Scenario planning your direct marketing budget

Yesterday, I discussed the idea of budgeting to a bad-case scenario budget that is approximately one standard deviation out in terms of results.  (Note I do not say a worst-case scenario.  As the Backyardigans have clearly articulated, things could always be worse.)

This is what you get listening to the father of small children.

This scenario planning allows for another benefit – to know where you are toward your budget and be able to adjust it.

So let’s say you are on a calendar-year basis, you have a one-standard-deviation-down budget as recommended, and as of April, you are hitting the middle-case scenario, exactly where you thought you would most likely be and ahead of your budget.  What do you do?

Well, yes, you could throw a party, I suppose.  But I meant “what do you do with your program for the rest of the year?”

Too often, the automatic response will be that you continue to execute the plan you budgeted for.  This is not unreasonable – the plan seems to be working, after all.

But this also leaves opportunity on the table.  If you have a potential surplus and the rest of your organization is performing to budget, this is an opportunity to make additional investments to increase your program.  Note the “your organization is performing to budget” point.  This is a key factor – sometimes you will be asked to supplement the budget in other areas that are not performing to goal; do this willingly, as it will be these areas that supplement you the 16% of the time you are having challenges.

This is why as a part of your budgeting, and then dynamically throughout the year, you should be looking at “if this, then that” investments.  In your budgeting process, this can be as simple as “if we are $100,000 ahead by April, I’m going to spend an additional $50,000 in acquisition.”  Note that this would increase your costs and decrease your ROI compared with budget, which is another reason these are false indicators for your program.

When you get into your direct marketing year, however, you will want to be more specific with your goals based on performance so far.  Let’s say that one of the reasons you are better than budget is that your deep lapsed 37-48 month segments have been performing better than you had projected and the surprising success of the soft ask on an email mainly targeted at advocacy efforts.  You may still want to make that $50,000 investment, but you don’t want to put that into straight mail new donor acquisition just because that’s where you thought you would go at the beginning of the year.

Instead, you may look at:

  • Testing deeper lapsed audiences with the messaging that worked best for your 37-48 month constituents.
  • E-appending deeper lapsed audiences that you might normally to double down on an audience that seems more responsive than you’d planned.
  • Testing a mail version of your advocacy email series.
  • Looking to shore up weaknesses in the program. If you found that you were not hitting your targets for online acquisition, but had a strategy that was working, upping the investment there could be beneficial.

These are the same sorts of the things you will be looking at in scenario planning if you find yourself under budget in April.  While the fluidity of investment opportunity can be heady and thrilling when you are above budget, your goal when you are under is to minimize soul-crushingness and longer-term opportunity damage.

So you’d be looking at this in converse.  If lapsed reacquisition was doing well, but new donor acquisition was significantly off target, you may be able to shift a portion of your new donor acquisition budget to lapse reactivation and maintain your donor file while preserving your net.  Other tactics to minimize damage as you trim investment is to reduce or shift testing.  While it is painful not to get the knowledge from new communications that you normally would be able to get, it can be less painful than having a smaller or worse donor file at the beginning of next year.

Here, online testing can be your friend.  If you have a telemarketing script or mail piece that you were looking to see if would work for your file, try a version of it online first.

I can hear you saying “these are difference audiences” and you would be right.  However, you can minimum the difference by looking at the responsiveness of just the people on your email file that were originally acquired through the mail or phone, then joined your online family.  These donors will look more like your mail- or telemarketing-only donors than the entirety of your file.  In a declining budget situation, you can then cut your testing costs by only rolling out with offline tests that have worked online.  Here you have the additional advantage of being able to set up an audience of people who responded to the appeal online as well to help you create that valuable multichannel donor.

If you are really doing well or poorly, you can also look at what can be referred to as cheating.  This is to say if you are doing immensely well and you have a piece scheduled to go out on January 3rd, you may want to change the mail date to December 29th so that the costs are incurred in the previous fiscal year (insert your own different fiscal year logic here).  This can help you use one good year to significantly increase the likelihood of having two straight good years.

I know, I know.  It doesn’t change the underlying realities.  An organization should value being up $300,000 one year and down $200,000 the next versus budget more than it values on budget both years.  But these artificial distinctions are important to your finance department, your ED, and your board, so it’s important to keep an eye on them, even if it is a skeptical eye.

