Two Letters at Year-End?

Here’s a question we get asked a lot at Better Fundraising: “should our nonprofit send two letters at year-end?” 

Here’s what we’ve noticed over the years: a second letter between Thanksgiving and Christmas will reliably raise at least 1/3 of what your main letter raises.

So here’s an easy way to figure out if your nonprofit should send a second letter:

• Figure out how much gross revenue your first letter raises in a normal year.
• If 1/3 of your first letter’s gross revenue would more than pay to print and mail an additional letter, send an additional letter.

Let me give you a couple of examples and then give you one more helpful idea.

Say your primary letter raises $30,000 gross, and costs $5,000 to print and send.  Then I would send a second letter.  That’s because a second letter will reliably raise at least $10,000 gross (which is 1/3 of $30,000), and with a cost of only $5,000 you’ve raised an additional $5,000 in net revenue.

Important note: in addition to the extra revenue, you’ve also gotten gifts from all the people who donate to the second letter.  Statistically speaking, this increases the likelihood those donors will give to you again next year.

But if your primary letter raises $15,000 gross and it costs $5,000 to print and send, I would not send a second letter.  Reasoning; 1/3 of $15,000 is $5,000, so you’re raising an additional $5,000 gross with expenses of $5,000.  You’re only breaking even.  Instead of sending a second letter, I’d spend the time and budget on something with a higher ROI.

The Fear

When I’m walking a nonprofit through this exercise, and they see that sending a second letter will make sense for them, we then run into what is often the real barrier: even if the second letter is projected to make money, the nonprofit fears there will be some un-named and unknown negative consequence to asking again.

Getting past the fear of sending a second letter is a very real part of helping a nonprofit increase how much money they raise at year-end.

Here’s what I tell people: the negative consequences they fear do not come to pass:

• There’s a fear that the “threshold for donor fatigue” will be reached by sending a second letter, and even though more money is raised this year fundraising for next year will go down.  Doesn’t happen.
• There’s fear that a significant number of major donors will react negatively to a second letter, and reduce their giving next year (or leave entirely).  Doesn’t happen.
• There’s fear that the second letter will “steal revenue” from the first letter.  This does happen, but in such small amounts that it basically doesn’t matter.  To give you a sense of scale: a second letter might “steal” $2,000 in revenue from a first letter, but raise an additional $10,000 in new revenue.  So yes, the first letter raised $2,000 less.  But you have $8,000 more in total net revenue to use to make the world a better place.

Every larger nonprofit I know sends at least two direct mail letters between Thanksgiving and Christmas.  Many send three.  It’s a tactic that works.

And now you know how to come to a first draft conclusion for whether it makes sense for your organization.

My suggestion: do the math, figure out whether it pencils out, and if it’s even close I would “assume abundance” and send it!