Lautman | Maska | Neill & Company

A Cautionary Tale on Giving too Much Information
While developing an appeal, there is understandably a desire to tell donors everything your organization does. However, in telling them about everything, it's easy to lose sight of why donors began supporting your cause – potentially turning away donors, and raising less revenue.

We saw this firsthand in a messaging test we conducted for one of our Meals-on-Wheels Service providers. Like many senior nutrition programs, this organization does more than just deliver lifesaving meals to homebound elderly; they also provide services like medical transportation and minor home repair. The group wanted their donors, most of whom were acquired on a meal delivery message, to know about all the great work they do.

For this "meals-only vs full program" messaging test, relatively small changes were made to the package:

The outer envelope of the control had both the organization's name and "Meals-on-Wheels Program" on the front, while the test only had the organization's name (in other words, no mention of Meals-on-Wheels).
The ask in the letter was revised from "Today, I ask for your continued support to help provide lifesaving food and friendship" to "Today, I ask for your continued support to help provide lifesaving food, friendship and other critical services." An extra paragraph was added to the second page of the test letter, listing the other programs the donor's gift helps support.
The "yes" copy on the test's reply form included the phrase "… and other critical services" instead of just referencing meals. The reply form for this package also used a coupon-style reply as an involvement device. In the control, all of the coupons were related to food (ex. $36 helps provide six nutritious meals to a homebound elder). However, for the test, two of the four coupons were altered to reference other programs, such as home repair or medical transportation.

And while the changes to the package were minor, the impact they had on revenue was not.

The test package – which described both meals and other critical services – generated a 22% lower response rate than the control. In addition, the average gift of the test was 19% lower than the control. As a result the test message raised 35% less revenue than the control!

The moral of the story – tread lightly when venturing away from the primary message your donors were acquired on. They have already shown you what motivates them to give, asking them to support something different can have major consequences.

Being Honest with Our Donors About the Business of Changing the World
The press has not been kind lately to the direct response fundraising industry. There have been numerous investigative reports and articles on the cost of fundraising, and the – sometimes high – percentage of a donor's contribution that is used for overhead expenses such as outside fundraising expertise.

And, some of the bad press is deserved. Some relationships between non-profits and the fundraisers who help them involve unethical practices: consultants and service providers who control the gifts sent to a non-profit (instead of the gifts being deposited by the non-profit), consultants who "own" the list of donors to a non-profit, or consultants who do not get the non-profit's input in their fundraising campaigns. As a founding member of the Association of Direct Response Fundraising Counsel, we fight these practices and aim for an ethical industry that keeps the best interests of the non-profit, and the donor, at the forefront.

But, we are troubled by the tenor of the recent press that implies that it is somehow wrong for a non-profit to invest money to raise money – that the "business" of non-profits is somehow dirty or inherently unethical.

We think it is imperative to reframe the discussion.

First, we must accept that it's going to cost money – a lot of money – to change the world. You can't provide shelter for the homeless, food to those who are hungry or preserve the environment for free.

Second, you have to spend money to hire talented professionals who are able to change the world. There are brilliant, passionate people who are attracted to non-profit work. A competitive salary, and benefits, are necessary to get those people to manage the non-profits as staff – not just govern them on Boards.

Third, we need individual donors – and lots of them – to change the world. Grants from local and national government agencies and foundations will not provide enough resources. We need to connect passionate people with causes they believe in to have enough donors to raise the necessary money.

Fourth, you have to spend money to find and keep those donors. People are smart – truly – and we think they would understand this if we were willing to talk openly and honestly about fundraising costs. After all, they understand that advertising isn't free. We need to be honest about the fact that it costs money – and in fact requires an investment – to acquire a new donor, and profit comes over time. Donors need to understand that they are truly investing – and their investment will pay off tremendously.

We have talked before about getting the conversation away from "cost effectiveness" and into "change effectiveness" and it is essential that this conversation begin soon. Non-profits need to start to promote their effectiveness long term – and not pretend that it was "free" to bring about that change.