To summarize a week’s work of virtual ink, for some, budgeting is a once-per-year process.  For you, however, it should be a constant process of refinement and adjustment.  Eisenhower said it perhaps best:

In preparing for battle I have always found that plans are useless, but planning is indispensable.

So don’t let your plan get in the way of what you actually do.

Scenario planning your direct marketing budget

Hitting your direct marketing budget 84% of the time

Much virtual ink has been spilt discussing why the housing market, then the US economy, crumbled like a Barbie chair under a sumo wrestler in 2008.  (My favorite account is Michael Lewis’s The Big Short; the book is excellent and now I’m looking forward to the movie)

In the end, through all the discussions of things like collateralized debt obligations, mortgage-based securities, and tranches, you could describe the problem as:

People assumed that stuff that would naturally all go wrong at once
wouldn’t go wrong all at once.

In this case, it was home mortgages.  Mortgages were looked at as individual special unique snowflakes, when in reality, the things that would make for one person to default on their mortgage (bad economy, failures of certain types of sectors or jobs, taking on too much debt, unregulated and unjustified lending) would make for a bunch of people defaulting on their loans.

By now, you are probably wondering what my point is.  My point is:

It’s reasonable to assume that which goes wrong goes wrong simultaneously in your direct marketing budget.

Yes, there are things that can affect individual communications that are not replicable.  But there are a number of scenarios that can be systemic, whether it is the failure of the economy, a messaging issue, or that viral video of your executive director riding a stolen police horse naked down a major highway.

(That is, the executive director is naked, not the horse, although that last part could really go either way or both.)

Traditionally, direct marketing budgeting and budgeting in general is not like this.  You set the budget for what you believe you can achieve based on previous years’ results and all of the things we’ve discussed this week.  You assume that the good and the bad will balance each other out – that your good tests will pay for your bad ones and that yours learning throughout the year will help expand things a bit beyond your budget.

But when you assume that the success of a communication doesn’t correlate with the next communication or the last one, you make the same mistake as those people who wrecked the economy.

Thus I would recommend setting a high, medium, and low scenario for each communication in your direct marketing plan.  Medium is what you believe is most likely based on your experience.  High and low are one standard deviation away from your plan; you budget for the low scenario.

It need not necessarily be one standard deviation – you can change based on your and your organization’s risk tolerance – but one standard deviation ensures that there’s at least an 84% chance that each communication will be at or better than budget.  If you have total correlation among your various communications (a worst case scenario), that means that you will only be under budget one out of every six years.

Ideally speaking, your budgeted scenario should have at least file replenishment level acquisition and reacquisition – that is, you should plan to end the year with as many or more donors than you started it with.

By budgeting for your “low” scenario budget, you’ve made your finance department happy (or at least less unhappy).  And you have the opportunity to trim out your investment as the year goes on, which I’ll discuss tomorrow.

Hitting your direct marketing budget 84% of the time

6 common traps in direct marketing budgeting

Direct marketing budgeting seems easy:

  1. Take last year’s budget
  2. Take out the losing communications and replace them with the results of the winners.
  3. Project that the communications will do the same thing as last year.
  4. Profit

And I have had budgets set this way by vendors. However, this overlooks a great deal.  In confession, some of these are things I caught before we put the plan in our organizational budget – some I didn’t.

Changing file.  OK, you may say – we have 1,000 more donors than we did last year.  We’ll assume the communications have the same response rate and average gift as before and just add to our quantity.

Wrong.  You need to look both at the number of people on your file and the lifecycle of that file.  Let’s say that last year, you did a lot of new acquisition (yay!) and your retention rate stunk (boo!).  As a result, your overall number of donors may not have changed much, but your composition is entirely different – you have far more first-time donors who will have lower response and retention rates and far less multi-year and core donors.  See my post about the fallacy of file size and single-size retention rates here for details.

Bottom line, if you assume your new donors will perform as they always have done, you are toast.

Spill in and spill out.  Accountants have a really good reason to artificially cut things off the way they do.  Or so they keep telling me.

The bottom line is with accrual accounting some of your costs will not occur in the year that you are planning to send out a communication.  Likewise, some of the revenues from a campaign will spill out of a year into the next year, especially for longer-lead time media like mail and telemarketing pledges.

