Online giving is increasing; remember $6 billion was estimated to have been donated online during the 2010 holiday season. With that great online success, does direct mail still have a future in fundraising?
In a word: Yes. Research shows that direct mail is alive and well and has an important fundraising future. What is changing is the centrality of direct mail to the marketing mix.
While Matures rely on direct mail, 77%, as their primary giving channel, only 54% of Boomers, 43% of Gen X and 26% of Gen Y report giving through the channel. This tells us that direct mail will not be the dominate channel for soliciting and collecting gifts that it is today. And likely the content and style of the packages themselves need to be different based on the generation you are trying to reach. Additionally, this openness to direct mail across generations, combined with the mulitchannel preferences of Boomers, Gen X and Gen Y tells us that integrating face-to-face, email, web, telemarketing and other communications channels as well as integrated messages will play an important role in supporting the success of direct mail in the future.
“The majority of nonprofit marketing spend and tactics today are focused on mature donors, as they remain the mainstay of today’s charitable giving,” said Vinay Bhagat, chief strategy officer for Convio. “This research and the decline in donor acquisition rates through direct mail indicate that the marketing model needs to shift to attract the next generation of donor while supporting continued direct mail success. Charities need to move away from a solely direct response focus to a multichannel approach with a heavier emphasis on face-to-face, email marketing, web integration and empowering supporters to market and fundraise with and for the organization using integrated, consistent messages. We have to meet the donor of the future where they are.”
The chart above illustrates the channels in which donors have given by in the last two years. Giving by checkout means making a contribution when buying groceries or checking out at a retail store and is common across generations. Giving a check by mail is by far the most common giving method for Matures. Giving by mail is still prevalent with Boomers and Gen X, but at a significantly lower rate than Matures. Not surprisingly, the incidence of having given at a website increases with younger populations to the point where for Gen X it is almost equal to mail and for Gen Y it is greater than mail.
We see a very similar pattern with information channels (see below). Mail is the dominant charity information channel for Matures, but information sources are far more varied for younger generations, with websites and email communications being ranked as most important. Facebook and other social media register as somewhat significant charity information channels for Gen X and Y.
“The research indicates that future fundraising will move from a direct mail-focused environment to one that is multi-focal and requires strong collaboration across departments and channels,” said Mark Rovner, Principal of Sea Change Strategies. “The next generation is telling us that moments of awareness, persuasion and action may each be happening via different communications channels. In an industry where direct mail has been the workhorse of nonprofit fundraising, we are facing a future where no one channel is likely to dominate.”
Fifty-two (52) percent of all respondents reported making a donation when checking out at a retail store such as a grocery store. While small spontaneous gifts were cross-generational, Matures report that they have well-established commitments to charities, actively budget for their giving, and are reluctant to add new charities to those they support. For the next generation donors, Boomers and Gen X giving is more spontaneous and based on who asks them to donate. They are more likely to support a charity when friends or family ask versus an appeal directly from the charity.
While engagement is reported in multiple channels, few organizations have aligned resources to ensure messages are integrated across solicitation methods. The messages in direct mail pieces are most often different from the website, emails being sent and other channels. Today, the vast majority of organizations measure their direct mail, online and other fundraising programs separately. Each channel is generally measured in terms of raised versus dollars spent on that campaign. The reality is that each communication and marketing channel, as well as the communications made by your supporters influences the other’s performance. Additionally communicating with donors through more than one channel drives stronger fundraising results and higher lifetime donor value that relying on a single channel.
The Next Generation of American Giving study shows that the modern nonprofit needs to take multichannel engagement seriously, including direct mail, and embrace the people and technology that can help them reach, inspire and move people to support their mission.