A heads up: this blog is longer than usual, but definitely worth it to those who read it through to the end! It just might change your professional life.
The math of direct mail is a beautiful thing. I should know; I practiced it and became quite proficient in its science over 35+ years. Mailing out a test quantity, then increasing the quantity to validate, and then finally rolling out is a statistically-driven marvel to behold. Direct mail fundraising in its heyday was highly profitable for organizations that employed it. Many of our largest charities owe their financial foundations to the science and mathematics of direct mail.
I, for one, will miss it when it’s gone, but for now enjoy it while it lasts. And as my friend Bill Jacobs says, optimize and maximize your net revenue even as mail declines, but my suggestion is …
… FOR CRYING OUT LOUD … GET SERIOUS … ABOUT GETTING OUT THERE AND BUILDING A PURE 100% ONLINE FUNDRAISING MODEL.
Of course it won’t replace direct mail’s revenue overnight – which is why it is of critical importance to start now!
I understand all those who say they can’t figure out how to make online work. That’s why we exist at Browne Innovation Group, to guide nonprofit fundraising organizations to a pure 100% online fundraising business model that works and is scalable.
The Internet isn’t just another form of your traditional advertising world; the Internet has its own set of rules and they are NOT just digital forms of what you have been doing in the analogue print-and-ink world.
Too many fundraisers have the “being there” syndrome. They think that if they have the new digital tools, that somehow their online revenue will start to rise. As if the magic of the digital tools just “being there” is enough.
And it’s not completely fundraising leaders’ fault; there are those supposed quasi-research groups that fundraisers look up to that spend time and money tracking the so-called growth of online fundraising, and have been telling you that over the last five years online fundraising is growing.
Sounds good, doesn’t it?
Except it’s pretty much a crock. Well, not a total crock. Some people who have never heard of your organization before are finding your website and donating. But what percentage of your online revenue is coming from people like that? Less than 1%?
You see, what people, real people like you and me are doing is changing our transaction mode.
Instead of writing a check (who writes checks anymore??), real people (your donors) are responding to direct mail appeals but donating online instead of sending you a check in the mail. And THAT is what gets reported as “growth” in online fundraising.
So when these annual research reports come out with fanfare and the authors tell you online giving is up; what they are talking about is where the transaction was made.
So then the question you have to ask yourself is: Is there really a new and viable methodology for developing supporters 100% online that can scale and take the place of direct mail, or are these research reports just talking about “where the transactions are happening?”
And, as I described above, that is a big difference.
If online giving were really rising, as opposed to just the online transactions rising, then the fundraising industry (YOU) would have heard of hundreds of pure online fundraising models.
To be sure, there are a few organizations that raise virtually all their revenue in a pure 100% online model. One example of a pure online model is Charity: Water’s way of communicating online with their supporters who hold fundraisers for Charity: Water’s drinking well projects. All of Charity: Water’s communications begin and continue online … 100%.
There are also crowdfunding sites like Kiva.org, where donor investors like you and I make loans to people in third world countries to purchase a sewing machine, to start a business, or to fund five goats for a farmer to start a goat herd. These are REAL and TRUE examples of the rise in online giving and are generated 100% online.
But these are not what the reports from Target Analytics and other such reports are describing. TA’s report is focused on your fundraising industry sector where the predominant mode of acquiring new supporters is still direct mail. When they make pronouncements that online giving is rising, the takeaway (especially from the general press but also from the fundraising trade press) is that fundraising organizations are shifting their modes and methodologies of fundraising and are acquiring new (and presumably younger) supporters online.
BUT OF COURSE THAT IS NOT WHAT IS HAPPENING AT ALL.
Established nonprofits are now invested in so-called Integrated or Multi-channel marketing. Integrated and Multi-Channel marketing incorporates online and digital touch points, but at base (and this is critical, so pay attention) it is totally dependent on direct mail.
Meaning, if you take direct mail OUT of the mix and just leave the online and digital channels … IT WON’T WORK!
If your mail still works, adding online and digital channels might provide a slight bump in response, but take the direct mail out and the whole campaign collapses. Because, in the end, it is just a direct mail campaign jazzed up with digital tools.
Of course the people in the direct mail industry point and say, “see, direct mail is still viable.” And they have me in their corner saying the same thing.
Except that the subject is growth in online giving.
What happens to Target Analytics’ benchmark report of the growth in online giving when direct mail begins to decline at an even faster pace, which it inevitably will?
Please don’t be fooled. “Get out there” and develop a new online fundraising business model that is 100% online!
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