Quantity versus quality of pieces in donorcentric fundraising

Food for the Poor, the DMA’s Nonprofit of the Year last year, sends 27 mail pieces in its control donor series throughout the year.  These are all very good donorcentric letters, focused on the impact that you as a donor are having in saving people in their times of desperate need.

Another nonprofit of my acquaintance that will remain nameless, sends out one appeal per year.  When they asked me whether they should send a second piece, I told them that they should make their one piece work first, because it was not a compelling appeal.

There are wonderful donorcentric people who argue that nonprofits need to reduce the amount they communicate across the board.  I would argue that they need to reduce the amount they communicate badly.

Let’s take a look back at the reasons that people give for stopping giving to a nonprofit from Dr. Adrian Sergeant (first covered in Wherefore Segmentation):

 

reasons-for-lapse

As you can see, 72% of the reasons were related to not getting our message across like “other causes are more deserving” or “I don’t remember donating” or “they don’t need money any more.”  Less than four percent said inappropriate communications.  People are leaving because we persuade too little, not too much.

And as for the sentiment you may get about mailing too much, Van Diepen et al looked at irritation from nonprofit mailings.  They found that irritation can be incurred from mailings, but that it had no impact on revenue per mailing.  That is, people kept donating at the same rate per piece.

As Jeff Brooks put it in his wonderful book The Fundraiser’s Guide to Irresistible Communications:

[A] typical donor gets at least 10 pieces of unsolicited mail every delivery day.  That’s 3,000 pieces a year.  If you write to a donor twelve times a year, you’re sending 0.4 percent of her yearly total.  If you stopped mailing, the daily average would drop from 10 to 9.96.  Not a meaningful difference for you and your donor.

But for you, that cutback would mean lost revenue, forever.  A loss of hundreds, maybe thousands, of dollars from each donor.

You’ll never solve the Too-Much-Mail problem if you treat it as a numbers game.  The real issue is the relevance of the mail, not the volume.

All of that said, you could be mailing too much, as measured by both your net revenues and a true donor focus.  Here are some of the symptoms:

  • Channel mismatch. It is correct and laudable to try to get an online donor to give offline and vice versa.  However, there is a point of non-response (that varies by organization) at which the online donor is very unlikely to give.  For example, if someone gave their first gift online, continues to give on online, and hasn’t so much as looked at 10 mail pieces from you, you might be wasting money in sending those appeals (note: I say those appeals – perhaps a mailing that encourages her to go to the Website and make a donation is just what the doctor ordered).
  • Seasonality mismatch. If someone donates every November or December like clockwork, but never a second gift in the year over five years, you are probably safe in reducing the mailings they receive in spring and summer.  Note that I don’t say eliminate.  It could be that the updates they are receiving in the summer are the reason they donate in the winter.  But you can probably save some costs here.
  • Mismatch of interests. As we’ve advocated in the “change one thing” approach to testing, you can find out what messages people will respond to and what they won’t.  One you learn that, for example, a person only gives to advocacy appeals, you can safely cut some of the other types of messages they get.  Or someone who only gives to premium pieces get premiums (but for whom they are a turn-off don’t).
  • Systemic waste. Additional mailings should do two things: increase retention rates and increase total program net revenue.  That is to say, it’s not enough to say “this piece is a good one because it netted positive”; you need to be able to say that without the piece revenues would have been down overall.

To make the math simple, let’s say you mail three pieces, each of which gets $100K net revenue.  If you eliminated one of them and two pieces started making $150K net, that third piece was not netting program revenue (unless it was a cultivate piece that set up future year’s revenues or had an upgrade component or the like.

What this nets out to is that in a donorcentric future (or, at least, in my donorcentric vision of the future), people will ask how many control pieces you send and you will have to say that it depends greatly on the donors themselves (or give a range like somewhere between two and 30 pieces per person).

And, of course, that each of these pieces is customized and crafted to appeal to that particular donor or segment.  That, in my mind, is listening to the donors and not trying to let a Platonic ideal donor get in the way of each precious unique donor snowflake.


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Quantity versus quality of pieces in donorcentric fundraising

2 thoughts on “Quantity versus quality of pieces in donorcentric fundraising

  1. Nick,

    I enjoyed the Summit and debate, well done in cleverly and entertainingly serving up some of the important sentiments that exist around this topic. I continue to be struck that volume has become the defining trait for ‘donor-centric’, though I understand why, while also arguing it kind of misses the point. Not that volume isn’t a problem – it is a horribly flawed model that is playing out for every large charity of note. Massive diminishing returns and no answer to solve it other than send more, which merely shifts total dollars (to your point about needing to demonstrate not just net rev raised per piece but that absent it, $ would have been left on table).

