Net Revenue Available to Program


Here’s a counter-intuitive truth to tuck away:

As a nonprofit’s donor file shrinks, their response rates for direct mail and email will tend to increase.

Wait, you might say… if a nonprofit is losing donors every year, why would their response rates be going up?

Response rates go up as an organization’s donor file is shrinking because the first donors to leave are the donors who are least engaged.  This means that the remaining donors are more engaged – and are more likely to respond to a piece of fundraising.

I saw this earlier today when I noticed that the year-end letter for one of our customers was sent to 18,000 donors this year, versus 23,000 donors last year. 

I thought to myself, “Well, at least their response rate probably went up.”

Lo and behold, their response rate went from 4.1% to 4.7%.

Their ROI went up, too: from 6.7:1 to 7.1:1

Hooray… right?

Nope.  They raised $20,000 LESS in net revenue.  (Remember, they sent the letter to 5,000 fewer donors.)

This is one of those times when two metrics that matter – ROI and Percent Response – went up.  But the metric that really matters – Net Revenue – went down.

The organization’s Board is happy that their ROI went up.  Weirdly, they are more proud of the increased ROI than they are worried about raising less money. 

Listen, I love to maximize ROI.  Probably more than the next guy.  But what matters most is Net Revenue.

I used to serve a brilliant fundraiser that always used the term “Net Revenue Available to Program.”  He’d never shorten it to “Net Revenue.” 

His insistence on using “Net Revenue Available to Program” was an outward sign of an inward focus that I took to heart: our primary job as Fundraisers is to end the year with as much money as possible to send to the programs in the field. 

Because you can maximize ROI and Response Rate all you want, but Net Revenue is the only thing you can send to the field.

Direct mail and… Kale?


Direct mail is like kale – nobody likes it the first time they try it.

Kale is a tough, leafy vegetable that tastes like a hedge.

But over time, a person can come to see the benefits of eating kale.  You start to appreciate kale.  And with the right prep and dressings, even enjoy it.

Direct mail is a tough, counter-intuitive, expensive way to raise money.

But over time, an organization can come to see the revenue that direct mail brings in and the relationship it builds.  You start to appreciate direct mail.  And with the right approach and understanding, even enjoy it.

Kale will never be as enjoyable as a cheeseburger.  Direct mail will never be as enjoyable as a great conversation with a major donor, or the emotional high of a beneficiary’s story at an event.

You might not like direct mail or kale.  But both of them are still good for you.

Practice On Your Non-Donors


Want to become a more effective Fundraiser but your organization won’t allow you to send out enough fundraising to really improve your craft?

Practice on your non-donors.

Get permission to send more fundraising to the non-donors on your email list.

After all, you have nothing to lose with those folks, right? And the purpose of your email list is for members of the list to be turned into donors, right?

If people in your organization question you, focus their attention on how the organization has said that you need more new donors, and that’s exactly what you are trying to do.

The side benefit is that you and your organization will be more effective fundraisers because of it.

If your CRM setup means you don’t know which of the email addresses on your list are donors or non-donors, you have an extra step to take. Create an email list for your test sends, and from that list remove any addresses that look like they might be for your major donors, board members, staff and foundations.

Then start to try stuff. Send an e-appeal that tries a new approach. Try sending a “breathless dispatch from the front line” instead of the “standard sanitized perfectly-proofed update.” Send two e-appeals in a week. Send out a survey designed to get legacy giving leads.

It might be a bit messy. But it’s all practice that will make you more effective.

Organizations that want to get more effective at Fundraising allow little “messes” like these in order to learn and grow. As I said last week, “Ship your work. Get feedback. Improve it. Repeat.”

If you’re not regularly practicing, chances are you’re not getting more effective.

Want to See Expertise in Action – and Steal Ideas for Your Organization?

Direct mail fundraising.

The following is a guest post from John Lepp of Agents of Good in Toronto.

It’s a tour (de force) through a successful direct mail package. John calls out 26 different ideas that you can use for your organization’s direct mail appeals. (Many can be used for e-appeals as well.)

John and his business partner, Jen Love, know their stuff. This is well worth your time!

