Is There Future for Direct Mail Fundraising? Geoffrey Peters, CEO Moore DM Group

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1 Is There Future for Direct Mail Fundraising? Geoffrey Peters, CEO Moore DM Group

2 Environment for NGOs More new charities every year More competition for dollars

3 Why Use Direct Mail Fundraising? Individuals remain the single most important source of charitable giving (estimated at more than 80% of funds). Direct mail continues to be the dominant source of fundraising for most organizations.

4 Why Use Direct Mail Fundraising? Poll* results: 75% of those who gave to charities listed as their reason for doing so: because they were asked. 42% of those who did not give to charities listed as their reason for not giving: because no one asked. * *Independent Sector U.S. national poll

5 Research Study Millward Brown used fmri to show how our brains process paper-based and digital marketing in different ways. Paper ads caused more emotional processing. USPS (OIG) study with Temple Univ. showed subjects processed digital ads more quickly but had stronger emotional response to physical ads and remembered them better. Physical ads stimulated the part of the brain associated with value and desire for featured products. USPS, Office of Inspector General, RARC Report WP Using Neuroscience to Understand the Role of Direct Mail #

6 Research Study 6 #

7 What is the importance of Direct Mail? Curtis Yarlott CEO of St. Labre Indian School

8 Most Donors are Older and Older Donors Give via Direct Mail # 30% US Older Population by Age: Percent 60+, 65+ and % 15% 8% % 60+ % 65+ % 85+ 0%

9 Percentage of European Population over age 65

10 United Nations: World Population Ageing #

11 United Nations: World Population Ageing Line represents those age

12 Impact Of Aging Population On Future Market Growth As the broader population ages, additional people will be entering the time of life when they give through the mail Nonprofits that serve older people will see dramatic increases in their programs and thus will need more funding to support their missions The largest intergenerational wealth transfer in history, estimated at $41 trillion, is under way as the Baby Boom generation inherits Globally, approximately 55 million people died last year in 40 years that number will nearly double. The aging population creates an opportunity to secure philanthropic legacies

13 Let s hear from some charity CEOs Steve Nardizzi, CEO of Wounded Warrior Project 10 years ago this charity was a startup Today it has revenue of $450 million+ Lt. Gen. (Ret.) H. Peter Osman, CEO of Marine Corps Toys for Tots One of the best recognized charity brand names in US

14 Why Use Direct Mail Fundraising? Direct Mail tends to be counter cyclical. Major Donor and Corporate Fundraising are very subject to economic cycles

15 Diversification of Revenue Streams Al Giordano, COO of Wounded Warrior Project

16 Typical Value Donor Pyramid Planned Gifts Major Donors Renewed Donors New Donors Prospects Universe

17 Three types of Planned Gifts Bequests Approx. 80% of all planned gifts and most come from direct mail recipients Charitable Remainder Trusts this is predominately for the wealth and for major gift officers Charitable Gift Annuities more like a sale than a gift

18 Where do the big gifts come from? Prospective Major Donors Planned Giving Donors Large Gifts are Based on Capacity (Wealth) and Affinity (Loyalty). Discover through prospect research and cultivation. Loyal Direct Response Donors New Direct Response Donors Bequests are Based on Affinity (Loyalty) not Capacity (Wealth). Discover by reminders and waiting. #

19 Let s Just Get Some Wealthy Donors In order to cultivate and eventually ask for money Does Money Really from major donors you must find some: Just Fall from Trees? Who are interested in your cause Have the capability to give large gifts Have a current desire to give How much work have you done to locate those who meet the above criteria? Board contacts Previous individual major donors Direct Mail Fundraising builds the base of the Donor Pyramid so that you will have prospects for major gifts in the future! #

