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Investing in Your Direct Marketing Program
Jessica Harrington, Vice President, S&W Direct
July 2007

Investing in your direct marketing program—in many cases your Annual Fund or Annual Giving program—is critical to building an organization’s base of annual support. A strategic well executed direct marketing program has the ability to:

• Build a constituency of supporters who are committed to your organization, both financially and emotionally;
• Strengthen your organization’s brand;
• Educate and increase public awareness of your organization;
• Encourage involvement in your organization;
• Create a prospect pool of major and planned gifts; and,
• Become the most predictable method of fundraising and the most stable source of continued annual giving.

The objective of direct response fundraising is to establish a donor base, and then to build upon it. Like a pyramid that rises to a peak, the program allows you to continuously upgrade donor giving by communicating the events, virtues and mission of your organization to these highly targeted individuals over time and influencing them to increase their support and commitment to your organization.

Building the donor base through targeted frequent campaigns allows an organization to convert prospects to philanthropic supporters who have both the capacity and desire to give. And, with most organizations, these efforts are an investment in the future. With a solid donor development program in place, it becomes profitable for an organization to spend money on its recruiting efforts.

In today’s competitive environment, it is critical that the annual giving program should be viewed as a priority. In 2005, individuals gave $199 billion to their favorite causes (76.5% of the overall $260 billion donated to nonprofit organizations). It’s estimated that by 2050 $41 trillion will transfer from one generation to the next—with $6 trillion going to charities. Reaching as many potential donors now is more important to your organization’s future than ever.

In addition, competition for donors’ attention and dollars continues to increase. The American Fundraising Professionals Association (AFP) reported that there are over 1 million registered charities in the United States—nearly double the number that existed in 1995. With this increased competition, your organization must take top billing as a donor’s priority.

Direct marketing is the most cost-effective way to do this. The research-marketing firm Vertis released a study showing that contributors are most likely to donate to an organization from which they receive direct mail (59%), compared with 41% through word of mouth and 40% through a church affiliation. In addition, 53% of adults surveyed confirmed that they read fundraising and nonprofit direct mail.

And, while the mail is still the best and most efficient way to build the base, combining new tools like an e-solicitation and e-marketing program with more traditional mail and telemarketing campaigns provides additional annual giving opportunities for your donors.

Creating A Successful Direct Marketing Program

Creating an aggressive and effective direct marketing program, however, is challenging. Before picking an envelope size, designing a fancy brochure or adding flash animation to an e-mail, there are some key requirements to consider when planning and designing your program.

• Level of Perceived Need. You must have a compelling case for support with an understandable need for the gift. This is bigger than your mission—it is why you need the gift and what you are going to do with the gift.

• Clear ask for support. The request for support must be specific and straightforward. In today’s donor-driven marketplace, you must be transparent in what you will do with the gift.

• An Organized Pool to Solicit. You can have award-winning copy and design, but if the solicitation is sent to the wrong person, the package will not work. Mailing to a well-cultivated, targeted audience is critical to being successful.

• Effective, Repeated Outreach (Solicitation and Cultivation). While you may be aware of every communication that you send, donors and prospects are not paying as close attention as we would like. You need to mail often enough to create awareness and give people several opportunities to give throughout the year.

• Various and Diverse Giving Opportunities. Mailing frequently not only gives people more opportunities to give one gift, it gives donors more opportunities to make frequent gifts. By varying the package, the offer and the design, you can encourage frequent and/or upgraded giving.

• Flawless Stewardship of Donors. The most important communication we send is the thank you letter. And, today, follow-up on what the gift did is just as important.

• Proper Recognition/Approach of Donor Groups. Today’s technology allows for an extraordinary amount of personalization. Using this technology appropriately, however, can be difficult. Personalize to the donor’s philanthropic inclinations, previous giving history and future giving potential. Don’t use the latest techniques or advances just because you can—make sure it makes sense based on your message, the donor’s involvement with your organization and your budget.

• Continuous Analysis of the Program. Direct marketing allows us to measure our success. Understanding the donor segments that gave to each campaign and at what level they contributed is critical to future planning.

• A Good Package. Don’t be fooled by elaborate and extravagant mail packages. Test after test proves that traditional direct mail (an outer envelope, letter, reply slip and reply envelope) works better than self-mailers and fancy marketing pieces. To make sure your package works, get personal, conversational and design the letter so recipients can scan its content. Longer letters work better than shorter letters, but they need to be written in a direct mail style.

Even in today’s sophisticated marketplace, a solid case for support written in a compelling and personal way to the right donor or prospect works better than the flashy package or even the newest technology.

Most important, to build the best direct marketing program possible for your organization, test these ideas (and all of the newest formats, packages and technologies) and use them to supplement your current efforts. As test results become apparent, continue tweaking your overall efforts to maximize your marketing and revenue potential.

Schultz & Williams is a national consulting firm based in Philadelphia; providing management, fundraising and marketing consulting for nonprofit organizations, along with full-service direct marketing, database and creative/production services.