The summer (in North America anyhow) tends to be a quiet time for sending out mail appeals.

They can be a little hit or miss.

Late this spring, we were working on a June mailing for STEGH Foundation (who I wrote about this past January and their YE appeal).

And like the mailings before it, we applaud Amanda Campbell and the whole team at STEGH for going the extra mile for their appeals and their donors.

I worked with Rachel Zant on this appeal and we wanted to share the 26 ideas that you can steal right now to make your next appeal more successful.

I’ll go first!

Outer Envelope

  1. Was a 9”x6” envelope. Testing tells us that almost anything other than a white #10 will do better in the mail.
  2. It was closed face. It didn’t have a window. Makes it look more like personal mail than using a window.
  3. We asked the letter signer, Jacqueline Bloom, to hand write her name and return address for us and we scanned that in and put it on the outer. No logo, no focus on this PMS colour or this specific font. This makes the outer look more personal from Jacqueline to the donor. Which is the point. Obviously.
  4. We used a personalized mail indicia. Testing has shown us that a commemorative stamp > first class generic stamp > visual indicia > standard indicia > meter postage…
  5. We used an image of lilacs in the indicia. Anyone in southern Ontario would know what that is and instantly be able to smell them since they are everywhere and gorgeous at this time of year. All of these things add up to a highly engaging and ‘openable’ envelope.

All of these things add up to a highly engaging and ‘openable’ envelope.

Next is the letter.

  1. It was designed to look like a personal letter from Jacqueline to me, the donor. Personalized, indented, lots of white space, hardly any ‘design’ and used a large serif font.
  2. Emphasis. Look at what is bolded and underlined. Some donors will only read or look at these things and make a decision to give or not. Make sure everything that you highlight will keep them engaged or move them to give.
  3. We cut off the last paragraph on page one. I know a lot of people who HATE this. Think it’s a mistake. It isn’t. It’s done so the donor will flip the letter over to keep reading.
  4. We also used a helpful “Please turn over…” written by Jacqueline as well.
  5. We included a photo of Jacqueline by her signature so donors could envision who was talking to them in the appeal. Humans give to humans and we are constantly trying to remind donors that they are talking to other humans.
  6. Jacqueline’s signature is very clear. You can see she took the time to write it out cleanly so it is readable. This very small thing does send visual clues to your donor – that you CEO or ED isn’t so important that they don’t have the time to ensure that their name is written cleanly.

The reply form.

  1. It is full size. 8.5” x 11”.
  2. It is personalized for me. The donor.
  3. The gift array was also personalized to my previous giving.
  4. We included an option for giving $198,000 – which is what we needed to raise. Doing this might seem a bit cheeky (and it is) but there have been instances where donors have checked that box or at the very least give a little more than what they tend to since they actually know what you are going to do with their gift.
  5. It has a ton of white space.
  6. If a donor wanted to give online or by phone, we made it easy to figure out how to do that or who to talk to!

Finally, we added a lift note.

  1. Lift notes of almost any type tend to do just that – lift response. Try adding something that rounds out the case or adds a little more detail to the appeal in some way.
  2. We decided to add a photo of the thing we were raising funds for.
  3. We had Jacqueline write out the message, which makes it feel far more personal than just type setting it.
  4. We also included a business reply envelope, postage paid, for the donor to send their gift back in.

Rachel’s perspective and 5 bonus tips:

This letter started off as a bit of a struggle for me, I have to admit. I’d already written a great letter for this appeal – asking donors to fund a new ventilator. It was a slam-dunk, highly emotional, compelling letter about the most basic of all human needs: the need to breathe.

But then we found out the ventilator had already been funded. Back to square one.

We learned the hospital urgently needed to fund a new C-Arm. It didn’t sound all that exciting at first – not after a letter about a new ventilator during COVID. However, our amazing contact, Amanda, hooked me up to an interview with a wonderful hospital staff person who was able to tell me in great detail just how vital this piece of equipment actually was.

The ever-talented John Lepp suggested I imagine the sounds this machine might make (or not be making). And from there, it was pretty easy to start writing.

