[Editor's note: This is part 1 of a four-part series.]
It's no secret that smaller organizations have smaller fundraising budgets and fewer resources at their disposals than the larger organizations. But that doesn't mean they should use that as an excuse in their fundraising.
There are many strategies smaller nonprofits can employ to get results that mirror or even top those of the big players in the sector. In their session, "20 Big Direct Marketing Ideas for Small Nonprofits," at the 2012 Washington Nonprofit Conference, Eliza Temeles, senior account executive at MKDM; Jill Batcheller, membership manager at the Lincoln Center for the Performing Arts; and Alicia Toles, annual giving and donor data manager at Food and Friends, shared 20 direct-response fundraising strategies tailored to smaller organizations. Here are ideas 1-5.
Temeles said smaller organizations should try to send direct mail in unbranded outer envelopes. She shared an example from the Southern Environmental Law Center. It sent its appeal in a plain, yellow envelope with no logo or images. All that was on the OE were the recipient's name and address, as we'll as the return address — both in simple type. It had no branding at all and wasn't anything special to look at, but Temeles said the piece had great results — and this technique is a good way to keep direct-mail costs down.
2. Gang print
"One of the issues with smaller organizations is how expensive everything is," Temeles said. "That's why it's important to carefully plan printing. See if you can print as many mailings as you can at the same time. It helps keep the cost per donor down."
She provided two examples from clients:
- Two acquisition mailings of 25,000 pieces printed separately cost $7,198 each. When printed together, they cost $6,146 each — a savings of $2,105. That resulted in an 8.7 percent decrease in the cost per donor, from $81 to $74.
- Two appeals of 5,000 pieces cost $3,157 each printed separately. Printed together, they cost $2,461 each — a savings of $1,393. The impact was a 9.7 percent decrease in the cost to raise a dollar, from 30 cents to 27 cents.
"The more you can print at the same time, the better it is for costs and ROI," Temeles said. "If you can plan out mailings and get them together early, go for it."
3. Personalize strategically
"Think about when and where to focus your attention with personalization," Batcheller said. "We all have limited time and resources, so we can't focus on everything all the time."
She shared two examples where the Lincoln Center tested personalization. In the first example, the organization added personalized giving amounts and membership information on its renewal e-mail landing page. Prior to the landing page renovation, the renewal e-mail had a 24.8 percent open rate, 7.5 percent clickthrough rate and 3.1 percent response rate. After the renovation, those numbers jumped to a 31.9 percent open rate, 8.1 percent clickthrough rate and 4.6 percent response rate, which led to a 48 percent increase in the number of gifts thanks to the increased personalization.
In the second example, the Lincoln Center actually tested a reduced level of personalization in the fifth installment of its direct-mail renewal campaign. Prior to the renovation, this direct-mail piece had a 6.93 percent response rate. After reducing the personalization, the response rate jumped to 7.17 percent. Thus, the result of reduced personalization in this renewal piece was a 3 percent increase in the number of gifts.
4. Experiment with premiums
Premiums are still used quite often in direct-response fundraising, so it's never a bad idea to test a premium offer against your control, as well as testing different types of premiums. The Lincoln Center did this in 2009, testing an up-front discount offer versus a back-end DVD premium. Its September 2009 mailing offered the introductory up-front discount, seeing a 0.35 percent response rate and $69.36 average gift. Then in December 2009, it tested a DVD premium for gifts of $150 or more, which resulted in a 0.5 response rate and $96.30 average gift. The result of changing the premium offer was a 43 percent lift in response and 39 percent lift in average gift.
5. Mine your data
"It's very common for fundraisers to be asked to raise more with less," Batcheller said, which is why it's important to use the data you have. She suggested using a philanthropic rating model to better target the prospects most likely to become donors.
The Lincoln Center did this using an outside vendor. It sent its donor file to the vendor and applied a more targeted model to ticket buyers in the hope of decreasing the size of its acquisition mailings to get more bang for its buck.
In September 2008, prior to applying this philanthropic rating model, the Lincoln Center sent its acquisition package to a universe of 110,236. The response rate was 0.23 percent, resulting in a gross revenue of $18,093. When the expenses were factored in ($43,455), the cost to raise a dollar was $2.40.
Then in May 2009, after applying the philanthropic rating model by mining its data, the acquisition package went out to a universe of just 41,969. But since the prospects were better targeted, the response rate was 0.89 percent, resulting in a gross revenue of $25,085 — higher than before. When the expenses were factored in ($19,984), the cost to raise a dollar dipped to just 80 cents. As a result of this change in data strategy, the Lincoln Center was able to reduce costs by 54 percent and still increase revenue.