Do you ever wonder why your organization is doing all the dirty work of direct response fundraising – the briar patch that is direct mail letters and emails and landing pages and coding and tracking response rates?
You might especially be wondering this if you’ve done the math and seen that 80% to 90% of your revenue from individual donors comes in from a tiny percentage of your major donors.
If that’s you, here are four reasons smart nonprofits of all sizes still do this type of fundraising today…
Major Donor Identification System
Sending mail and email – and watching the results carefully – is one of the main ways organizations reliably identify new potential major donors.
That’s because many major donors will begin their relationship with you by making a small gift.
Organizations then use their direct response fundraising program to identify those potential major donors. They set up systems to:
- Notice when gifts above a certain size come in
- Use wealth-screening software (and occasionally good old-fashioned Google research) to determine which of their smaller donors has the capacity to give larger gifts
There are “hidden major donors” on your file right now, today. Are you using the mail and email to find them?
One of the goals of mature nonprofits is to have multiple revenue streams. In other words, they don’t want their lifeblood coming from just events, or just grants, or just major donors, or just earned-revenue.
Because if you have just one main revenue stream, the organization is fragile.
A few months into the pandemic I talked to a national organization that was $15,000,000 (!!) behind their budget for the year. Their fundraising was overwhelmingly based on regular, small events with wealthy donors.
Because they had not developed a direct response fundraising program (they told me they thought fundraising through the mail was “icky”), they did not have a way to stay in relationship with their donors when they couldn’t meet in-person. Unfortunately, they and their beneficiaries suffered because of it.
The more income streams you have, the less fragile you are, and the more prepared you are to fundraise in uncertain times.
Stay In Touch
Most people reading this blog will have major donors that you’re not in relationship with. They make a gift or two every year, but they’ve resisted your attemps to build a personal relationship with them.
And you have people who receive your mail and email… but you’ve never met them.
Your direct response fundraising program is how you build relationship with those donors.
This becomes more important as you grow. If you have 500 donors, you likely know 30%-50% of them. But if you have 5,000 donors, you likely only know 10%-15% of them. That means your direct response fundraising IS the relationship for a large percentage of your donors.
Unless you’re an organization that has a natural source of publicity and a cause that people regularly think about, it’s extremely difficult to grow your donor file without a direct response fundraising program.
And Hey, You Can Raise Real Money!
Many of Better Fundraising’s clients raise the majority of their revenue through the mail and email. Maybe they haven’t spun up a grants department yet, or their major donor program is just getting off the ground.
But they are raising between $4 and $10 for every $1 they spend in the mail.
In addition to the three reasons above, they are raising serious revenue to power their nonprofit or ministry.
The goal with your direct response fundraising program is to establish a system where your organization stays in relationship with donors as you grow… and identifies & cultivates more major donors… and becomes less fragile… and raises money while doing it.
That right there is why savvy organizations are investing in their direct response fundraising programs. And it’s why Better Fundraising loves helping organizations build the systems and repeatable processes that help them be successful in the mail and email.