Here are my top five tips and takeaways:

  1. Start with YOU! You’ll notice I started the first sentence off with a “you”. Sure, the lead would still have been compelling without it – but the “you” draws the reader in to become a part of the scene. The next few sentences set that scene up in vivid detail.
  2. Short and sweet. I purposely started off with short sentences that are easy to read and scan. You want your donor to keep on reading until they get to the ask! You’ll also notice the lift note copy is very short too – just a handwritten note on the back of a photo.
  3. Ask for one thing. The ask is very direct, urgent and for one thing only! It clearly explains the machine and the need, and that’s it.
  4. Tangibility. I did the math and divided the cost of the machine by the number of donors receiving this appeal and it worked out to a nice ‘affordable’ amount for your average person, so that became our first ask amount. I’ve used this approach in other letters and it’s worked out well.
  5. Be consistent. The “Yes-line” or CTA on the reply form reiterates the ask in the letter. It’s not the same generic line used in every single reply form sent out. All the pieces in this package are related to the same subject.

We decided to share this appeal since on the surface, it’s one of those not too sexy, a bit boring and standard appeals you all should be doing but don’t take the time to since you are in a rush to get to whatever is next in your schedule or focusing on the shiny other thing someone in the office is waving around.

This appeal only dropped a few weeks ago but is performing very well and strangely, is reactivating some long lapsed donors at a surprising rate. (Donors who haven’t given in 6 to 7 years are responding at 4.2%!!!!)

If you want to talk about this appeal more or how we can make your appeals stronger this fall, please reach out anytime to chat!

John has a book coming out soon (which I will absolutely be reading). Sign up for their newsletter on their website if you’d like to hear when it releases!

Super Simple Segmentation

Super Simple Segmentation

Most likely you can save a lot of money by “mailing smarter” – mailing your appeals and newsletters only to the people who are most likely to respond.

Put another way: a lot of nonprofits waste a lot of money by sending their appeals and newsletters to people in their database who are unlikely to respond.

Donor Segmentation

The idea of ‘donor segmentation’ is pretty simple at heart: separating your donors into groups and treating different groups differently.

Most smaller nonprofits basically “mail everybody” in hopes of raising more money and acquiring new donors. But in my experience, they almost always waste money by doing this, and have a smaller impact as an organization because of it.

Why? Because there are people in your database to whom you should not be mailing, because it’s a waste of money.

My Default Segmentations Settings

What follows is my “default mailing segmentation settings” – what I recommend most nonprofits do for appeals and newsletters.

Donor segmentation can get super-complex, but I’m keeping this purposefully simple. (In other words; for you Nerds out there using sophisticated RFM segmentation and ongoing testing results to refine your mailing selects, this is not for you.)

For almost all printed appeals and newsletters:

Each mailing should go to all donors who have given a gift in the last 18 months. This is commonly abbreviated, “all donors 0-18.”

However, if you mail your donors less than 4 times a year, each mailing should go to all donors who have given a gift in the last 20 months.

“But What About Non-Donors?”

I can hear people asking already, “But what about all the non-donors, names and volunteers on our database? We have to mail them!”

No, you don’t.

Or more precisely, No, you shouldn’t. You almost always lose money sending a regular appeal or newsletter to non-donors: the returns don’t justify the expense.

I’ll talk more about what you should do for non-donors, down below. But for now, let’s talk year-end…

Donor Segmentation at Year-End

At the end of the calendar year more donors are more likely to give gifts than at any other time.

So it makes sense to mail your year-end appeal to more of the people on your database.

Note: this could be your “Christmas” or “Year-end” or “Holiday” appeal – whatever your biggest appeal at the end of the year is.

Here are my default settings:

  • All donors giving in the past 0-24 months
  • All donors $500+ farther back, 25-36 months
  • All donors $1,000+ from 37 to 48 months
  • Additionally, year-end is basically the only time I regularly counsel smaller nonprofits to mail to the “non-donors” or “names” from their database. But even then, I’d only mail to people who were added in the last 24 months.

