Direct mail is unlikely to be worth much effort.
Direct mail is less effective than ever. The reasons are well known. Your nonprofit is likely to starve if it depends on direct mail. It is unusual for major donors to respond to direct mail.
People are looking harder at their charitable budget and cutting where they can. It is easy to cut a charity if you have a limited relationship with them and give a small amount. When the gift is small, it seems harmless to eliminate it. If every small donor thinks that way, it hurts. Many small donors are thinking that way. In addition, when the relationship is shallow, there is minimal, if any, emotional relationship. If you have neither an economic tie nor an emotional tie, it is hard to sustain the relationship.
If you talk to the small donors, they often feel like they are giving to a nonprofit rather than a cause or someone in need. I realize that your mission is cause related and you serve those in need. Your reality is different from their perception.
At the same time, their cause or need related giving is unlikely to change unless they lose their jobs. Even if unemployment rises to 10%, most of us (90%) will still be working. However, the projection is that donations will be down 15% this year (about twice the current unemployment rate). Some agencies are experiencing a bigger loss. The weaker the emotional connection is the larger the loss in donors and funds. Remember, their cause related giving is separate from their small gift to your nonprofit.
The small minimally engaged donors are the ones you will lose if you eliminate direct mail (letters and email). At the same time, they are eliminating themselves. Is this a preventable loss? If so, is it worth preventing?
If everyone in your donor list who usually gives less $100 gives nothing this year, how much income will be lost? How hard will it be to replace the loss?
Deciding on the impact of loosing those donors is important. If you have 450 donors who give an average of $65 each via direct mail, you have $29,250 at risk. If your budget is $725, 000, the maximum loss is about 4%.
If an important percentage of the annual budget depends on direct mail and the small donors, you need a plan. Otherwise, someone else’s direct mail panic is distracting you.
There must be an alternative.
Assuming one will experience a 15% drop in donations means that one should spend their effort cultivating the retainable donors. If a sizable number are retainable through direct mail, then it will be important to do the direct mail. Otherwise, that same effort will be more beneficially spent on donor cultivation.
The goal of the donor cultivation should be a 15% increase from the retained donors. Previous articles talk about how to cultivate the donor base. Cultivation is a person-to-person process. Cultivation tightens the connection between the donor and the mission.
We work with churches as well as traditional nonprofits. Churches exemplify both parts of this article. Some churches are struggling. Some churches are prospering. Knowing why some succeed when another church of the same denomination is struggling is important.
In both cases, the members know the church and its mission. However, in the struggling church very few of the members feel connected to the mission. It is abstract and impersonal.
When it is personal, they are involved. They see the number of people served rather than read the statistic in a weekly report. They experience the increase in service requests. They understand the need at a personal and practical level. They care about the service recipients because they know them. They give because they understand what the gift will do. They also recruit others to serve or be service recipients.
Some of the recruits are members and others are non-members. The members become more personally involved and the cycle continues. The non-members sometimes become members and the cycle continues. Some of the non-members remain non-member supporters. The non-member supporters create a stronger connection to the community. Their support creates a broad and sustainable cause related donor base.
It is easy to see why and how the church with the outward focus prospers and is sustainable. There are local nonprofits that have passionate supporters and are continuing to prosper. They do the same thing as the prospering churches but in a different way.
How are you going to change your fundraising model? Are you going to cultivate a deeper relationship with all of your donors? Are you going to prosper while others struggle? Direct mail is unlikely to create that direct personal interest that makes an organization sustainable.
