Special Report: Multi-channel Fundraising

Nonprofit direct-response fundraising programs historically have centered around one channel, usually direct mail. But as other channels become more viable and new ones emerge — can you say W-E-B? — innovative organizations have become aggressive in incorporating them into their fundraising mix.

But it’s more than a simple matter of adding on. As fundraising has evolved, organizations have found that multiple channels must be integrated — and integrated well — to work. The messaging must be the same, or at least purposefully complementary, and the look consistent to create the deepest resonance and best possible response across all channels, thus boosting overall response.

Multi-channel integration isn’t rocket science, but it does require leadership buy-in, planning, testing, follow-through and measurement. And despite the headway the nonprofit sector is making into the multi-channel stratosphere, even the most advanced organizations are still laying road and smoothing out rough spots.

Here, weaved in with advice from professionals at some of the top fundraising consultancies in the country, are some anecdotes from the field.

Channel cohesion
In late 2003, the Chicago Metropolitan Division of The Salvation Army ran an awareness advertising campaign on television, radio and bus shelters, but there was no direct response, no way to gauge the effect or enlist new direct-response donors.

Lt. Col. David E. Grindle, divisional commander for the regional organization, decided he wanted a fundraising campaign with a singular message integrated across all the mediums the organization used — PSAs, billboards, bus stop signs and direct mail.

In 2004, the organization teamed with the Grizzard Agency to launch a multi-channel acquisition campaign for the holidays called “Please Don’t Forget,” built around the theme of remembering the poor. The idea was to expand the organization’s reach outside of its direct-mail audience. Grizzard created an integrated campaign featuring TV wraps, print ads, free-standing inserts and subway ads, which echoed the message and look of the direct-mail appeal sent to the organization’s 350,000 donors. Most ads featured both the organization’s Web site URL and a toll-free number people could call to donate.

“So what they were seeing if they were at a bus stop or in their TV Guide sitting there on the coffee table was the same message they were receiving when they received our direct-mail piece,” Grindle says.

The 2004 campaign was so successful it was repeated in 2005 when, due in part to the increased attention The Salvation Army had received that year in response to Hurricane Katrina, the campaign was even more successful — pulling a 12 percent increase in direct-mail income, a 55 percent increase in income from inbound mail and inbound phone, and an 18 percent increase in holiday net income from the 2004 campaign. And it acquired more than 21,000 new donors. The non-mailed elements of the campaign also netted more than 1,450 new donors.

In 2006, the campaign pulled in $10.3 million in overall holiday income — a new record for The Salvation Army’s Chicago Christmas campaign.

Grindle points to the consistent messaging as the key to the campaign’s success.

“With the integrated fundraising campaign it was saying, ‘OK, let’s choose a single message. We can’t hope to inform the public about all of the things that we are involved with in helping people. Let’s just take a single message and let’s focus on that message,’” he adds.

The broader, the better
Deciding whether to integrate multiple channels or employ just one for a fundraising campaign often depends on the target audience and the campaign’s focus. A campaign targeting a niche interest such as an appeal for a specific program area is not a broad enough message to justify employing several channels and going to a wide audience, according to Richard McPherson, president and creative director at McPherson Associates Inc. A too-narrow focus for such a sweeping strategy would result in what McPherson calls “wasted exposures.”

Such campaigns do better if they’re exclusively online, through direct- mail or via telephone, McPherson says, adding, “Basically the lesson is that the broader the appeal, the more effective [multi-channel] integration [can be].”

Christian Children’s Fund, an organization devoted to alleviating the plight of children living in poverty by providing practical assistance to impoverished communities, recently began testing the use of dedicated URLs in DRTV ads. It experienced the “wasted exposures” problem first-hand when it added online co-registration to a campaign it was running on television.

CCF put short ads with its logo on high-traffic Web sites with the objective of generating leads. Readers interested in learning more about the organization could request additional information about it, and then CCF would send them the same direct-mail fulfillment package it had sent to TV leads, which included a response device they could mail in with a donation.

Brian Gale, advertising manager for CCF, says that increasing lead volume in this way caused conversion on the direct-mail fulfillment package to decline. CCF put the campaign on hold and re-tooled it a bit, replacing the direct-mail fulfillment package with e-mail, but results declined
further.

Gale says opening the campaign up to a larger, perhaps less invested audience via a new channel was the main cause for failure.

“The problem with this method is that the leads have a lower interest in the offering than leads that respond to TV, SEM, SEO or banner ads. Thus our conversion rate was much lower than these other channels,” he says.

Giving convenience
From a donor-centric point of view, multi-channel integration offers convenience, allowing donors options for how to view and respond to an organization’s message. And the more choice and convenience an organization offers donors, the more chance it’ll have of generating multiple gifts.

“When organizations are in front of their donors in a greater variety of ways, people are reminded more often to give,” McPherson says. “Donors and prospects receive all this communication, and basically they just respond by the method that’s most convenient at the time.”

Organizations have found that integrating e-mail with a direct-mail campaign has the two-fold benefit of providing a lift in direct-mail response for next to no additional cost, and generating online revenue.

