2050, one out of every four people will be Hispanic.

To add nearer-term perspective, by 2010, Hispanics will become the second largest race/ethnic group —second only to non-Hispanic whites. The time to start thinking about marketing to this growing audience is now.

Large commercial mailers such as Bookspan, Reader’s Digest and Rodale Press recognize the fact that the Hispanic population is growing but grossly underserved. They create offers that speak the language and appeal to the likes and interests of Hispanics in America. Between the three companies, they’ve pulled in hundreds of thousands of Spanish-speaking customers.

Several notable nonprofits also are reaching out to the Spanish-speaking marketplace. Covenant House, Cystic Fibrosis Foundation, Oblate Missions and Salesian Missions are among them. One of the major advantages they have in marketing to Hispanics is that competition in the mailbox is almost nonexistent. Until others catch up, the handful of organizations that are marketing to Hispanics have a captive audience. Undoubtedly, that’s going to pay off.

Build a prospecting database using lapsed donors.
If you have a list of lapsed donors that you’re not mailing to and it’s archived somewhere, serving no purpose, getting older and less deliverable every day, you can do what Tufts University did.

The development office there created a revenue-generating enhanced file using current names and 10 years worth of inactive names. By combining the processing of the active names (being enhanced for rental purposes) with the processing of the inactive names (to be used for reactivation efforts), Tufts was able to negotiate with a major service bureau for no-cost address correction, National Change of Address and deceased screenings.

It was no surprise when nearly half of the inactive names were eliminated in the address-hygiene and deceased-screening processes. Statistically, more than 75 percent of the lapses should have moved at least once or passed away. The names that remained after the processing provided Tufts with a profitable new mailing universe.

Don’t cut a good list out of your mail plan just because you can’t get it on exchange.
Almost every fundraiser who exchanges has dealt, or will deal, with situations in which they’re denied names on exchange. It’s part of the territory. Perhaps an exchange cap is in place, and you’ve reached it. Or, maybe your list no longer works for the other list owner. Whatever the reason, you will be faced with having to rent.

That’s no problem if the rental expense doesn’t drive your cost per donor through the roof.

But what if it does and renting simply isn’t an option? Or if the list owner only wants to rent? Do you not order the list? Cancel your order?

If you really want the names on exchange, don’t throw in the towel just yet. Consider negotiating a cooperative exchange.

Cooperative exchanges have rescued lists that otherwise would have been dropped from mailings for several mailers including Consumers Union, National Arbor Day Foundation and March of Dimes. When properly orchestrated, they are a triple-win proposition.

All you need to make a cooperative exchange work for you is a willing third party that either owes you names or wants names from you and whose list your exchange partner wants to use. The cooperative exchange transaction would look something like this:

Each cooperative exchange is treated as a one-time deal. After all three parties receive their names, the transaction is complete. Parties can choose to enter into additional cooperative deals in the future, but they are under no obligation to do so.

Look for profitable new universes in familiar places.
Every now and again, a large nonprofit puts names on the market for the first time. Recent releases such as the Mercy Home for Boys and Girls’ active donor names and the Consumers Union lists generated a lot of excitement.

Large new lists don’t hit the market as frequently as we’d like. Sometimes, they come and go faster than we can blink. Many fundraisers’ bubbles burst, for example, when St. Jude Children’s Research Hospital changed its plan to put its list on the market. Plenty of people were waiting to test that list.

But even when new lists are not hitting the market, there are still plenty of places where you can find profitable universes. Some of them are closer than you might think.

Take a look at the lists that work well for you. What kind of recency are you using? If six-month names are profitable, have you tested seven- to 12-month, $5-plus names? If 12-month, $5-plus names are profitable, have you tested 13- to 18-month, $10-plus names? Mailing to older names with stepped-up donation amounts is a strategy that works.

Do you wish you could do something to make your mediocre lists perform better? Maybe that would enable you to use more names? If you’re raising funds for a health, social, welfare or animal cause, have you tried the female market? Women generally perform better than men for these kinds of causes.

Expand your horizons.
Don’t be shortsighted. Your best donors might not be who you think they are. Analyze trends and list performance over the long haul.

In acquisition mailings, donor lists tend to be the best performers. However, donors that were sourced from non-donor lists might be the real winners when you measure lifetime value. Track new-donor response down to the list level for at least two years.

Results from acquisition mailings tell only part of the story. For example, donors sourced from automobile club, retirement newsletter and public television lists come in with very solid long-term numbers.

In today’s mail environment, it’s important to be innovative and try to think of as many ideas as possible. Each tiny incremental success cumulatively makes for a large success. Keep the channels of communication flowing in all directions. Learn from what others are doing, and let them learn from you.

Martin A.Stein is president and CEO of RMI Direct Marketing Inc., a list brokerage and management firm that specializes in direct mail donor development. You can e-mail him at mstein@rmidirect.com.