    The Union of Concerned Scientists prove (if only to be a black swan at the moment) that people will shift their giving behavior to be comparable with past giving over fewer asks. In their case, a 65% reduction in asking resulted in almost the same total rev and more net. Importantly, they advertised this change to folks at the beginning of the year-long test to sensitive people to the new reality and speed up the behavior shift. By comparison, we know of another charity that did a two year test, 50% reduction in asking but with no communication about the new reality. End of year one was a push and end of year two saw 20% increase in net.

    In short, most (or at least many) give in spite of fundraising, not because of it. The yet to be demonstrated but soon to come “other shoe” in the UCS example is the expected increase in retention – not by sending out more appeals (which is always the “answer”) – but because they are less irritated and hence, stick around longer.

    Food for the Poor is nowhere close to optimum with 27 appeals. Even if they were raising money from robots there is massive waste by not modeling out the reality that exists – different “demand” curves with some folks only warranting a small fraction of the 27 and others in-between.

    The relevance line is, in my view, a red herring and built in excuse to keep doing what one is doing and if possible, increase it. Nobody is arguing for sending out irrelevant so why make the obvious point that it be relevant? Who makes that judgement? It is always an internal one with justification being we sent 3 more appeals and each netted money and therefore, they are all relevant. If all you have is a hammer, everything looks like a nail. There was a seminal study done analyzing the language and style and structure of fundraising copy relative to other bodies of work (e.g. academic) and it was an indictment nobody read – fundraising copy reads more like an academic abstract than personal, emotional narrative. Everyone thinks their copy is ‘relevant’ because it is a personal, emotional narrative that puts the donor in the center, uses the proper pronouns, etc… Everyone also thinks they live at Lake Wobegon. Most of it is crap and even if it weren’t, nobody at Food for the Poor is likely arguing for sending out 54 appeals. Why not? They are all, by their accounting, relevant? What line in the sand exists that says 27 is ok but 54 is crazy talk? Chances are good that if you factor in e-appeals they are way over 54 for the year already.

    Why do donors give to you and why do they stop? Build a business around satisfying those identities and motivations and smoothing out the mental pain and effort with crappy experiences and you’ve got a new business model, one not defined by volume and one that is the very essence of customer centric – we understand your needs and preferences and meet those to raise money. The “ask” deserves very little credit in actually raising money (16% by our attribution models) and more of the blame for current world order.

    By defining donor-centric as fixing the mess we created it really misses the point, even though volume is horribly broken as a model.

    Liked by 1 person

  2. I hope people read the comments on this one, because this comment may be better than the actual post.

    In retrospect, I wish I’d led with

    “What this nets out to is that in a donorcentric future (or, at least, in my donorcentric vision of the future), people will ask how many control pieces you send and you will have to say that it depends greatly on the donors themselves (or give a range like somewhere between two and 30 pieces per person).”

    Because your comment that the goal is to determine and satisfy the different demand curves that exist is right on. In the small groups at DMA, we had an interesting discussion as to whether donorcentrism is about working to build a relationship with every donor or if it is about working to build a relationship with every donor who wants one? It’s a subtle, but important, distinction. Put another way, is there a Platonic ideal program that we should be striving for? Or is the notion of a here’s-a-mail-piece-and-here’s-another-mail-piece program outdated and we should be striving to customize to each donor’s (profitable) desires? I tend to fall into the latter camp.

    So a thought experiment on this: if there were a group of donors that wanted to hear from an organization (by deed and by word — that is, they appeared like they would be profitable and they actually said they want it) weekly, would it make sense to do that? I would say yes. I also know that this lives squarely in the realm of a thought experiment as there are few that would say that.

    So I think quantity, and rereading, I didn’t get this across as I would have liked, is as you say both important and a red herring. Important in that there has to be a default — if you know nothing else about a person, what communications are they going to get? Important because people usually test this default number up and not down. But a red herring in that if we have depressing reasons for lapsing reasons for lapsing like “I don’t recall supporting X” or “I didn’t get thanked,” bad communications are still bad communications, whether there are one or ten or 100.

    The reason I held Food for the Poor up as a better example of donorcentrism than most is that they do a good job of tactics that touch hearts. Their ED calls people to thank them and to pray with them. They have institutionalized communications that talk about the specific reason why someone gives and how they’ve made an impact. So I think they are a cut above.

    What I’d advocate at first, because cutting pieces is scary and we don’t have full results from UCS yet, is the steps above around simple analyses to better exclude people from communications. We’ve tested up for so long — let’s start by cutting the pieces that we know will be unprofitable and not add to a donor’s experience. Let’s also test our defaults — both up and down on quantity. Because we aren’t at Lake Wobegon. We are at a place we probably arrived at by accident or by testing one piece at a time rather than one cadence at a time. So let’s leave in the most scientific way.

    I’ve seen organizations test up from eight to 12 mail pieces over the period of years. I’m currently seeing one where the road out is almost certainly down. It depends on the organization and the donor.

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