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Is Direct Mail Working?

The following is excerpted from the July/August 2002 Advancing Philanthropy cover story.

DIRECT MAIL HAS BEEN a cornerstone of fundraising efforts for many nonprofit organizations over the years, and no other way of reaching people is as cost-effective, says AFP member Kay Lautman, CFRE, president of Lautman & Co., a direct mail fundraising agency based in Washington, DC. 'Door-to-door canvassing has gone the way of the dinosaur. Organizations don't have enough volunteers to sit down to lunch with everyone,' she says. 'With direct mail, you have time to state your case.'

According to the Direct Marketing Association (DMA), 60 percent of nonprofits include direct mail as a fundraising strategy. And according to 1999 research reported in the Household Diary study by the U.S. Postal Service (www.usps.com/ householddiary), potential donors don't toss a direct mail appeal from a nonprofit. In fact, almost 80 percent of consumers read nonprofit mail, look at it, or set it aside to read later.

Even though direct mail is still quite effective, its success has waned somewhat in the past decade, according to Lee Cassidy, executive director of the DMA Nonprofit Federation and an AFP member. To keep direct mail working for your organization, you need to keep up with design trends and adjust to the challenges facing direct mail.

WHAT'S NEW IN DM?

Just like clothing, direct mail is subject to design trends. Gimmicks and big flashy packages, once de rigueur, have been replaced by a more modest and classic (read reassuring) look. Lautman recommends a plain approach because 'usually, cleverness backfires.' The key is to design direct mail that looks personal rather than commercial.

Envelope design. Plain envelopes with your organization clearly and simply identified in the return address corner will generate the best response. Lautman & Co. conducted a test and found that appeals with teaser copy made less money than appeals with plain envelopes--and plain envelopes are less expensive.

Postage. The best type of postage to use is the nonprofit-rate 'live stamp.' Lautman says, 'It works better than indicia [imprinted postage].' Some organizations, including the March of Dimes, splurge on a first-class stamp when mailing to high-dollar or proven donors.

Enclosures. Four-page letters still work best. They simply pull in a higher average gift than shorter letters, Lautman explains. Longer letters are particularly good for organizations that aren't household names--they can tell a story. Recipients often glance at the opening paragraph and the postscript to get the gist of a letter, so be sure to encapsulate the heart of your message there.

Formatting. Set generous margins, indent paragraphs, and use white space. As Lautman puts it, 'It's not business correspondence,' so make it look friendly and low-stress. When it comes to type, what matters most is readability, not the particular typeface. Lautman recommends using serif rather than sans serif typefaces. (Serif type has strokes extending from the letters to help the eye track their shapes, like the type used for this article. The subheadings in the article are sans serif.) Type size should be at least 12 points, and if you have too much copy to fit into four pages, cut words--don't shrink the type. Recipients are more likely to toss a letter than strain to read tiny type.

Premiums. Be conservative. Lautman suggests that if premiums are too commercial, donors might get the impression that the charity is wasting money. 'Charity fundraising is serious business,' she says. Supporters want assurance that their donations are being used directly for the cause, not being spent on seed packets or calendars.

The rule is not absolute, though. Lautman cites a campaign for an organization that feeds the less fortunate: Recipients are asked to write a message on an enclosed placemat and mail it back with their donations. The placemats are then used at Thanksgiving dinner. In this case, donors seem to feel that the placemats are not wasteful and in fact are a unique way to have contact with the people that the organization serves.

Another exception to the no-premium rule is useful yet inexpensive address labels, which have been very popular for years. To make this premium work, the labels obviously must not contain misspelled names or incorrect addresses. Carole Portale, vice president of direct response for the March of Dimes, says her organization is extremely careful to keep its databases accurate so address labels will be useful and appreciated as a premium. The March of Dimes varies the label design with the seasons for added appeal. But don't neglect to put your organization's name or logo on the labels.

Reply envelopes. Unstamped reply envelopes can be used for established donors and members, who are more likely than potential donors to be willing to foot the postage. However, use prepaid postage to boost response in new donor acquisition mailings. Some organizations opt to enclose a reply envelope with a first-class stamp, hoping to make recipients feel 'a little bit guilty,' as Lautman puts it. This technique is expensive, though, and Lautman does not recommend it.

Security. After the anthrax attacks last fall, security became an urgent issue. AFP counseled its members to make the mail more secure by clearly identifying the sender on the outside of the envelope. Lautman also recommends completely sealing it--that is, not using an envelope with an open window. In fact, her company recently found that envelopes with glassine address windows yielded better results than envelopes with an opening for the address. Recipients may have been more inclined to throw away envelopes with open windows for fear of contamination.

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