“When an organization graphs its results from a direct-mail-only campaign, they generally see a bell-shaped curve,” says Betsey Harman, principal at Harman Interactive. “When they add an e-mail reminder to the mix, they get a second spike in direct-mail results, so the graph looks more like a camel’s hump.”

E-mail also can appeal more to younger demographics. And online gifts tend, on average, to be larger than those that come through direct mail.

But Bryan Terpstra, vice president of client services at L.W. Robbins Associates, says multi-channel donors are the most valuable, as they have the most longevity. The turnover rate for online donors is much higher than that of direct-mail only or multi-channel donors.

“If you can get online donors to give through the mail, as well, it helps with a lot of longevity issues,” Terpstra says.

America’s Second Harvest, a hunger-relief organization, worked with Merkle/Domain and Convio to develop its “Thanksgiving Feast for 1 Million” integrated Thanksgiving campaign in 2006. It featured five elements, all with the central message of providing a million meals to hungry Americans.

Donors for which A2H had only street or e-mail address information for received communications through just that one channel, while donors for whom the organization had an e-mail and mailing address for received appeals via both channels.

A2H sent the first direct-mail appeal on Oct. 3, and then sent a follow-up mailing on Oct. 13. Next it sent three e-mails — the first on Nov. 16 to the organization’s entire e-list, the second on Nov. 21 to donors who hadn’t responded to the first e-campaign, and the third on Nov. 29, again to the whole e-list. In addition, major donors got a more high-end direct-mail appeal with the same theme.

The campaign as a whole raised $765,655 in gross revenue, with a response rate of 4.87 percent; the online campaign alone raised enough funds in two weeks to provide more than 1.3 million meals to the hungry.

McPherson says that organizations sending “companion” e-mails typically receive a modest response online, but the real results are in the direct mail. The e-mails serve as reminders or alerts to people who have received or will be receiving direct-mail appeals, giving the direct-mail response a boost and offering the option for online giving to those who prefer that channel. Organizations should test the timing of sending companion e-mails and direct mail.

“We haven’t come to a firm conclusion in terms of whether or not it’s better a little before or a little after,” says Jeff Regen, vice president of online marketing and communications for Defenders of Wildlife. “It’s a little bit difficult with direct mail because the delivery times are so erratic, so we usually try and hit it for somewhere in the middle.”

For one of its campaigns, the ASPCA sends an e-mail in advance of the direct-mail package’s arrival that gives recipients the option to renew online.

Steve Froehlich, director of analytics for the ASPCA, says recipients of the e-mail are more likely to respond through the mail or by telephone than those who don’t — even if they just read the e-mail and don’t respond online.

Outbound, permission-based telemarketing calls can function much the same way, as can sending a confirmation e-mail the morning after a telephone pledge.

“We’ve seen responses as high as 22 percent from people who have made a pledge of a gift in, let’s say, an alumni campaign,” McPherson says. “They’ll make a pledge one night and then the next morning they’ll receive a confirmation e-mail with a link to a pre-populated form. We see very high response from people who complete their pledge online even though they made the pledge by phone.”

Martin Smith, director of marketing and communications for Medical Assistance Programs International, an organization that provides essential medicines for poor countries and medical aid when disasters strike, says the goal of channel integration should be to establish ubiquity for an organization.

MAP’s fundraising has largely been centered around direct mail and major gifts for the past 15 to 20 years. This past year, L.W. Robbins Associates helped MAP revamp its e-communications strategy, and it now integrates outbound e-mail and home page content with its key direct-mail appeals.

“We recognize our supporters are in many different places, and fundamental to our success is that we have to meet them where they are and not necessarily where we want them to be,” Smith says.

Surmountable challenges
Running integrated campaigns requires having the means to reach people successfully through other channels. Leah Bloom, senior communications officer at St. Francis House, an organization that offers shelter and rehabilitation programs for the homeless, says the biggest challenge has been building an e-file.

St. Francis House recently began integrating e-mail into its direct-mail appeals. It sends a direct-mail appeal and later an e-mail with the same creative look and messaging set to arrive at roughly the same time as the direct-mail piece. A week after the first e-mail is sent, the organization re-sends the e-mail to recipients who didn’t open it the first time. After another week, it follows up to its entire list with another e-mail urging people to give or give again.

Bloom says she’s found the greatest success with capturing e-mail addresses through a face-to-face approach.

“We’re trying to take the channel integration one step further and at all of our events, at all of our in-person meetings, any time that we have face time with a potential supporter, we always ask if they want to join our e-mail list,” she says.

DoW’s Jeff Regen says data synchronization between eCRM databases and member or constituent databases is another challenge, as it’s complex, time consuming and expensive to implement. Vendors often are new to the process, too. And if you’re working with multiple vendors, as most organizations are, getting them to talk with each other and play nicely together can be painful.

Another problem: Often within an organization itself there can be territorial issues and competition between the staffs that handle the different channels.