It is imperative that we all create a respectful fundraising environment – in which consultants and outside service providers are contracted ethically, in which you are honest with donors about the fact that you are spending money and that it is being spent wisely.

The USPS Intelligent Mail barcode (IMb): It's Coming to a Mail Piece Near You!
Surely by now you've heard of, and seen, the IMb on your mail pieces. Introduced more than four years ago as the 4-state barcode, the IMb combines the capabilities of both the POSTNET™ and PLANET Code^® barcodes into one unique barcode.

The IMb is used by the USPS as your mail travels through the system and USPS equipment. It's intended to provide more information and greater functionality than the soon-to-be-retired Postnet barcode, such as tracking mail delivery and address correction services. Previously, such services could only be obtained by adding a second barcode on mail pieces called PLANET Code^®. Now with the IMb, all services are incorporated into this one barcode.

After four years and myriad delays from its original implementation in 2009, it's happening. It's really, really happening.

What does this mean for you?

First, to continue receiving automation discount postage rates, the USPS is requiring mailers to use the IMb as of January 28, 2013! This "new" barcode must be on both mail you send and mail you receive via the return envelope in mailings, in order to receive a postage discount. This discount is at least $.05 per piece – and that really adds up!

Second, updating your data with National Change of Address Service (NCOA) is going to be even more critical. The IMb is going to make it clear to the USPS whether you are actually updating your addresses every 95 days as required. If you do not, the USPS can elect to charge you more postage or pull your mail permit altogether.

If you're a mailer and currently receive discount postage rates, make sure you're ready NOW! You don't want to throw money out the window by neglecting to make this one simple change.

Ask the LMNC Expert!
Dear LMN"X"pert:

We are starting to acquire new donors through the mail and have been told we must make our list of donors available for exchange. Is that true? And if so, how do we protect our donors?

Signed,
Protective

Dear Protective:

In this day and age it's almost impossible to acquire new donors cost effectively without exchanging your list. A good list costs $85 to $120 for every 1,000 names. If you get names on exchange it's only $12 for 1,000 names. So your lists costs will be thousands of dollars lower if you make your list available for exchange.

But there are other really good reasons to exchange:

1. Many of the best lists are available only if you exchange. So if you don't exchange, you'll never have access to those names.

2. Contrary to popular belief, organizations that exchange their donor names (with discretion) experience better performance from their donor files than organizations that do not.

3. Your donors are likely receiving other direct mail regardless. If your donors are giving to your organization through the mail, they're probably giving to other groups anyway.

If you do make your list available for exchange, follow the golden rule: treat others the way you would like to be treated – both other organizations and your donors.

What do I mean?

When it comes to which donors you plan to exchange, groups generally do not exchange donors who have made a gift of more than $100 in any of the past three years. But, don't think you can get away with giving out your low-dollar, lapsed donors. Such a list will perform as poorly for other groups as it does for you – and soon other organizations will be unwilling to exchange with you at all.

Respect your donors' preferences. Before you make your list available for exchange, give all donors the opportunity to "opt out" of having their name exchanged. Include a check box with that option in several appeals throughout the year. And then keep your promise!

As you learned in kindergarten – share and share alike – and reap the acquisition benefits.

Signed,
The LM"X"pert.

Have a question for the LMN"X"pert? E-mail us today at info@lautmandc.com – and get the expert answers and advice you need from the Lautman team!

Lautman Gives Back Featuring Meg Brackett and Vicki Viera
On October 27th, Meg Brackett and Vicki Viera participated in the Alzheimer's Association Walk to End Alzheimer's™. Meg walked in memory of her late grandfather, Marlin Adams, and Vicki walked in memory of her late grandmother, Lydia Alvarez.

This walk is the nation's largest event to raise awareness and funds for Alzheimer's care, support and research. Held annually in more than 600 communities nationwide, this inspiring event calls on participants of all ages and abilities to reclaim the future for millions in the hope of ending Alzheimer's disease, the nation's sixth-leading cause of death.

We are proud to announce that Meg and Vicki, along with their team members, contributed over $2,300 to this year's event and the entire walk raised $550,000!