Special Report: Nonprofits Expand Direct Response Efforts

As donations start to rise again after a slump in the recession, many nonprofits are bolstering their traditional direct mail appeals with email, DRTV and social media.

In a study released in June, the GivingUSA Foundation reported that overall giving from both individuals and organizations was up slightly last year after the steepest-ever drops in during the two previous years.

“Our revised estimates show that 2008 and 2009 saw the largest drops in giving in more than 40 years,” said Edith H. Falk, chair of the GivingUSA. “Despite the fragile economic recovery, though, Americans continued—and even increased—their support of organizations and causes that matter to them in 2010.”

It’s very rare to have two years in a row where giving’s down, adds Tom Harrison, CEO of nonprofit marketing agency Russ Reid. “I think it’s the only time it’s ever happened. So after two bad years 2010 improved a little. We are hoping 2011 will improve further.”

The recession did lead some nonprofits to cut back on their prospecting efforts. For example, LearningAlly (http://www.learningally.org/), formerly Recording for the Blind & Dyslexic, cut back on its acquisition mails but strengthened its retention efforts.

“The economy has certainly affected overall donations for our organization and the entire nonprofit sector,” says Doug Olson, director, financial development operations at the Princeton, NJ organization. “In terms of direct mail, we are seeing incredible, loyal support from our longtime donors. However, it has been more challenging acquiring new donors during these economically stressful times.”

The organization, which offers learning aids to the blind, dyslexic and others, greatly reduced its mail volume from 1.6 million pieces in fiscal 2010 to 770,000 the next year.

For acquisition, 10 months out of the year Learning Ally now mails a basic package that includes a letter, response device and sometimes such premiums as pocket calendars, book marks or rulers.

“In past years we had a much more robust acquisition program mailing to more than 500,000 people,” Olson says, noting at the organization has gone through a tremendous transformation over the past two years, including a rebranding effort earlier this year.

Going forward, Learning Ally plans to use more segmentation with its direct mail and will start using email to complement its direct mail. This move is seemingly in concert with ongoing trends now.

“The growth appears to be happening digitally,” says Harrison. “You ignore digital at your peril.”

Another medium some nonprofits are trying is direct response television.

“With the [number of] channels available now, we have the ability to test DRTV and have it be [truly direct] and not just a general advertising medium,” says Geoffrey W.Peters, president, Creative Direct Response Group.

Beginning last October, the agency began a test on Dish Network—which reaches about 11% of U.S. homes—for veteran’s charity the Wounded Warrior Project (woundedwarriorproject.org). The test was later rolled out on national TV.

So far, the charity has recruited more than 10,000 new monthly donors via DRTV. Wounded Warrior Project also uses direct mail and online acquisition methods as well as a speaker’s bureau.

But Peters cautions that DRTV may not be useful for all types of charities. “I don’t think it would work for a food bank in Memphis.”

Still other charities are using a combination of mail, DRTV, online and even telemarketing to drive donations.

Operation Smile, which helps children born with cleft palates, began raising money through direct response media in 2004, says Kyla Shawyer, senior vice president, fundraising.

The Norfolk, VA organization sends out acquisition mailings four times a year and one cultivation appeal per month and sometimes more during the holiday season between November and January.

Also in 2004, Operation Smile got into DRTV at the behest of a major donor, who actually financed the organization’s first test of the medium.

Now, Operation Smile runs DRTV spots in both major and secondary US markets, she says.

“Since its inception, our direct response fundraising program has helped to fuel Operation Smile’s significant revenue and database growth,” says Shawyer. “Our donor database has experienced an increase of more than 1000%. Because of the variety of types of donors we have on our file, we have since added some new programs as we refined new segments and audiences. We have continued to grow our acquisition program by about 15% per year.”

This multichannel approach allows us to minimize risk and maximize donor touch points. “Full integration of the online marketing channel with all other direct response channels yields more engaged, higher value donors,” she says.

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