It’s sometimes OK to assume that spill in from one year will equal spill out into the next year.  However, changes in file, size of efforts around year end, and when that darn print vendor decides to send you their invoice can all change whether you hit goal or not.

Communication performance.  I had a vendor report that a piece was going to do 4% response rate because that’s what it had averaged over the past three years.  When I dug deeper, the response rate over the previous three years was 5%, then 4%, then 3% (these numbers are fictitious; don’t believe any response rate that doesn’t have a point something).

I would argue this is perhaps a dying communication and that this is more likely to have a 2% response rate than a 4% response rate.  You don’t see that if you are simply averaging previous years’ performances.

Test failures.  If all of your tests are going to work, you are going to have to call them something other than tests.  Most of the time, your tests will not do as well as your control will do, so you can’t account for this by assuming you are get the results of last year’s test winners.

Speaking of…

Roll-out failures.  You had your test last year and it succeed at 95% confidence?  Chances are you if you tested at 25,000 pieces, you tested part of some of your better segments, not across all of the segments.  Perhaps the piece you have tested into is good for your current donor sets, but doesn’t fit with why your lapsed donors originally signed up with your organization.  If that’s half of the audience you were planning to mail to, you will want to dial back your expectations.

Interactions amount communications.  Let’s can you had record online revenues last year, but your mail program fell off and your donor file dwindled.  A good portion of your online donations are likely people who got their mail piece and decide to donate online; thus, you have to see how aspects of your program affect each other.

Hopefully, these help you make your budget; tomorrow, we’ll talk through scenario planning in your budgeting.

6 common traps in direct marketing budgeting

Setting your direct marketing budget anti-goals

Yesterday, I argued that the three things that matter in your budget are net revenue, file/program health, and cross channel/multichannel/omnichannel health (how much are you contributing to other fundraising and non-fundraising efforts.

That ignores some key traditional metrics.  And that’s intentional.  Here’s why:

Costs.  Many nonprofits look to minimize their overall costs (and believe you me, I have seen some nonprofits transcend lean and mean and become emaciated and ticked off).  But this is a fallacy in direct marketing.

Let’s picture direct marketing once again as if it were a magic box that you put costs into and got revenue out of.

If an additional $100 in the magic box brings you an additional $150 in revenue today, you should do that.  That’s covered by net revenue.

If an additional $100 in the magic box brings you an extra $200 next year, you should do that (unless you are in a hyperinflationary market).  That’s covered by program health.

If an additional $100 in the magic box brings you an additional .5% chance of a $100,000+ bequest (crosschannel health), you should do that.  That’s covered by crosschannel health.

The problem with overall cost as something you look to minimize is that it could ignore these three investment opportunities.  Don’t do that.

Gross revenue.  If the impacts on file and crosschannel health were the same, would you rather spend $2 million to make $4 million or $3 million to make $5 million?  Clearly the former, as you can getting more return on your investment.

Yet some nonprofits have a goal of “we will increase our revenues to X” instead of “we will increase our revenues to Y, net of direct marketing costs.”  The former gives an incentive to overspend at the expense of net revenue, program health, and crosschannel health.

This is yet another reason why Charity Navigator’s financial rates are so very, very flawed and actively counterproductive.  They have cost of fundraising in their model so that a 10% drop in ROI could cost you 2.5 points (out of 100 (actually 70 because they spot you 30 points)).

However, if that turns your organization into one that is growing substantially in income and program expenses as a result, instead of shrinking, you get an additionally 20 points (because revenue growth and program expense growth are two 10 points categories.  This is why Charity Navigator rated an active cancer charity scam three stars – because it was growing.  If you doubt me, here’s their rating from the handy dandy Internet archive.

Conversely, a charity that has encountered tough times will get zero points out of ten on both of these growth indicators, giving them two stars on financials or less, hurting that struggling charity in its efforts to work its way out of the hole.  I will at some point dedicate a week to the perverse incentives of Charity Navigator, which sets itself up as a watchdog but instead chews up your shoes and poops on your carpet.

Return on investment is important.  But it should be strived for, not budgeted for.  Later this week, you’ll see why, as we look to get to our optimal program.