20 What do charity Development Officers say? Kory Christianson, Chief Development Officer of St. Joseph Indian School

21 Let s Just Get Some Bequests In 2013, accounted for 8% of revenue from individuals (Giving USA 2014) 5% of those who die leave a bequest compared to 85% who give in their lifetime. (Radcliff) Approximately 80%-90% of deferred gifts are bequests Approximately 80% of bequests are unknown to the nonprofit until after death Approximately 75%-85% of bequests come from direct mail donors who were NOT high dollar donors Where do charitable bequests come from? Direct Mail Fundraising builds the base of the Donor Pyramid so that you will have donors who leave bequests in the future! #

22 What is event would be uniquely to your group? Who would attend? Wealthy people invited by Board? Possibly corporate donors but could you get cash gifts? What reason would they have to attend? Special Events typically have a very high cost of fundraising so you must carefully analyze projected revenue and consider the ROI Special events have an unusually high risk and are usually staff intensive Let s Just Hold a Special Event Direct Mail Fundraising builds the base of the Donor Pyramid so that you will have people to invite to events in the future! #

23 Online Fundraising If you build it, will they come? Between , dozens if not hundreds of charities built websites assuming that donors would find them and they would make money. It didn t happen. In 2007, online revenues were less than 2% of charitable giving. Online fundraising requires the acquisition of names and addresses followed by outbound marketing in order succeed. However, 28% of donors go to the charity website before making their gift via mail and 80% of donors making a gift of $100+ go online first even if the gift comes through another channel. Therefore a donor-friendly website is important to direct mail success. We also recommend Search Engine Marketing and Search Engine Optimization (SEM/SEO). #

24 Why is Direct Mail Fundraising a Diversification of Revenue Streams Good Choice? Strong ROI Build unrestricted cash reserves Counter cyclical during down economic times Build brand and opportunity for thought leadership Source of future: deferred gifts (bequests) major donors event attendees advocates

25 What do Donors think about Direct Mail? Grizzard s 2009 Donor Survey Preferred method for communication: 59% of active donors prefer direct mail 23% of active donors prefer church 19% of active donors prefer to hear through family 15% prefer the web 25% of non-donors prefer direct mail #

26 Most Donors are Older and Older Donors Give via Direct Mail A healthy 65-year old couple has a 52% chance that one or both of them will live to age 92 and a 36% chance that one of them will live to age 95.* That gives you 30 years to market to the Baby Boomers. Do you want to be marketing into a market segment that will double in size in the next 20 years or focus on younger donors, a market that is experiencing no growth? * Society of Actuaries #

27 Direct Response is Like an Endowment Which is the Better Investment? If you endowed a charity with $1 million in today s climate they might earn 3% or $30,000 per year. If you spend $1 million on direct mail 3 years later you would produce just under $500,000 from the direct mail program alone and the amount would grow each year thereafter

28 Is Direct Mail Dead? Susan Loth, Sr. Development Officer of Disabled American Veterans

29 The correct question is not whether direct mail is dead but rather what role should it play in the future

30 Integrated Fundraising and Marketing Telemarketing DRTV Radiothons Social Media Online Marketing and Website Direct Mail Major & Deferred Gifts Special events Display advertising Cell phone text-to-give Corp & Cause Marketing Magazine & newspaper inserts There are lots of ways to ask! 30 Public Relations 30 #

31 Touchpoints In addition to any other benefits of integration of multiple channels the ability to reach out and touch a donor or a prospective donor through a second or third channel is critical to cultivation and stewardship of your supporters

32 Multi-channel marketing Different channels appeal to different age groupings but they are still age 48+ Digital (Internet and ) tends to skew about years younger DRTV tends to skew about 7-10 years younger

33 Multi-channel marketing We know from multiple studies that multichannel donors are more valuable to an NGO than single channel donors What direct mail does better than any other channel is produce large numbers of new donors at a reasonable cost* * In most countries. DRTV is also quite effective at producing new donors but often costs more so tends to be focused on monthly donors. #

34 # The reports of my death have been greatly exaggerated. Mark Twain

35 Questions? The only bad question is the one that wasn t asked! # 35

36 Thank you for attending! Geoffrey Peters, CEO Moore DM Group # 36