September 15, 2006 Tom Pope
How slick is that direct mail? Donors strongly dislike nonprofits using big-business marketing and sales techniques. They are turned off by glossy brochures, unsolicited “gifts,” and telemarketing.
These are some of the results in a report called, The Charitable Impulse, by Public Agenda, a New York City nonpartisan research organization. The study was designed to explore perceptions held by typical donors.
One common theme stood out from the six focus groups. The more charities used “slick” big-business-like marketing and sales practices, the more they were seen as being sales-oriented. Many participants worried about expensive marketing costs. But what donors say and how they actually react might be two different things, experts said. Participants did admit that charities should send the message effectively, and most comments about “over-marketing” were eyed at large national organizations. How did they define the term slick? “My observation is that the vast majority of the public now gets marketing in college and they have a radar for marketing that’s over the top or doesn’t match the product,” said Ruth Wooden, president of the Public Agenda, who started her career in commercial advertising and was president of the Ad Council.
The Public Agenda was founded in 1975 by former U.S. Secretary of State Cyrus Vance and social scientist Daniel Yankelovich. The research was conducted along with the Kettering Foundation and Independent Sector, a national coalition of nonprofits and foundations.
Public Agenda defined “civically engaged” for the focus group members as people who donated at least $300 to charities in the past year, were members of a civic group such as a PTA, volunteered at least once in the past year, and voted in the past election. Participants had to meet three of the four categories. Public Agenda noted that only four in 10 of those studied contribute $250 or more a year.
Other findings of the study showed that the perception of nonprofits focuses on human service charities and most donors were unaware of the role of foundations. Many people resented hospitals and universities, claiming that the fees charged made them fall into almost a for-profit category. Meanwhile, small donors believe that local nonprofits drive civic life and they admired these nonprofits more than the government or national charities.
“How slick is defined is different for each audience,” said Raymond Grace, co-founder and chairman of Creative Direct Response, a full service agency working for nonprofits in Crofton, Md. Grace pointed to Lance Armstrong Foundation mailings, seeking a 30 to 40-year-old biker, hiker, young professional type of donor. That package sports a slick, shiny carrier with multiple colors and a Lance Armstrong wall poster.
“With that specific market, slick would work,” he said. “But when you seek the coupon clippers aged 60 to 65, that would be a turn-off.”
In this case, the term slick is probably not identified by the Vietnam veteran contributor who is 60-plus, according to Grace. That audience would be concerned about wasting dollars.“The traditional direct mail donor is usually a 60-plus, white, and contributor of 6 to 10 charities a year,” he said. “These people have time to read material and are retired. They will respond to Lance’s message, but not in a slick passage.”
On the other hand, slick can work for a traditional audience. Grace said that he worked with a Catholic charity by upgrading the mailing from a simple one and two-color envelope to a four-color presentation. However, he didn’t use a shiny stock.“We used religious art in a respectful manner that helped get the mission across,” he said. “The package greatly improved results because people were enticed to look inside.”
Subtle use Grace did use slick, but changed the location. The organization had spent money on the inside while the outside was ignored. The use of “slick” resulted in a 7 to 14 percent improvement compared to the previous package, said Grace.
“Printing has improved so greatly that the use of colored stock is less expensive than five years ago,” he said. “However, if I put that same four-color on a shiny envelope, the package might have been too slick.”
Yet slickness is not the question. Rather, it’s about how the perception of the message is sent, according to John Ernst, vice president of account management of ParadyszMatera, a media services firm for direct response marketing, in Minneapolis. “Every organization has the goal to talk to donors, but differences exist in how an audience wants to be addressed,” he said. “Many like direct mail and may like premiums, even though they might not be the people to become involved with grassroots efforts.”
A perception of slickness could depend on the generation. For example, environmental groups have a different way of sending messages from disease-based groups. The audience of some groups could cross over between generations, while others might include only certain age groups like the veterans from Vietnam or World War II.
Larry May, CEO of Direct Media, Inc., a direct marketing firm in Greenwich, Conn., worked on American Heart Association copy that dealt with language about loved ones dying of heart disease. While most in the focus groups deemed the approach as rough and frightening, the language became the control copy for 15 years.
“I have a different perspective of focus groups,” he said. “They are a poor indicator of which creative will be successful. They invariably reject the ones that will be the most successful.”