So tomorrow, I’ll talk about the nuts and bolts of budgeting and some pitfalls to watch out for.

Setting your direct marketing budget anti-goals

Setting your direct marketing budget goals

So, you want to budget for your direct marketing…

Wait.  Scratch that.

So, you have been told to budget for your direct marketing.  None of us really want to set a budget.  Yes, you want to be able to project what communications and campaigns will do, the better to measure expectations for the future and learn from our successes and failures.

But the ideal direct marketing world would be one where there was not a number to hit, but rather a series of goals.  You would set up your communications and tests, learn from what was done, retool the program for the future given what you’ve learned, and get hot oil massages from attractive members of your preferred gender(s).

Back in the real world, though, it is imperative that our causes know what they can count on from the direct marketing program and, ideally, from the bridges you have created to events, major gifts, planned giving, monthly giving, and corporate outreach.  Someday, I will blog about multichannel attribution, just as soon as I feel like I’ve figured it out myself.  Or, to speed things up, if you think you have a handle on it, email me at and I would love to give you a guest blogging opportunity.

These budgets let us know what staff we can bring on, projects we can take out, people we can help.  It’s imperative that we set them and that we stick to them.

I would argue there are three relevant things for which to budget:

  1. Net revenue. Think of your direct marketing program like a black box for a moment.


    No, not that type of black box.  Hopefully.  Our black box is magical.  You can put in $100,000 and get $200,000 out.  You can put in $1.8 million and get $3 million out.  And, most importantly, you can put in X and get out Y, because our magic box is algebraic.

    Your organization needs to know what Y minus X is – how much does the magic box add to the money that is put into it.  Or, but another way, this is how much extra are you contributing to the mission through your activities.

  2. Program health. Your number and quality of donors determine how good your black box is going to be in future years.  There is a point at which this conflicts with #1.  A good program will take a maximized net revenue and reinvest some of that to help sustain and grow the program in the future.  Simplistically, this means acquiring donors.  Beyond that, it also includes the tests that fail so you have the benefits of the ones that succeed, cultivation communications that may not bring in immediate revenues but set donors up for better things down the road, and other tactics that sacrifice net for lifetime value (e.g., acquisition of monthly donors).
  1. Crosschannel health. This is more difficult to measure, but it will be to your benefit to start trying.  That is, how much if what you are doing helps out with other efforts.  A good example is with planned giving efforts.  An ideal target audience for planned giving appeals are 70-plus year old “tippers,” who give to your organization often, but not much, and who have substantial assets that may not be known by your organization or even conventional wealth screening indicators (living in modest homes and neighborhood, little to no stock activities, certainly no M&A or Wall Street stuff, and few political donations).  This is also a borderline audience for most direct marketing activities – they require more expensive (mail and phone) solicitation, they are unlikely to convert to monthly giving), and models will show them to have low lifetime value.  But what value do they have in the long-run?  A focus only on net revenue and traditional RFM-based file health metrics will ignore folks like this.

Purists will note that there are several things that are traditionally part of a budget that I don’t include here.  But that’s tomorrow’s post – the things that people think matter, but don’t.

Setting your direct marketing budget goals

A direct marketing bridge to… monthly giving

I had the pleasure of hearing a speaker from Greenpeace talk about how you should never ask for a one-time gift.  In fact, he went so far as to say that you should turn down the one-time gift if offered because it is the wrong response.

I loved this talk, but I will freely admit that I lack the intestinal fortitude and the spinal integrity (guts and backbone) to try this approach.  Monthly giving is certainly more and more popular and more accepted in the United States, both with credit cards and with EFTs.  Electronic banking has helped with this; hacking scandals hurt, as you force everyone who shopped at Target (a purely hypothetical example) to change their credit card on your site.



I can’t imagine why hackers would aim for this company…

But it still seems like we have at least one technological generation of people to go before every gift will be a monthly gift (Greenpeace, with a substantially younger supporter base than the average nonprofit, may already be there).

So I will confess that this is the wimp’s guide to getting into monthly giving.

First, as with planned giving yesterday, plan out your systems.  Part of this is the giving society you have for monthly giving (and benefit levels, if you choose to have them or incorporate a membership concept).  But the major part is managing exceptions.