To overcome that, Betsey Harman says organizations need to educate staff about the results that can be reached when channels are integrated. “They’ll see that if they use the channels together they’ll actually boost one another,” she says.

Madlen Satamian, vice president of the integrated media group with Grizzard, agrees, noting that other areas such as planned giving and major gifts also were positively impacted by The Salvation Army of Chicago’s integrated holiday campaign.

“The biggest benefit is how it’s impacting every single discipline within the organization. From acquisition to donor renewal to income to Internet and all the rest of the communication channels, planned giving, major gifts — all of those are benefitting from this kind of an integrated campaign,” Satamian says.

Getting everyone within the organization on the same page requires support from organization leaders and the establishment of key point people for each channel.

An early step in implementing an aggressive integration plan is to map out the infrastructure — who will develop content, who will arrange for the e-mails to go out, etc. — and make sure that your Web site and inbound phone system will support an influx of visitors and is user friendly and easy to navigate.

It can be a change in culture for some organizations to move away from working in silos and work more as a team. Organizations should instill in staff the notion that a win for one channel is a win for everyone.

“It’s really important that organizations themselves work together in an integrated way to make sure that the public sees them in an organized, consistent fashion,” says Joseph Ferraro, vice president of marketing and business development at Carl Bloom Associates.

“That is their brand. It’s important that the brand is not diluted by confusion,” he adds. “It’s their promise. It’s what they’re all about, and that has to shine through in every communication.”

Prove it
As with any campaign, fundraisers need to figure out the cost/benefit or ROI of integrated initiatives.

Numerous studies have found donors contacted via multiple channels are more valuable and give larger gifts than single-channel donors do. But analytics and match-back for integrated campaigns can be tricky because it can be hard to demonstrate how communication through one channel affected response via another.

“Online to online evaluation of an ROI is very easy, but when you get offline to online, there is just a huge void in creating a match-back attribution,” CCF’s Gale says.

Tracking allows fundraisers to understand the effect of using multiple channels and determine if additional channels are needed or if one can be subtracted to still get comparable results.

“We’re very granular in our measurement in television, and by that I mean we know the value of a phone call on a specific station in a specific city at all times. And what we don’t want to do is siphon away a certain amount of call volume, because we measure that call volume and telemarketing efficiency in terms of sales-generating leads — those leads that convert to become sponsors,” he says.

“What we don’t want to do is get a falsely deflated count of people that when given a choice between a telephone number or a URL, pick the URL,” he adds. “We don’t want to by mistake look at that station and go ‘Oh, it’s less efficient than it used to be.’ At the end of the day we’re all accountable to our donors that entrust this money to us, so we have to be super, super precise in our measurements.”

Using unique URLs and phone numbers is one way to ensure you can track and match back what avenue a donor came through. In addition, David Hazeltine, founder and CEO of Yellowfin Direct Marketing, recommends including a code in a dedicated URL that indicates what list the donor came from, e.g., whether they’re current or lapsed donors.

“Many organizations have an online giving form, but they’re not trackable, and the biggest problem some organizations have when they send out a mailing and all of a sudden all of these gifts come in to their Web site, [is that] there’s nothing absolutely, positively that says that person came there because of the mailing,” Hazeltine says.

The ASPCA has used unique inbound phone numbers and URLs in a DRTV campaign in which it runs 30-, 60- and 90- minute infomercials on channels such as Animal Planet and CNBC. It also has posted the video on YouTube and other online video-sharing sites, which enables ASPCA supporters to post the video on their own Web sites, MySpace pages or blogs. The unique phone numbers and URLs on these videos track back to the social-networking sites.

McPherson says organizations should move beyond traditional, initiative-based, cost-benefit evaluation and look instead at the dollar revenues divided by the dollar cost as a percentage to determine the percent return.

“What we are encouraging organizations to do is to take a look at segments or groups of donors and the total cost of communicating by all channels to them and the total giving by that same group, regardless of the channel,” McPherson says. “So if we make a phone call to you, send you three e-mails and send you a mailing, we know how much all of that costs and we can know how much you gave regardless of the channel that you chose to respond by.

“It’s more focusing on the behavior and the performance of donor segments than it is the performance of individuals through isolated initiatives,” he says.

Gale advises organizations new to channel integration start small, working from their strengths and gradually building up.

“You don’t want to abandon a winner that you already have. If you have a channel that is working well, my recommendation is build on that success. Add additional channels within an environment that you can have a control and a test environment,” he says.

Regen agrees. “One doesn’t need to have all of these tied up well in order to start. So there’s different levels of integration, and one can certainly do some multi-channel marketing and some integrated-campaign marketing without all of these challenges perfectly overcome,” he says.

“It’s an evolution,” he adds, noting that DoW has been including a URL on direct-mail forms for several years and sending companion e-mails with renewal mail pieces for a couple of years. And it’s just about at the one-year anniversary for integrating telemarketing with those elements. As far as he can see, the sky’s the limit.

“We’re just beginning to scratch the potential of things we already know we want to do, least wise scratching the potential of things we haven’t even thought of yet, so there’s an awful lot to do,” he adds.