Lautman | Maska | Neill & Company

Using the New IRS Form 990 to Tell Your Story to Donors and Prospects
The IRS Form 990 — the tax return completed by most not-for-profit organizations — has been redesigned for the first time in 30 years. This entirely new 990 will be used for all years starting January 1, 2008, or later. As a direct marketing professional or other fundraiser at your organization, this is the year to ask to participate in completing the 990.

Why should you as a fundraiser get involved with a tax return? First and foremost, with the advent of websites like Guidestar.com, your donors and potential donors are reading your 990 to find out about your organization. The new 990 Form enables you to market to these people in a way you never have before.

Part III of the new Form — appearing prominently on the second page — is an opportunity for you to talk to donors and prospective donors in language that mirrors what is used in your fundraising materials.

Line 1 of Part III asks you to “briefly describe the organization’s mission.” You can use these lines to talk about your mission in the same language used in acquisition mailings.

Then, in Line 4 of Part III, you are instructed to “describe the exempt purpose achievements for each of the organization’s three largest program services by expense.” Here, you can detail your activities for your donors — using language that demonstrates the full impact of your work.

In addition to the marketing opportunities provided in Part III of the 990 itself, all organizations who receive more than $15,000 from fundraising events, or spend more than $15,000 on fundraising activities, will be required to complete the new Schedule G. You will need to list the fees paid to fundraising counsel in this Schedule. You should work with your finance departments and accountants to make sure the section is accurate.

There are many questions in the new Form that do not pertain directly to a nonprofit’s finances. For example, the Form asks whether your organization has a conflict of interest policy and the number of volunteer hours logged for your group. We encourage you to review the Form, Schedules and instructions now (available online at http://www.irs.gov/pub/irs-pdf/f990.pdf, http://www.irs.gov/pub/irs-pdf/f5500sg.pdf and http://www.irs.gov/charities/article/0,,id=185561,00.html) and talk within your organization about how these questions will be answered. Always keep in mind donors and prospective donors will be reading them!

Case Study: Using Online Tools to Increase Loyalty
Direct mail is still the most effective way to encourage large numbers of people to donate to a cause and to keep giving. But, increasingly, online tools can give your most passionate and active supporters what they want and need — an outlet for their opinions and a way to communicate with other people like them.

There are many ways to use online tools to create a real community of supporters. Physicians Committee for Responsible Medicine (PCRM), an organization we work with, sends e-appeals often, raising thousands of dollars each time. We have used online petitions which are always successful when fully incorporated into an e-appeal. But, we hadn’t done more than that and wondered how involved the supporters were willing to get.

Therefore, we planned a multifaceted campaign — a direct mail appeal with a poster insert for donors to put in their windows, and a three-part email series to encourage people to show their support.

Part One of the email campaign asked people to post a picture of themselves with their poster on a virtual map on PCRM’s website to show their support for this campaign. The map was simple (and free!) to devise — thanks to Google Maps. The goal of this email was to:

Fire people up about the campaign
Let them have an online presence with PCRM
See others like themselves

We hoped they would feel even more passionate about being a part of this group after taking this particular action.

It worked. As soon as the email went out, people began posting pictures on the map and within a few days the map was covered with flags, showing supporters in almost every state! They even downloaded a campaign widget to help spread the word to friends.

The Internet enabled us to do something that would not have been possible with direct mail - give people a way to participate AND get instant gratification.

What we hope to learn in the future is whether the supporters’ loyalty was increased because of this shared online experience. Stay tuned …

LMN&C Client Spotlight: Gay Men’s Health Crisis
Gay Men’s Health Crisis (GMHC) is America’s oldest and most comprehensive AIDS service organization. In fact, GMHC has been helping men, women and families affected by this terrible disease since its emergence almost 27 years ago. Lautman Maska Neill & Company has proudly partnered with GMHC since 1995.