You want to have a plan when credit cards are declined to try them again, potentially twice.  Then, you want to have a plan to reach out to that donor to attempt to obtain their new credit card information and a continued gift (telemarketing and email, not in that order, are preferred for speed).  Failing all attempts to get them into a monthly cycle again, you want to restart the appeal process, ideally to rejoin the monthly giving society.

The best way to do this is to charge all of your credit cards on one day a month.  Which is another way of saying “don’t use Luminate CRM for your monthly gifts.”  I had the pleasure of meeting with my then Convio, now Blackbaud, rep about one time per year and every time I would ask them to create the ability to charge all on one day so you can automate the recapture process and coordinate it with offline monthly donors.  They would look at me with the same expression that a Labrador retriever would use to regard the space shuttle and say they had never heard of something so absurd and no one else in history would ask for such a thing.

While just meant that I talked to more of their customers than they did because most people I talked to bemoaned the lack of single day processing.

So you want an online and an offline system for processing your cards and EFTs in place and a system for following up on declines.

Now, as for getting monthly donations, you should definitely have monthly giving incorporated into your online strategy and as much a focus of your donation forms as you can without giving away net.  You should also have it mentioned in direct mail pieces, especially in acknowledgment follow-ups (a good opportunity for a buckslip for the people who aren’t getting the planned giving one) and donor newsletters.

But telemarketing is the best means I have seen of getting a bulk audience of monthly giving donors.  Modeling your donors helps immensely. Your donors who already use online banking, who are receptive to telemarketing, and/or who do frequent online ordering are going to be good targets for this. Also, your telemarketing vendor should have a history of who paid by credit card in the past.  I’m not saying the people who send checks in for a pledge will be entirely useless for monthly giving, but I will say they will be mostly useless (for this; they are lovely people who are doing great work through great causes).

Since I’ve been critical of Blackbaud above with my Luminate ravings, I will say that I’ve had good experience with the Target Analytics Group’s telemarketing receptivity index.  I’ve found that it does a good job of separating out among people who haven’t given by telemarketing to find who is most likely to (that said, everyone who had given a gift in telemarketing before outpaces everyone who hasn’t in terms of calling).

One weird data anomaly – when I did sustainer calling, the best performing group were the people who had given through telemarketing to us, but rated low on the TAG telemarketing index.  We hypothesize that these were our special little snowflakes who we knew gave through the phone, but no-one else did.

Use a follow-up ask in traditional telemarketing. While you can and possibly should do telemarketing strictly for monthly givers, you can work with your callers to ask for a monthly gift after they have the credit card information from a donor.  The script would go something like “Thank you, Mr. Hinx, for your donation of $40 today.  Before I process that, would you like to be part of our [name of monthly giving society]?  It’s for especially loyal donors who make a gift each month on your credit card that you can cancel at any time.  I could set you up for a donation of $10 a month instead of your $40 donation today?”

The divide by 3-5 to get the monthly gift is a pretty good rule of thumb.  Before I had a lot of online giving experience, I took our average offline gift, which was about $28 at the time, divided it by 12 to get $2, then set up an ask string of $2, $4, and $8 for a monthly gift.  The average monthly donation on that form was almost $10 – the first and only time I’ve had the average gift be higher than anything on the ask string.  So learn from my idiocy.

In fact, if I had to rename this blog today, I could do far worse than  It is available, but at some point, I’m going to have to blog about how rebranding is almost never the answer to a fundraising question, so Direct to Donor it is.

Thank you for reading once again.  Please let me know what you’d like me to cover next at or in the comments below!

A direct marketing bridge to… monthly giving

A direct marketing bridge to… planned giving

If you look at a planned giving consultant’s guide to how to approach planned giving, direct marketing will be a significant part of it.  In fact, they will want to take over the entirety of your direct marketing program.

It goes without saying that you shouldn’t let them, for the same reason your three-year-old does not get to pick what s/he eats.

However, there are intelligent ways to use your direct marketing savvy to cultivate planned giving prospects.

In order to market your planned giving society, you need to create your planned giving society (contrary to popular belief, my master’s is in marketing, not the obvious).  That is to say, you need to give your society a name (even if it’s as simple as the [Your Organization Name Here] Legacy Society) and let people know what will happen when they join by letting you know they have named you for a bequest.

