Case Study

Non-profit introduces educational charity with direct mail

Marketing Challenge

A non-profit organization, which annually solicits charitable donations from its members, introduces a new charity to support children with dyslexia.

Direct Marketing Application

Non-Profit Fundraising

Background

This 325,000-member non-profit fraternal organization conducts fundraising campaigns on a regular basis to support several charities that have been important to its members. These campaigns (which we also handle) have become a tradition for the organization and a core group of member/donors are very supportive of them.

The organization had plans to start a new charity and was looking for the best ways to support this effort. A direct mail fundraising campaign was one of the strategies.

Because of our experience with past campaigns, we were asked to develop a fundraising program for this newly created charity — one that was still unfamiliar to the membership.

What We Recommended

Our first recommendation was to target only the best prospects by mailing only to past donors, realizing that the vast majority of members never respond to donation requests. It was expected that mailing to non-donors — particularly with a new charity—was not going to be productive.

We also recommended that past donors be further segmented by the amount of their donation. This would allow us to “version” our direct mail packages to individuals according to their gift history. In other words, to maximize the donation size, we used different donation forms depending on a donor’s history.

In addition, we recommended creating a full-page direct response ad and insert for the organization’s magazine. This would allow us to reach the entire membership without incurring the substantial cost of mailing to the large number of non-donor members.

As for creative, we recommended a personalized direct mail package that included a standard #10 window envelope with teaser copy, a personalized two-page letter, donor form, reply envelope, a four-color brochure and a lift note.

What We Did

We worked with the organization’s data processing department to segment the membership list by gift history. In all, six segments were created, including a segment for non-donors.

We then created a single direct mail package in six versions — one for each segment.

Each letter and each donor form featured a personalized salutation and individualized bar code which allowed for automated response tracking.

Mailings were sent to all of the donor segments as well as a random selection of the non-donor group (as a way to confirm that non-donors would not respond).

How It Worked

Overall, the program achieved a 375% return on investment. All of the donor segments brought in more money than was spent while one segment produced an ROI of more than 3,500%.

As predicted, the test sample of non-donors produced very poor results bringing in less than 10% of its mailing cost.

The magazine insert failed to cover its costs but did increase awareness throughout the membership and it is believed (although it cannot be substantiated) that this awareness helped increase response to the direct mail.

Part of the success of this program was our ability to reduce costs by excluding all but the test sample of the non-donors from the mailing. Instead of mailing to the full membership of 325,000 (at a cost of approximately $225,000), we mailed to just 66,000 past donors and 10,000 non-donors members (at a cost of approximately $55,000).

Subsequent Activity

This was a solo mailing primarily because it was a new charity being introduced to the membership. Future fundraising would become part of the organization’s general fundraising effort which supports all of its charities.

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