The median online revenue growth rate in 2012 is over 13 percent; in 2011 it was 15.8 percent, compared to 20 percent growth in 2010 over 2009. The gurus that work in the Internet and social media are almost giddy when they talk about it. I have heard some of the most ridiculous and unfounded conclusions in recent weeks. “Events in the real world are a waste of time”; “Telephone calls should never happen”; “No one reads hand written notes anymore”; “Fundraising mail is a complete waste of money”; “Direct mail is dead”…
The facts are that nothing could be further from the truth.
So many Internet gurus mistakenly lead people to believe that donations happen because people wake up in the morning and magically say, “I am going to send charity X a donation on my computer”. They convince their clients to curtail other forms of fundraising to rebuild their website every 24 to 36 months. The gurus of the web tell their clients “if you build it they will come.” Make no mistake about it, web sites are important and one day within this century, we will see all other forms of communication die. The tombstone for that day will not be in 2013, and will likely not be written for another decade or more.
What is really happening today? Donors are using the website as the “transaction form” for their giving.
If you do an event today, many participants will go on line to complete the pledge they made. Would the donation have happened without the event? Of course not… If you call a donor to talk about a project, most do not give on the telephone. After you hang up, they go on line to your website and make a gift? Would the donor have just magically gone to the website to donate without the call? Nope. If you send them a fundraising letter about 25 to 30 percent of all mail donors go on line today to process their donation today. Without the mailing, would those 3 out of 10 donors have given on line? Probably not.
Make no mistake about it. Web based donations do happen. Emails are used successfully to drive people to your website to donate. Nationally the response rate for house email files (people who have given to you before) is around 1%. One out of every 100 to 150 people will respond to your email appeal. If you are prospecting for new donor that number is a fraction of one percent. 1 out of 1,000 -1,500 will respond.
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. The word you should be talking about today is INTEGRATION.
Integration is the key to increasing the number of donations your charity receives. You must not get hung up on year over year giving from the individual communication channels. You have to track total revenue from all combined channels. There is just too much shifting back and forth between direct mail, white mail, telephone, internet and events. These silos work together in 2013. Donors go back in forth between silos based upon convenience and the time of year.
The way people give is changing. There is no doubt that the direct response fundraising 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 pre printed reply envelopes. However, direct mail is playing a far greater role in driving transactions to the charity’s website.
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.
So many “Internet 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 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 was 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 charity 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 response program. Mail, events and the internet must work together. It is that simple. They go hand and glove. You really can not have one without the other.
[NOTE: 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 fundraising is changing? You bet I do…. The reply device is what is changing in the industry.
Donors are going to use the medium for transferring 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. Pre Printed 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 want. More and more donors are transacting their gift on line. Remember, in 2013 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.”