In addition to creating the society, you need to create the systems to handle inbound queries by phone, mail, or email.  The person or people that help with this need not have legal training – in fact, it will likely help you avoid acting like a lawyer if you are not one – but should have a knowledge of different types of instruments for giving.  At its simplest (which can you shoot for if you are just starting up your planned giving program), you can start with just wills/bequests, of which there are few variations:

  • A fixed amount of money
  • A percentage of an estate
  • A fixed amount of money after X is taken care of (X can be family, friends, other charities, etc.)
  • A percentage of an estate after X

Pretty simple; don’t let the lawyers complicate it.  This can be a part where a direct marketer can help.  We are used to boiling things down to a low reading level and making abstruse concepts understandable (for example, by not using the word “abstruse”).  Research shows that complicated words like “charitable remainder trusts” and “bequests” can scare people away when we really mean “making a will.”

The systems you create should be fairly simple as well.  You should have a response system for whatever means they contact you for people who are considering a planned gift and one for people who have told you they have designated one to be made.  For the latter group, you should show them the love – donor newsletter, customized copy in mail and email pieces, recognition and regular thank you’s.  You want these donors to have guilt if they choose to remove you from their will.

Once you have your inbound systems in place, it’s time to work to attract planned giving donors.  You are looking for similar quality here as we talked about for major givers.  In fact, planned giving is a common fallback from a major gift ask (“I realize you may not be in a position to make that gift of eleventy billion now; would you consider us in your will?”).  To summarize for those who have not memorized the canon of this blog, you are looking for loyal, long-term donors, or those who have demonstrated a deep passion in other ways (e.g., volunteering, a large initial acquisition gift).

And you are looking for people who are older.  Planned giving experts will tell you that you should start with people in their 40s and 50s, because these are the people who are most likely to be putting together their first will or thinking seriously about this.

This may be true.  But there’s not one single other investment you can make at your nonprofit where you will say “now, all we have to do is wait 30-40 years and we’ll start to see if this investment paid off.”  Nor should there be.  For one, you lack effective testing data (reporting of leaving in a will is only a middling indicator of actually leaving in a will); for another, the time value of money has eroded so much over that time as to be negligible.

And, as a fundraiser, not one single person will pat you on the back for the bequest in 2058 that you set up with your marketing today.

So I would suggest a much older age selection for your planned giving prospects.

Then, planned giving experts will tell you to mail and call this entire file.  Also, car donation experts will tell you to mail and call your entire file about donating your car.  Everyone wants you to spend your money on their thing.  I haven’t seen anyone advocate a telemarketing campaign to get people to use text to donate, but I’m sure I will.

Instead, save your money by piggybacking on pieces you are already doing.  Donor newsletters are a great place to put planned giving information because those are the loyal donors who are most likely to participate.  Similarly, you can insert a planned giving buckslip into your acknowledgment envelopes for people who are in your target audience much cheaper than you can for a single mailing.

Now take the money you saved and run another donor acquisition campaign.  You’ll do more for planned giving by having a larger file with better donors than you will having a one-off planned giving campaign.

So those are bits of the direct marketers guide to planned giving.  Tomorrow, we’ll wrap up the week with the bridge to monthly giving.

A direct marketing bridge to… planned giving

A direct marketing bridge to… cause-related marketing and sponsorship

What, you say?  Corporate is a completely different silo in our organization from direct marketing.  It’s not even like major gift officers where they are working from the donor files we create – corporate relationship folks are working directly with C-level execs from companies, not people who started out as $15 donors.

Au contraire, mon ami.*  Direct marketing can be useful in helping secure relationships with companies that didn’t know they wanted to partner with your organization.

The first step is to append your file with as much data as you can get your hands on, if you haven’t already done so.  You are looking for:

  • Demographic data – age, sex, income variables, etc.
  • Political data – which candidates someone gives to is a matter of public record. This has almost nothing to do with reaching out to corporations but is something you should have on file from a data perspective, as people who donated to political campaigns are significantly more likely to donate (and donate more generously) to nonprofits.
  • Purchasing patterns
  • Interests

Ideally, you would also survey your list(s).  This is done most inexpensively online and can help you get a feel for the demographics of your online supporters and event participants.

