Donor Acquisition - MN Council of Nonprofits

The Minnesota Council of Nonprofits is holding a monthly brown bag lunch on the topic of fundraising. Friday's session (06.03.05) was facilitated by Debra Ward (Children's Theatre) and focused primarily on the use of List Brokers to create direct mail campaigns targeted at the folks that care most about your organization. Here's the 1,000 foot-level overview of the time together (note: advice is from Debra's experience and not applicable to 100% of the nonprofits out there):

• Step 1: Know who benefits from your services. Think outside of your existing box here and be specific - create profiles for your target audience - fill them in - age, gender, geography, ethnicity, favorite books, activities, other charities they may care about, etc. (my 2 cents: I would even recommend going to someplace like Getty Images and find pictures to go along with them - Rhumbline does this as a part of audience definition for Web projects)
• Remember: The Big Hitters aren't your target in acquisition. Those altruistic folks that have passion and resources to make large gifts are great donors, but establishing a broader base of small-to-mid-level donors ($50+) with gradual growth patterns is the primary goal of the acquisition process.
• Partner with Like-Minded organizations. In Debra's experience in public radio (WCAL for 17 years), her organization traded lists for acquisition purposes with other organizations that had similar profiles. While information security concerns have grown, she indicated that she believes that additional sharing is still an option if your organization has a written privacy policy and opt-out options in place. The benefit is essentially that folks that care about organizations that are similar to your own, may very well care enough to participate.
• Top 10 things to consider/expect when working with lists to acquire new donors (not in priority order, just a compilation of tidbits):
1. You'll lose money for the first year or two of pursuing a formal acquisition campaign (practical example = WCAL spent $25K on their first mailing, recouped $15K) - decide whether or not you're willing to commit.
2. Think long-term - Debra has experienced 80-90% re-up rates for her direct mail donors
3. It's hard work to figure out who to go after - give it time and get help if you need it.
4. In Debra's experience mailhouse was charging 13-16 cents per piece, + bulk rate mailing costs of 16-17 cents.
5. Minimum recommended mailing list is 25,000
6. Don't ask for small donations - Debra recommended minimum of $50
7. Don't use any list for more than 10 years
8. Be happy with a 1% return rate and know that 85% of your mailing will be thrown out, unread.
9. Bulk rate shipping can take up to a month to get distributed and donors that have interest will respond within 2-3 weeks after that
10. Best months for pursuing acquisition: October/November. A close second-place would be March/April. Start with the Fall months for your first campaign...
• Lists that WCAL used with success during her public radio days: New Yorker, Atlantic Monthly, Sierra Club, Minnesota Historical Society, Orchestras, Operas, etc.

Other tidbits and advice gleened during the session:

• The financial risk for this approach is real and may not apply to all organizations.
• Smaller organizations should consider seeking out a Patron willing to cover the costs of an initial campaign
• Renting lists is probably the safest approach for those without experience in this arena
• Seed the lists that you rent to others to make sure they aren't being abused
• Focus on the lifelong value of donors that are acquired, not short-term expenses. Expect the break even to occur during year 2 or 3.
• Once folks donate, be sure to followup with them and establish relationship - invite them in
• Don't assume that if you rent a list of 8000 that you'll be sending to 8000. Duplicates are removed by the mailhouse/broker and will, if your lists are well-aligned, always result in losing some names along the way. This is not a bad thing - if you didn't have any dupes, it would be fair to assume that you may have a profile issue.
• Risk/Reward - you can't afford NOT to stretch out - your donors die - quite literally. The more donors you have, the more prepared you are for economic downturn and turnover.
• Consider working with colleges for statistical analysis - students are often required to do real-world work in stats, so you're offering up a win-win for faculty members that are open to the idea. (Local Mpls. examples include the Hubert Humphrey Institute and St. Thomas)

So there you have it. You missed out on being elbow-to-elbow with 50 of your professional peers, but you have most of the discussion that took place. ;)

Also - MNCN will be conducting two sessions in June and July that they mentioned during the brown bag:

1. Nonprofit 101 - Nuts and bolts of practical management - 06.28.05 @ the University of St Thomas. Covers Fundraising, HR, Legal, Financial Mgmt, Grantwriting, Evaluation, Board Governance, & Communications/Marketing [$50/$80]
2. Corporate Sponsorship - Tapping into new revenue sources - 07.12.05 @ Continuing Education and Conference Center (1890 Buford Ave, St. Paul, MN) [$100/$150]