Raising the Bar for Higher Gifts
So, you want your $100 check writers to start writing $200 checks and your $250 folks to give you $500? Well, all you have to do is ask.
Be warned, however, that any time you push to increase the size of a gift you will, more than likely, reduce the response rate of the initial mailing or offer. But the net impact over the next 12 months can be significant and positive.
You see, for every mailing from that point on you can begin building your gift array or ask table based on the highest previous contribution. So if you double or even slightly increase your HPC, you will dramatically increase the cumulative giving for each donor over the next 12 months and, most certainly, over the donor’s lifetime.
If the lowest amount you ask for in future mailings is the upgraded HPC, you will see a dramatic increase in overall revenue because you have raised the benchmark of giving.
In Sept. 2004, our organization, Judicial Watch, a Washington, D.C. watchdog organization, decided to target its best donors and encourage them to give more. We reached out to fundraising agency Copland O’Neill and data-analytics company StrategicOne and asked both for some suggestions on how to accomplish the task.
StrategicOne, based in Kansas City, analyzed and identified 35,000 donors on its database who would be most likely to respond to an upgrade campaign. Then Copland O’Neill came up with a three-part campaign designed to encourage these house-file donors to double their HPC.
The ask strategy was a bold attempt to encourage as many people as possible to double their gift amount. Judicial Watch, in a normal house-file appeal to these segments, would see a 5 percent response rate. The goal in the donor-upgrade initiative was set at 2.5 percent per appeal in the campaign.
StrategicOne identified a campaign theme that would lend itself to a higher ask strategy and make donors feel like they had an increased level of involvement in the mission of the organization.
The campaign would consist of:
1. Announcement Package (monarch size, clear envelope, live-stamp return envelope, one-page letter with reply);
2. Main Appeal (mails 10 days after the Announcement Package, nine-inch-by-12-inch clear outer envelope, four-page letter, confidential seven-page memo, reply, BRE); and
3. Telephone Close (Begins 10 days after main appeal is mailed. Call pushes people to send a gift at the double HPC level. However, if donors say that they can’t give at the doubled level, we allow them to downgrade to what they can afford.).
So, within 30 days you contact your best donors three times around the same campaign.
Initially, people in the organization questioned our goal of an initial response rate of only 2.5 percent per appeal in the campaign. Setting a goal that is 100 percent lower than your standard house-file response rate seems a little counterintuitive, but the upside over the next several months is what makes the math work.
Time would tell for the Judicial Watch donor-upgrade program. The announcement package hit the first week of November and received about a 3 percent response rate. Ten days later the Main Appeal hit, and returns came in again at about a 3 percent response rate. Finally, 10 days after the Main Appeal, the donors’ phones began to ring. (The telephone campaign was conducted by Nick Starvarz and Alisa Getzinger of Synergy Direct.)
Three percent plus 3 percent does not equal a 6 percent response rate in a donor-upgrade program like this. If you segment the right donor targets, the long-term increase in revenue can be exponential.
We were amazed that each of these donors continued giving at the higher level with a subsequent contribution in December, January, February and/or March.
Judicial Watch’s revenues in this group are up more than 300 percent in Q1’05, compared to the same period in 2004. Approximately 1,000 people increased their HPC. If each of these donors makes the same number of gifts in 2005 that they did last year, but gives at their new benchmark HPC, Judicial Watch will see an increase of more than $600,000 by year’s end.
When you add that $600,000 to the initial $454,468 acquired in the campaign, the bottom-line impact is $1.05 million in additional revenue.
Roy Jones is director of direct marketing at Judicial Watch. He can be reached at email@example.com.