From this, you may already see some potential partners emerging.  If your core constituency has an unusually high percentage of people who drive motorcycles, your corporate development folks, armed with these data, can make a more effective pitch to those companies.

This list, and your information about it, is your gold mine for the corporate world.  Assuming that there is not a strictly philanthropic reason for them giving to you, they are generally interested either in what partnering with you will do for their brand among a certain segment or segments of their customers or potential customers or in what your constituents could be persuaded to do with them in a cause-related marketing relationship.

Even in the first instance, your list is your gold mine because companies will assume that if you have, for example, heavy support among 35-55-year-old women, their 35-55-year-old female customer base might think highly about their support of you.

There are a couple of key factors in these relationships, though.  First is never to give up control of your list.  You can allow the partnering company to mail, phone, and even email your list (assuming your privacy policy allows it) with an offer for a cause-related marketing or affinity promotion done jointly with you.  But it needs to be your list, with your control over when and how it is communicated with, with no ability for your partner to simply absorb it into their list of information about their customers or into a prospect list.  In fact, you will want to introduce some dummy constituents into any files you share, even under an NDA and the strictest legal contracts, to make sure a list not used without your knowledge or consent.

The second is to make sure as the nonprofit, you are not responsible for the heavy lifting.  These cause-related marketing programs abound, with people more than happy to give you 10% of their sales, as long as your constituents enter promo code RIVERRUNpastEVEandADAM.  As a nonprofit, you are only ever able to acknowledge the relationship, state the nature of the relationship, and thank the company for their support.  You are not able to, and should not be able to, sell a product effectively.

And any partner that truly values you as a nonprofit will not ask you to do so.  The ideal relationship is one where the company values their relationship with you and promotes it as you thank them and appreciate their support.

Direct marketing can also help you acquire cause-related marketing.  Remember the ability to target specific individuals with your advertising? Look for your corporate sales team’s target list and market your programs and efforts to this audience.  They will think you are massive and omnipresent, when in reality you only could be with their support.

Additionally, your email list can help get you contacts at key companies, by looking at the .com portion of the address.  You don’t necessarily need to have the CEO on the list; the right janitor who believes in your cause may be willing to help you navigate to the right person at their company or help arrange a lunch and learn with the corporate staff.

So your direct marketing list and tactics can help you in the cultivation, success, and execution of corporate programs.  Good luck with this and please share any success stories in the comments!  Thanks!


* French for “That’s some straight up bull”

A direct marketing bridge to… cause-related marketing and sponsorship

A direct marketing bridge to… major gifts

Direct marketing specialists and major gift specialists seem to be opposites in style and approach.  One is impersonal, mass-market, with knowledge of the aggregate not the specific – the marketing equivalent of the Air Force; the other is all about personal relationships, forged one on one, with intimate knowledge of that one person you are pitching – the equivalent of boots on the ground Army or Marines.  This can often cause them to be rivals in the same ways the service branches are; they can also work together to accomplish a mission together like the service branches.

As a direct marketer, developing a small budget to a major gifts program is part defensive.  I once worked with a major gift officer who would mark a donor as no mail, no phone, and no email the moment they got on her radar screen.  Not only did this deprive us of the only real source of revenue we had from these donors, but it also deprive the donor of the information that was tethering them to the mission and tugging at their heart strings.  And when she left, we had no way of differentiating real unsubscribes from these unsubscribes of pseudo-convenience.

This is going to happen if you can’t create a positive experience for potential major donors in your direct marketing program.  Yet it can happen and it can cost tens or hundreds of thousands of dollars for the nonprofit.  There are only two reasons to stop communications with your potential major donors in this way: 1) if they ask you to or 2) you have a relationship with that donor to the point that there is a substitute communications strategy and ask framework in place.

So your role in direct marketing is to build the relationship with the donor over time.  This doesn’t necessarily mean a slower cadence; rather, it means different types of pieces, including a donor newsletter telling them about their accomplishments – the true impact of their giving.  It can also include higher-touch, higher-value communications – handwritten notes or cards, invitations to special events or briefings, or the like.  These can enter the communication stream gradually as your relationship builds.