To Acquire New Donors

Instead of “mail everything to everybody,” here’s a better strategy to turn those “names” on your database into donors:

  • Mail them only a couple times a year
  • If they have been in your database for two years and never donated, stop mailing them
  • The only “normal” appeal you should send them is your Holiday/Christmas/Year-end appeal
  • Send them an appeal specifically designed to acquire new donors. That appeal should:
    • Directly ask them to make their first donation.
    • Ask them to support one specific, compelling part of your organization. Don’t ask them to “become a supporter” or “partner with us as we…” Here’s why this approach works better in test after test: it’s easier for a non-donor to understand one powerful part of your organization than it is for them to understand the whole of your organization.
    • Pro tip: if this mailing works, you can use it every year without changing it!
  • Never send newsletters to non-donors

Follow this advice and you will likely save a lot of money that you’ve been wasting by paying printing and postage to send letters & newsletters to people who won’t respond.

And you’ll turn more of your “names” into donors by sending them targeted mailings.

So you’ve just increased your Net Revenue quite a bit: you’ve saved money, and you’ve acquired more new donors.

Resources for You

We just released our brand new eBook to help nonprofits get better at Asking. It’s free, go download it.

Our previous eBook, Storytelling For Action, is also a free download. It has the helpful “Story Type Matrix” that shows the research-based guidelines for what types of stories you should tell, and when you should tell them.

Proven way to “Repeat” — send a follow-up mailing to raise 1/3 more

Repeat mailing letters.

There’s a simple way for small nonprofits to increase revenue by 1/3 for most of their campaigns.

There aren’t that many “tricks” that nonprofits can use to raise more money immediately. But this is one of them.

Repeat Your Message in a Follow-up Mailing

Here’s what to do almost any time you have a mailing going out with a time-sensitive deadline: send a follow-up mailing, with the exact same main message as the initial mailing, a couple of weeks after your initial mailing.

A “follow-up mailing” is a proven tactic that large nonprofits have used for 60 years. And a few years ago I noticed something when our smaller clients added follow-up mailings…

The Benefits of a Follow-up Mailing

  • The follow-up mailing will raise about 1/3 what the initial mailing raises.
  • Sending a follow-up mailing will not materially reduce the amount of money the initial mailing raises.

So by sending a follow-up mailing you’ve increased your revenue by 1/3.

And that 1/3 is new money. Additional revenue. It’s from donors who otherwise wouldn’t have given to the campaign.

An Example

Say you have a Back-to-School campaign every August. And you normally mail your letter around August 7th.

Here’s what I’d do. Send your Back-to-School letter earlier, around July 25th. Then send a follow-up mailing on August 9th.

The follow-up letter should have exactly the same main message as your first letter. Repeat the same phrases and the exact same call to action. Just make it a little shorter, and mention the deadline for response a couple times more than you did in your first letter.

The second letter will raise about one third of what your first letter raises. And your initial letter will raise about the same amount that it always does.

Why This Works

There are two reasons this works:

  1. Not every donor received your message the first time you sent it. Some were on vacation, some didn’t open the mail, etc.
  2. Not every donor who received your initial mailing was convinced that it was important enough to respond to. Have you ever had to repeat something to someone who wasn’t really paying attention the first time? It’s the same thing here. Donors are generous, compassionate, busy people who aren’t always paying attention.

The Cost Is Clear

It’s pretty easy to figure out if you should add a follow-up mailing.

Say your Back-to-School appeal letter raises about $20,000 and costs $2,500 to mail.

You can assume your follow-up appeal will raise about $6,500 on costs of about $2,500. You’ve just created an extra $4,000 in revenue you can use for your Back-to-School campaign.

Usually, the only reasons not to do a follow-up mailing are if:

  • The cost of the follow-up appeal doesn’t cover the increased expense.
  • There’s something else you could be saying to your donors during that period that would raise more than the follow-up appeal would raise.

No Negative Effects

There are basically no negative effects to doing a follow-up mailing.

Your donors won’t unsubscribe or complain from too much mail. You won’t drive them away. They won’t give less later.

