I received an appeal in the mail the other day from a hospital I have neither frequented nor supported as a donor…even though they think I have. As a past donor to…. was how the letter began. What a careless mistake, I thought to myself. But it turned out that I was the one who was wrong.
Soliciting past donors using language that implies they have never given before is an all-too-common mistake. Failing to conduct a thorough list purge before executing the campaign is at the root of that problem. But this was different. And, while I was surprised that the hospital would make such a basic mistake, I lingered over the letter for awhile. It was much better than typical acquisition appeals because it was crafted for past donors. The urgent insistence that I give while not telling me why I should was replaced with real information crafted in a considerably more sophisticated style. As I dropped the letter in the recycling bin, I wondered why not-for-profits didn’t simply use this kind of approach with everyone – prospects included.
Several days later I realized that, in fact, I was a former donor to this hospital.
Last year my bank manager asked me to sponsor her in a run-a-thon in support of her hospital. The hospital was not in my community, but of course I said ‘yes’. Would you say ‘no’ to your bank manager?
This is why my name got onto a file of past donors. So, first, congratulations to the Hospital Foundation for wondering whether fundraising event sponsors are legitimate prospects for direct giving. But, second, off to your room with no supper for testing that thesis so poorly.
Through our annual Burk Donor Survey, my firm recently surveyed 15,900 donors who had sponsored someone in an athletic fundraising event (run-a-thon, bike-a-thon, etc.) sometime within the previous year. While their primary motivation for sponsoring was to support a friend, relative or colleague who was participating in the event, 50% said that the not-for-profit behind the event also played a role in their decision to sponsor. We then asked that 50% whether they would make a direct, philanthropic gift to that not-for-profit if asked. 17% said yes; another 14% said they might. That is much better than today’s typical acquisition rates, so it is certainly worth testing the potential for converting event sponsors to philanthropic donors.
But the issue is how you test a file of donors that represents such a unique stakeholder group. Event sponsors are different. Their primary relationship is with the runner or the cyclist so it is not surprising that they remember the event and the participant better than they do the recipient charity.
If the Hospital had pointed out in their appeal letter that I was a former donor through their run-a-thon held last year, I would have been impressed, not disappointed. I’d be impressed that their records were that good and further impressed that the Hospital thought to use that important information to remind me of how I was connected. But, most important, if that letter had come from my Bank manager on behalf of the Hospital that was so important to her…well of course I would have given.
Connection and influence – it simply can’t get better than that.
Not for profits can no longer afford to dump lists of names into one-size-fits-all acquisition or renewal appeals and then hope for the best. The margins have shrunk too far. Over the last decade, five of the six indicators of direct marketing health have been in steady decline – participation by percentage of population, acquisition, gross revenue, renewal, and recovery of lapsed donors. Even the sixth, average gift value of retained donors, only improves when the economy is buoyant; it drops like a stone when it isn’t.
Progressive Development Directors and Managers can still guide their staff to better results in direct marketing if they insist on a more nuanced and innovative approach. A direct marketing database is not a monolithic pool of file names and gift amounts. It is a complex collection of people who think logically, who make careful choices, and who manage their philanthropy strategically.
Our most recent edition of the Burk Donor Survey found that 40% of donors left money on the table last year. They are capable of giving much more and eager to reward not-for-profits that cast aside predictable behavior and showcase fundraising at its finest instead.