Last week I was sifting through my mail and was surprised to find an acquisition solicitation from a well-known national charity. It wasn’t the fact that I was solicited that surprised me (it being the season of the year-end ask, after all;) it was its size. The 10” X 13” envelope and the sheer weight of its content piqued my curiosity. So, in spite of the fact that my name was misspelled and my gender incorrect, I opened the envelope.
Accompanying the usual four-page appeal letter, pledge card, stamped addressed envelope, and a couple of other pamphlets, was a full-sized, full color calendar for 2010, the kind you get from your real estate agent or local gardening store.
I turned first to the letter. For four pages, it appealed to me through various print versions of screaming, to send them a donation in order to, well, have “hope”. No evidence of recent accomplishments with contributions from donors in the past; no indication of how the money raised through this appeal would be used.
So, taking their “hope theme” to heart, I turned to the calendar, hoping against hope that each month would feature a research breakthrough, a patient testimony, or a community outreach innovation that showcased the charity’s accomplishments. But, no. It really was a real estate calendar, with scenes of pretty houses and pastoral landscapes.
Fundraising by Anxiety and Guilt
This calendar is an example of premium mailings taken to a whole new level (and I don’t mean up.) Premium mailings are solicitations containing presents that have no relationship to the charities’ mandates. They induce giving by preying on donors’ feelings of anxiety and guilt — anxiety that charities who send these things will lose money if donors fail to respond; guilt over feeling they should thank not-for-profits for the gesture by making contributions — even though these presents were neither requested nor desired.
By pushing those sensitive buttons, charities make more money on premium than on non-premium solicitations — in the short term. The problem is they are counter-productive in the long run. In fact, after rescuing charities from a potential fundraising disaster, donors are, ironically, left only with hope – hope that you will stop sending this junk in the future; hope that you will replace those gift cards, address labels (misspelled), fridge magnets, and now calendars, with measurable results on their gifts at work.
But, their hope is seldom realized. Responding to premium mailings generally unleashes a stream of additional solicitations aimed at overcoming that huge up-front investment. And, now, donors who felt coerced into giving in the first place, have over-solicitation to fuel their growing frustration.
Premium mailings may get more people to give initially, but they are not effective at sustaining donor loyalty. Donor attrition in direct marketing programs is still over 90% and climbing, and early donor attrition (first gift to second ask) is now about 65%.
Upping the ante on the cost of acquisition in a recession is particularly risky. In our national study on the impact of the economy on philanthropy, we asked 22,000 donors about how their giving philosophies and practices are changing. Dropping charities earlier who over-solicit, and eliminating those with real or perceived high cost-per-dollar raised, were their top two responses.
I know that direct marketers are trying to do their best in the toughest of times. But, fundraising profit is made by increasing the margin between the gift amount and the cost to get it, not by increasing the volume of donors giving at an entry level value – especially when the cost per dollar raised is so high.
Development Directors need to help their direct marketers (and their Boards and CEOs) understand that an approach to fundraising that relies on coercion has negative consequences down the line. Everything is connected to everything else in fundraising, which means that the decisions you make in direct marketing today will affect your major and planned gifts pipeline tomorrow.