And if you’re worried about the follow-up letter bothering some donors, put a line in the letter that says, “I’m sorry if you sent in a Back-to-School gift and our letters have crossed in the mail. But I’m writing today because it is so important that the kids walk into school their first morning with everything they need to succeed…”

This Tactic Works

It works in the mail, in email, on social media, on the phone.

It works because not all of your donors got your message the first time. And not all of the donors who got the message the first time were convinced that it was important enough to respond.

I know I’m repeating myself from above, but it’s that important.

Repetition works, people!

There Needs to Be a Need

If your organization has ever written the following sentences, this post is for you. These are all real sentences from real appeals and e-appeals.

  • “Will you please consider sending in a gift today?”
  • “Will you help us do more of this good work?”
  • “Please partner with us by…”
  • “Become a supporter and…”

Most nonprofits don’t realize they Ask this way

When I work with nonprofits who ask for donations using phrases like the ones above, I ask them about it. Specifically, I ask, “Why did you phrase it this way? Why did you not ask for a donation, but instead you asked for something else?”

They usually respond and say, “What do you mean? We asked for money!”

Then I walk them through their fundraising materials and say something like, “The words you used did not ask for money.” Using the four real-life examples above, the organizations asked their donors for:

  • Consideration
  • To help the organization
  • To partner with the organization
  • To support the organization

It’s astonishing how many appeal letters I review that don’t clearly ask the donor to send in a gift. (That’s doubly-astonishing when the one job of an appeal letter is to appeal for funds!)

Most Nonprofits write this way because they are scared about asking for money

Fundraisers – and often the Executive Director – are afraid that boldly asking for a gift will “turn people off” or “make us look desperate” or “make us look like we don’t manage money well.”

Let me be blunt: those fears are unfounded. When organizations make bold Asks to send in a gift today they raise more money and keep their donors for longer.

There’s a reason pro fundraisers write appeals that say things like, “Please, while you’re holding this letter, take out your checkbook and send in a gift today. You’ll love helping a person…” It’s because it works so much better.

More on this below, but most donors are moving fast. They aren’t taking the time to think about whether your organization is desperate, or whether you manage money well or not.

Most of your donors are just wondering if someone or some thing they care about is in danger, and if their help is needed. And if the donor’s help is needed, they assume you’ll ask them directly.

Because if you say things like “please support our mission…” or “will you please partner with us today…” – does that sound like there’s an urgent need and that the donor’s gift will address it? No. It doesn’t. Sounds like things are probably going just fine. And when things sound like they are going fine, fewer donors give.

Donors Love Directness

Remember, most of your donors are looking at your fundraising appeals while they are doing other things; getting ready for dinner, processing their mail, etc. They are moving FAST, and they usually only give your letter or email a few seconds of attention.

Note: this can absolutely be different when you are talking to your Board, or some major donors who have deep relationships with your organization. But usually those people make up less than 5% of the people who will be reading (whoops, I mean scanning) your fundraising materials. This is why you should either be a) writing to the 95% instead of to the 5%, or b) segmenting your mailings.

Ask any pro fundraiser who has a lot of experience with fundraising to thousands and millions of people at a time: your ability to make it easy for your reader to know exactly what you want them to do, and know what their gift will do, is incredibly important.

You tend to get more of what you ask for. If you ask for ‘consideration,’ you’ll get more of it. If you ask for ‘support,’ you’ll get more of it (but who knows what their support will look like). And if you ask for a gift today, you’ll get more gifts today.

Don’t Accidentally Hide The Need

By not asking boldly and directly, many nonprofits accidentally hide the need from their donors.

Their donors continue to get letters and emails that never directly ask for money. After a while, the donors think that the organization must not need the money that much!

True story: after Better Fundraising starts working with organizations, many of them receive the following comment with the first big influx of gifts: “I had no idea you needed more money and that more people needed help. I’m happy to help!!” Their note is usually accompanied by a larger than normal gift.

That’s because there’s some other nonprofit that’s currently asking your donors for gifts. It’s happening in the mailbox of your donors today. So I urge you to Ask with boldness and directness for your donors to send you gifts! You’ll raise more money, you’ll present a truer picture of the need your organization exists to meet, and your donors will love your clarity and directness!