What Does Your Board Need to Know About Direct Mail?

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 still is 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 you 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” — shown in Chart 1 — is 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 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. So you literally can’t afford to underestimate the importance of acquiring and cultivating low- to mid-range donors!

2. The medium of the past, present and future
Even in this e-mail age, direct mail remains the foundation of a strong fundraising program. The surprising industry study reflected in Chart 2 shows Generation Y, the youngest generation of donors — those who theoretically are the most computer-savvy — actually is 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 online, 70 percent renewed. But of that 70 percent who renewed, 80 percent renewed by mail.

And, according to an InfoTrends Research Group study, nearly 70 percent of people prefer direct mail to e-mail or phone-based marketing.

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!

Chart 3 displays what happened when a national human-services organization decided to “save money” by eliminating its acquisition program:

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. (Source: 2006 Annual New York Nonprofit Conference)

This organization learned the same painful lesson so many others have: The only thing more expensive than prospecting is not prospecting.

4. What you can expect
Chart 4 shows a typical acquisition projection for a large Red Cross chapter:

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

The bottom line
The above information just scratches the surface of the intricate world of direct-mail fundraising. But I 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!

Willis Turner is a senior copywriter at Huntsinger & Jeffer Inc. in Richmond, Va.