Talking to Your Board About Direct Response

Where can this challenge damage a nonprofit?
I’ve seen otherwise knowledgeable and successful board members:

• advocate that the acquisition budget in digital, mail, DRTV be slashed in order to improve the current year’s net income and fundraising ratios;
• opine that people don’t want to receive letters anymore and the organization should simply email its donors;
• share that someone they know complains about receiving too much email and snail mail, and conclude that the organization should cut back on frequency (and on expenses);
• insist that people want to invest in success, so the organization should emphasize the positive results of its programs rather than showing need; and
• champion “the next big thing” in marketing as a way to attract hipper, younger people to the cause. (Millennials are a vitally important audience to many consumer product companies, but they are not one of the primary, economically viable target audiences for fundraising. They can be effective advocates for nonprofit causes as well as volunteers and event participants. But when targeting for direct-marketing revenue, attracting “younger” donors means trying to get people in their 40s.)

The opportunity
Smart nonprofit leaders recognize that their board members are successful in their own lives and careers because they have the ability to learn and grow. The facts are friendly. Your CEO and chief financial officer can be — in fact, must be — very effective spokespeople with the board to lay out the business case for your direct-response fundraising program. That means you have to make sure your CEO and CFO have all the info and understanding they need. To do this:

• Map out the long-term value of your donors, and explain how you calculated what you can afford to spend to acquire and cultivate them. Get your board used to evaluating everything over the long term — not simply campaign by campaign.
• Show them the money. You’ll be amazed at what happens once businesspeople understand that for every dollar you invest in direct-response fundraising, you net $3 to $4 for your cause.
• Quantify natural attrition and the steps you’re taking to build your largest asset — your active-donor file.
• Map out projections to demonstrate the long-term impact of cutting acquisition — as well as the impact of investing more in successful online and offline acquisition programs.
• Study industry frequency testing, and if necessary, conduct your own cultivation frequency tests to determine the optimum number of appeals based on the response (net revenue) of your donors, not someone’s opinion.
• Run head-to-head tests of your channels (digital, mail, DRTV, phone, events), and calculate the long-term donor value and net revenue over time of donors acquired via each channel to determine the right media mix. And show how the value increases dramatically as you engage with donors through multiple channels.
• Do in-market testing, not simply focus groups, on your best offers (Success/need? Monthly sustainer? Advocacy? Generic/specific? Founder/celebrity/CEO/recipient?), so you can meet the donor where she is, rather than where you (or your board) wish she were.
• Do the analytics to demonstrate the impact of integration not just across channels, but up the entire donor pyramid to show your board how direct-response donors (the bottom of the pyramid) can be migrated to produce monthly contributions, major gifts, capital-campaign support and planned-giving revenues.
• Finally, consider inoculating your board in advance against the stereotypical objections. I once told a conservative, development-shy board of a $20 million nonprofit that we had a way to raise an additional $1.5 million net a year. After explaining the strategy, I warned these board members that they’d probably hear complaints about the fundraising from friends, neighbors and even family, but, “If generating an additional $1.5 million isn’t worth the hassle of complaints, tell me now and we won’t do it. But if we go forward with it, let’s agree that we’re in it together and not going to be discouraged or deterred by complaints.”