Well it’s that time again? Another new year and with it another crop of “New Years gurus” spewing the end of the direct mail fundraising industry… we’ve heard it all before: “the internet has ended direct mail”; “social networks have replaced direct mail”; “postage price increases have killed direct mail”; “paper manufacturing costs have crushed the DM industry”. The list could go on and on.
What the pundits and gurus fail to understand is that it is not an “either or” scenario. It is not direct mail versus other marketing channels. It is direct mail AND the other channels.
Direct mail is changing. There is no doubt that the DM metrics are different today than even one year ago. Gone are the days when direct mail was the ONLY tool for identifying, cultivating and renewing donor giving. Today, direct mail continues to produce checks in the preprinted reply envelopes. However, direct mail is playing a far greater role in driving transactions to other giving channels.
If you track the daily giving to your charity’s website you are going to see that online giving mirrors the dates when your direct mail pieces arrive in-home. The spikes in giving online always follow, within hours, a mailing being placed into your donor’s mailbox.
Of course, the internet only marketers say “Abracadabra… see, we told you so. People have stopped giving by mail and are giving on line.” Not so fast, the fact is if you did not do the mailing the internet gift would not have magically appeared.
If you track major gifts that come in by a phone call or white mail (the donor’s own envelop, not the pre-printed reply envelop) you are going to see that the date of the call or the date on the postmark is usually within 72 hours of the in-home date of your last direct mail piece.
Most “experts” fail to look at giving the same way as the donors do. Development professionals have been trained to measure the results… as independent channels. The fact is that over the last decade this is not how fundraising happens. Most people who give online also give through the mail and people who give in the mail also give through other channels. There are multiple reasons for why donors give through multiple channels. It can be convenience at the point of contact. It can be the time of year. It can be dollar amount of the gift. There are a huge number of other reasons why people give through multiple channels.
So many “New Years Gurus” are churning out blatantly false information about what is occurring in digital fundraising. Fundraising “experts” are saying that all fundraising is shifting to the internet because it’s the new technology and they are absolutely wrong. When people give on line it is no more about the technology as saying when people give in the mail it is because of the paper.
I met recently with the president of a not-for-profit who shared that “we are going to stop using the mail entirely and move to digital communications exclusively.” After falling off my chair (for the dramatic effect, of course) I shared with him that he was about ready to “deep six” his organization. He had accepted another New Years guru’s pronouncement that “direct mail is dead” at its face value was preparing to tell his donors “use your computer or give your money to someone else.”
I encouraged our new convert to “internet only” giving to look at on line donations by day and guess what he discovered? Seventy percent of his on line donations came within 48 hours of his in home mail date.
I asked the web convert how much cash he generated from his acknowledgement letters last year. Of course, he had no idea. When we ran the report we saw that he generated nearly 50,000 thank you letters which included a postage paid BRE for return gifts. The business reply envelops brought in an additional $300,000 in cash. Guess what happens to that income without direct mail fundraising? Poof… it is gone. You just lost $300,000 from the thank you mail alone.
Next I asked the “internet only” convert to look at checks over $500 that were sent to the organization through “white mail” (in the donors own envelop)? We were both shocked when the report came back that over $1 million came into the charity in the donors own white envelop that had not been attributed do the direct mail program, but the major gift program. When we looked at the dates he received the white mail donations…. Over 85% came into the group within 72 hours of the in home date of the direct mail piece.
Where do major donors come from? Do they just magically appear? No, major donors come from the direct mail program. It is that simple. They go hand and glove. You really do not have one without the other.
Do not ask me why it is so but donors writing checks for $500, $1,000, $5,000 or more often DO NOT USE the pre-printed envelops that they are given with the direct mail piece. Anytime you increase the number of zeros on a check you dramatically increase the odds that they will use their own envelop.
Remember…. acknowledgement giving, major donor gifts, planned gifts and internet giving do not happen in a silo by themselves. You have to look at the totality of each fundraising program. These marketing channels must continue to be fueled by direct mail packages.
Do I believe that direct mail fundraising is changing? You bet I do…. But there will always be direct mail. The reply device is what is changing in the industry. Donors are going to use the medium for transfering their money to the charity that is the most convenient and trustworthy at the time of the transaction. In growing number of cases that will be the group’s website or their own envelop. Preprinted reply envelopes and BRE’s will be used less in 2011 than in 2010, but there is one thing that will stay the same. Direct mail will be the tool that drives people to give, regardless of the medium the donor decides to use to transport their donation.
Direct mail pre-printed reply devices may be decreasing in use, but the direct mail fundraising letter is at an exponential high. People are reading their mail and then using the giving channel they trust the most. Remember, in 2011 the key will be how you use direct mail AND the internet, not direct mail or the internet.
To quote my friend Mal Warwick, “The old reports and donor pathways are no longer sufficient—you must build a way to see, track, and analyze all the different ways your donors are experiencing and interacting with your organization in order to be able to build and refine a true multichannel fundraising and cultivation strategy.”
Blessings to you this Christmas season and my prayer for you is continued fundraising success for your organization in 2011.