GMHC provides a warm, welcoming community for those living with and affected by HIV/AIDS. People can receive hot, nutritious meals in GMHC’s on-site dining room as well as nutrition counseling, therapy and wellness services and legal assistance on housing, discrimination and custody issues. GMHC also helps the larger community by providing HIV testing, assessment and referrals to critically needed services in addition to prevention education.

GMHC serves clients in the New York metropolitan area, and helps other AIDS services organizations around the country replicate their successful programs. In addition, GMHC’s Public Policy staff work on the federal, state and local level to advocate for progressive health and human rights programs and policies.

Each year, GMHC serves over 15,000 men and women who come through their doors seeking help and understanding. GMHC has a wonderful staff of dedicated people and thousands of volunteers. GMHC responds to over 100,000 requests on its phone hotline and website every month. They also serve almost 100,000 meals and provide grocery packages through their food pantry program to over 4,000 a year.

Smart Testing in Challenging Times
In difficult economic times, it’s common to want to make radical changes to your direct mail program in an effort to get the money in the door.

And yet, this is one of the worst decisions you could make. It is vital to stick with what you know works to minimize the impact of bad times. Maintain your core messages. Talk about the work that you know your donors support. And continue acquiring new donors on the packages that have brought you high quality donors in the past.

But sticking with what works doesn’t mean that you shouldn’t continue to test. In fact, this is a perfect time to challenge some of the old strategies that worked for your organization in better economic times. Here are some of the tests that we recommend in these challenging times.

Ask String: The requested gift is perhaps the most important part of any direct mail package. It is also the most sensitive to a difficult economy. While we would never recommend intentionally downgrading your donors, maintaining your file size is of primary importance. So if you are finding that your response rate on appeals and renewals is suffering, it may be time to test asking for a bit less.

If the ask amounts on the reply are currently based on the donor’s highest previous contribution, consider testing basing the ask on a person’s most recent gift or the donor’s average gift in the past two years.

Alternatively, consider testing the upgrade in your ask string to make it easier for the donor to say “yes” to. If you currently ask for a 50% increase at each subsequent amount (MRC x 1, MRC x 1.5, MRC x 2), consider lowering that to a 25% increase (MRC x 1, MRC x 1.25, MRC x 2).

Inserts, Freemiums and Brochures: While we marketing folks love a great insert, a clever freemium or a beautiful brochure, these additional package elements sometimes add cost to a package without really helping boost response rates.

If you haven’t done so, this is a great time to try streamlining your packages by testing removing one of these inserts. This can be done in acquisition and appeals. If you find that the package without the insert attracts as many new donors in acquisition or generates the same response rate and gross revenue in appeals, then you can increase your bottom line simply by lowering costs.

Other Money Saving Techniques: The easiest way to make more money is to spend less. So consider other package tests that can lower your cost without weakening your message. If you are using four-color printing in any part of the package, try testing two colors. Can you lower the weight of your reply form or reply envelope stock? These small changes may have no effect on your donors’ giving — but can save you money over the course of the year.

A word of caution — some cost-saving techniques will lower response when they involve altering the messaging in a package. We’re referring, of course, to the length of the letter. Reducing letter length from 4 pages to 2 in acquisition or 2 pages to 1 in appeals may seem like a great way to reduce costs. But remember, reducing letter length means you have less time to tell your donors your story. Donors need to know why their gift is important!

As you would in any economy — remember to use good testing techniques. Think carefully about the change you are trying to effect, and then pick the test that is likely to get you there. Construct your tests so that you will have a statistically valid sample to read.

Good luck — and happy testing!

Breast Cancer Awareness Month
In honor of Breast Cancer Awareness month, Lautman Maska Neill & Company participated in Passionately Pink Day. On October 28th, employees dressed in their finest pink attire and each donated to help this worthy cause. With the help of friends and family, we were able to raise $478.00. A matching gift from Lautman Maska Neill & Company resulted in a contribution of $956.00 to support breast cancer research. Never have we looked so festive!