The Public Agenda focus groups were not handed stimuli from a package or ad sample. Instead, the moderator probed with general questions, according to Wooden. “We wanted a degree of spontaneous answers because what people say first is often the driver of how they feel,” she said.
While the figure of $300 contributed by the focus group members included many who were multiple givers, no distinction was made whether some were special donor club members. One question unanswered is whether these people would have a unique response.
“One of the results was that there wasn’t much variation across geography,” Wooden said. “Within group characteristics, donors were typical of small to moderate givers, which is characteristic of a large percentage of the donor public.”
However, the voting part of the criteria might skew the results, according to Grace. “If you’re a Left or Right Wing person, you might give more per donation than average, but you won’t necessarily give to health appeals or veteran appeals,” he said. The political part is an influence of how they respond, he explained.
“If many nonpolitical people contribute $300 and it’s in a response to direct mail, the average gift is $15 to $20,” he said. “Then that’s a lot to them, but if they are political and they are giving $100, then that is only three donations.”
Results could be relevant to a specific segment, rather than the entire population, according to Grace. Many segments exist in the marketplace and older direct mail Americans are still a 60-plus market.
Besides finding more politically active and civically conscious people from the focus groups, a younger audience usually appears than in general, according to Ernst.
“Perceiving the term slick can depend on which generation picks up the image,” he said. “Boomers, and Gen X want to dictate how they are addressed.” Another major display of marketing that bothered the Agenda groups hinged on ads of starving children. People thought money could better be spent for the cause, according to Wooden.
“Those comments probably came in reaction to regular appeals on television,” she said. “To make a pledge for a monthly cause means the average gift is higher, so the ad seemed over the top.”
Yet weren’t those ads giving information about the mission, an approach deemed important in fundraising? “Usually we see more positive responses from images of poor children,” Grace said. “Those can be negative if the images are gaunt and appear to be one step from the grave because they become too painful.”
Grace explained that the younger family doesn’t mind spending $21 a month because they are raising children and feel guilty about the starving children. On the other hand, direct mail people are not the audience for a group like a major national children’s charity, according to Grace.
The concern about expenses for the TV ad shows a lack of understanding about television, according to Ernst. “Many times the television is much cheaper than direct mail,” he said. “The repetition can become a problem, but this also shows that the approach is successful.”
The larger issue is that we are starting to see new technology reach donors. We will want to understand how mail goes out to segments, how many have gone to a particular household, and how to avoid turning donors off.
Fundraisers want to link the mission in a constant message. But doesn’t the repetition of branding about the mission seem like the business approach the focus groups disliked? “It’s tough to draw too much from one study,” he said. “Most organizations aren’t branded that well, and it’s possible that when someone perceives a too slick image, that the slickness dominates over the mission.”
Reaction to premiums Donors gave the thumbs down to “highly polished unsolicited” premiums. “Some notepads, or address labels seem excessive, and the donors in focus groups feel the gesture is over the top, like a business,” said Wooden.
“When nonprofits get away from the elements of a letter and reply device in more of a traditional letter format of name labels, it’s because they want to look hipper,” said May.“Maybe they try a self-mailer or flier.”
The audience should dictate the premium. For example, the New York City Opera can try an innovative approach because of the demographics, but the mainstream nonprofit donor is more receptive to the traditional premium.
How does a fundraiser avoid going over the top? Don’t put a dollar value on the concept. But, send something in relative value to the gift of your ask. “If you’re getting $500, that doesn’t mean you send a $100 jacket,” said David Hazeltine, president and CEO of Yellowfin Direct Marketing, Inc. in Boston. “But you have to send something nicer than mailing labels.”
Part of the report shows a discrepancy between nonprofit management and the donor. “This is a signal to leadership to be mindful of the tip of the iceberg shown by donors in these groups,” Wooden said. “Often leadership makes decisions about marketing based on the return of the mail — a higher response rate means a better mailing.”
However, leadership should be in touch with donors on an emotional basis rather than a database one, according to Wooden. Leadership has to constantly listen to perceptions, according to Ernst. “Whether they are right or not, ignoring the perceptions would be one of the worst things,” he said. “Leadership would potentially put the organization in jeopardy, particularly with high-dollar donors.” DRFE
Tom Pope, a New York City-based journalist, writes on management issues.