Direct marketing is also a great vehicle – in fact, a primary vehicle – for identifying those donors who may be receptive to a major donor ask.  While some amount of wealth is certainly a necessary condition for a person to be able to make a major donation, the more important thing to the organization is the tie to the organization.  People often forget this.  If I had a nickel for every time a nonprofit brainstorming potential targets thought of hitting up Bill Gates or his foundation because of a friend of a friend, I would be blogging about what yachts are the most fun to waterski behind.


If this man is your major donor strategy,
you do not have a major donor strategy.

What you are looking for is:

  • Giving history – long, repeated, multiple gifts per year, and increasing gift amounts
  • Participation – telling a story, coming to an event, volunteering
  • A clear passion for at least one aspect of your mission either from his/her giving history or participation

The one exception to this is people who make unusually high (whatever this is for your organization – probably between $100 and $1000) first gifts.  This is probably a person who has been interested in your cause for a while or has an important reason to start giving now – they may be ripe for personal interactions as much as your loyal long-term donors.

Looking at this compact list, you can see that you can not only help solicit major donor prospects, you can help create them.  This is by incorporating upgrade strategies into your communications.  If you have well-defined recognition for different levels of giving (and you should), you can make those aspirational, especially for those on the cusp of reaching them, by making the ask for the next highest level of recognition.  Those recognition levels should also be a prominent part of your mail, phone, and online communications, as well as your acknowledgments for these donors.

Finally, remember to thank extremely well.  If you are at lost as to how, check out 50 ways to thank your donors.  Some are usual, some are a bit nutty, but they may spark some ideas to giving your major donors and potential major donors the love they deserve.

A direct marketing bridge to… major gifts

A direct marketing bridge to… events

Direct marketing for nonprofits is usually a tool to get a donation.  This week, I’m going to look at the ways you can build bridges to other development areas to help that famous rising tide lift all boats.

I’ll start with peer-to-peer fundraising events, in part because of the degree of difficulty.  Event participants and event donors are notoriously difficult to convert to other forms of giving.  Event participants feel like they gave as part of the event (and they did); event donors are giving more to their friends than they are to the cause.  And the vice is versa’ed – demographically, your average direct mail donor is not likely to want to do your endurance three-day, less she break a hip.

True story: I once participated in a charity 5K that started and ended on Federal Hill in Baltimore.  Here is the view from the top of Federal Hill where we started the walk:


And here is the view from the bottom of Federal Hill up to the top:


Hat tip to for the images

We had a lot of people stop at the 4.9K mark that day.

Where was I?  Oh, yeah.  Walkers don’t convert well.  But in acquisition, we are certainly reaching out to less likely prospects.  With walkers, you know they know who you are and believe in the mission.  You may even know a bit about why they are walking.

So they are an audience worth reaching out to, both to garner additional donors, and to improve their retention for future year’s walks.  Some of these ideas will be applauded by your walk managers as helping them do their jobs; some will have you burned in effigy for trying to “steal” “their” donors.  The trick is to do enough of the former that they will forgive you for the latter.  Here goes:

  • New walker welcome kits (online or off). With most walks, your immediate communications are “thank you for signing up; here’s how you can make money for us.”  This would help mix in messages that welcome the person to the mission of your organization beyond welcoming them to the walk.
  • Similarly, during the walk process, mix in other topics like advocacy alerts to deepen engagement to the organization.
  • Try a telemarketing cycle to your walkers well after the walk is completed. This can both ask for a donation and announce the day and time of the next year’s walk.
  • Addressable media to past participants. Remarketing, cotargeting, and like audiences can be a good way of retaining old walkers and bringing in new ones.  If you don’t know what I mean, I highly recommend Friday’s post on just this topic.
  • Throughout the year, you should try mailing walkers to become offline donors. Ideally, this would feature walker specific messaging and incorporate what you know of why they chose to walk.  Strong techniques could include a walk survey to gather data on your walkers (and to act as a reply device) and a save the date lift note for the next year’s walk.

Because of the inherent national/field friction in some national organizations, I would strongly recommend running these techniques as a test in year one with sites that are willing to experiment.  Using the other sites as a control, you can then present how much better the direct marketed to walks did versus those that didn’t have the wind at their back from email, online, mail, and telemarketing.

A direct marketing bridge to… events