A Brief Explanation of
Direct Mail Fund Raising
The concept of direct mail fund raising seems to baffle many individuals. Although it does take special talents and experience, direct mail fund raising is actually simple advertising. Instead of selling soap, new cars, etc., the fundraising appeal asks for contributions.
The fund appeal can be, and frequently is, packaged for TV, radio, newspapers, billboards, or any other advertising media. However, experience has led many national and even local organizations to lean heavily on direct mail fund raising. The advantage which direct mail has over other advertising media is that it is possible to directly measure the response and gauge the effectiveness of the direct mail appeal by simply counting the returns.
In its simplest form, the fund appeal will fall into this pattern:
- Attention. Getting the attention of the prospect,
- Problem. Outlining the problem,
- Solution. Presenting a solution to the problem, and
- Close. Convincing the person reading the direct mail solicitation to donate. (closing the sale).
Although direct mail fund raising is an art and not a science, general guidelines can be followed. Advertising ordinarily operates on a "loss leader" basis, and direct mail fund raising is no exception. By "loss leader" we mean that new businesses that make large outlays for advertising budgets do not expect to immediately make a profit from those ads. Their initial goal is to get the potential customer into their store, make a sale, and keep him coming back. Their profit is made from "repeat" sales to customers who continue to buy their products throughout the years.
Direct mail fund raising for a cause or candidate is no different. Thus, "prospect" mailings to "outside" lists (those lists which contain potential but not previous donors to the cause) will have as their goal the addition of new names to the cause "house" file (confirmed supporters who have made previous contributions).
Prospect mailings are conducted by first mailing to a series of tests (these test segments are a cross section of a large list of potential contributors) usually composed of five thousand names each. If a test segment makes money or nearly makes money, the cause would send their appeal to the balance or at least a larger portion of that list. Financially, the goal of these mailings will be to break even. It is often necessary to lose money on some outside mailings in order to build a house file.
Once an individual contributes to a group, he is placed on that group's "house" contributor file. By making a contribution, he has made a commitment to that organization. This interest in the projects and programs of the group means that he will continue to contribute to the organization in the years ahead. Thus, mailings to the "house" file will result in a high rate of response, insuring significant net dollars for the ongoing programmatic needs of the organization.
From time to time, it may be necessary to use some of the house file net dollars to offset losses incurred in outside mailings. If a sizable amount of capital is invested in the program initially and/or a significant portion of the net returns are placed back into the prospect mailings, a large house file can be built at a rapid pace with the original capital investment being recovered in two to three years.
The success of any direct mail fund raising appeal is dependent on many variables, including changes in general economic conditions and the occurrence of dramatic public events. Those variables within the control of the organization must be optimized, including access to the best names and to a recognized and respected signatory.
The question that must be asked of someone who is considering direct mail fund raising is whether the American public is truly interested in their cause. If the donating public is truly interested, direct mail can be used to recruit contributors who will provide long-term financial support for the organization.