Ho Ho Dough

July 15, 2005       Craig Causer      

Nonprofits bank on the goodwill of the public during the holiday season. Will the sector hit the jackpot and score the allegorical Red Ryder BB Gun with a compass on the stock and this thing that tells time? Or, can it expect more along the lines of a lump of grandma’s stale fruitcake?

Marilyn Michie, executive vice president of The Heritage Company, which has 160 nonprofit clients, said, “many nonprofits are sticking with the status quo for their Christmas mailings. What has worked in the past will be used again for Christmas 2005,” she added.

However, Michie said, in 2004 she saw more of her clients going for new acquisition more than just for donations. During the last five or so years, Michie said that many nonprofits had concentrated on reactivating lapsed donors but last year they began to look at new acquisition.

“We’ve had some challenging years with 911 and more recently the tsunami so we’re being very careful and making sure everything we do is cost effective.”

Her clients are also trying to better track the value of their donors. Keeping costs down is becoming the keyword for many nonprofits.

Additionally, Heritage is telling its clients to focus carefully on better lists to make their acquisition mailings more effective

For instance, the Empty Stocking Fund, which provides toys for needy children in the metro-Atlanta area, not only rents lists from various children’s organizations but has also started to use homebuilder lists. With new housing starts still strong throughout most of the country, Michie said it was a logical step to use homebuilder lists as a way of finding new donors.

“We are looking at different lists outside their normal realm,” Michie said. “We are suggesting they go off the chart and look at lists that they might not normally consider. They need to think outside the box.”

However, Diana Estremera, vice president of the Greenwich, Conn.-based May Development Services, said her clients are sticking with the “tried and true,” lists, rather than going with new ones.

With increasing postal rates, nonprofits are “mailing smarter,” Estremera explained. “They are thinking about who they are mailing.”

But, she did agree with Michie on the issue of lapsed donors versus acquisition. May Development’s clients are pulling back on some of the holiday mailings that try to reacquire lapsed donors and going more for acquisition.

Because of the increase in postal rates expected to take place early next year, Michie said her clients are integrating other channels with their holiday appeals. “They’re integrating telephone calls and emails with their direct mail,” she said. The telephone calls are used as follow-ups to the direct mail, Michie added. And after the phone calls comes emails. “They are tying them all together.”

Estremera said that anticipated postal rate hikes have May Development’s clients thinking about altering their drops so that more are sent for the holiday and less go out the rest of the year. While, in the past, clients may have sent out a total of 5 million pieces with1 million pieces in February, another million in May and a third million in July, with the remaining two million going out over the holidays, now they might send a little less each of their drops so they can send more for the holidays, Estremera explained.

The holiday drop is really the best time for most nonprofits, Estremera said. People are in a giving mood and many want to get in their last donation of the year for the coming tax season. Generally speaking, the average gift doesn’t change during the holiday, about $13, Estremera said, the percentage of donors increases, usually from about 1.5 percent during the year to about 2 percent for the holidays.

To increase the response rate or at least to keep it even, more nonprofits are trying to better target their messages, Estremera added. By doing this and mailing known donors and using lists that have worked in the past, some nonprofits are able to increase the names on their own lists, she said.

When it comes to holiday packages, what has worked in the past is still working, Estremera said. Holiday cards always work, she added. Name labels also work well, Estremera said, but now more and more charities are getting away from white labels and sending gold and silver foil ones. Some nonprofits are also sending out shipping labels, which prospects can use when sending packages to loved ones.

Another package Estremera said she is seeing more of is a large premium package that contains wrapping paper, bows, and gift tags. “This one seems to work well,” she said.

Straight appeals to high-end donors also work well during the holiday season, Estremera said. Nonprofits should direct mail all donors who have contributed $250 or more. “It will be a hit,” she said.

Mike Johnston, co-founder of Hewitt and Johnston consultants and HJC New Media in Toronto, said that his clients, like Michie’s, are making more use of e-cards and “viral pass alongs. There is an obsession with using alternate media (such as the Internet) because of the rising costs of direct mail,” Johnston said.

Michie suggested telephone calls. We are telling our clients to use them as a “thank you” to the donors. Some of the nonprofits are also sending thank you notes, however so few charities actually call to thank donors, “that we are afraid we will send some of them into cardiac arrest.” But the holiday season is a great time to let donors know that “you appreciate what they have done for you throughout the year,” Michie added.

For direct mail, HJC’s clients are doing “the same old, same old,” Johnston said. What has worked in the past for holidays is continuing to be used. He added that he is not seeing many new things for the holidays.

However, one thing that he is suggesting to clients is to talk to their senior donors about “legacies.” “It’s a good time of year to approach their more elder donors,” he added. Around the holidays, people begin to think about family and possibly leaving behind something for their families of which to be proud.

Early birds

“My crystal ball says that it’s (the holiday season) going to be fine,” said Lynn Edmonds, president of LW Robbins Associates in Holliston, Mass. “I’m not seeing anything that’s telling me there’s going to be a problem at all. I guess some people have said the tsunami at the beginning of the year hurt them but we didn’t see it. So I’ll actually predict that things will be better this holiday season.”

Some agencies that are ahead might back off a little bit on how much they’re mailing but mostly, if donors are giving on a regular basis they’re going to continue to give on a regular basis, Edmonds added.

Disabled American Veterans (DAV), one of the largest nonprofit mailers, already has a proposed schedule for 2006. The Cincinnati-based organization does not currently have a Christmas campaign. Rather, it mails in October and again right after the holiday season.

DAV tested and found that its campaign performs better after the holidays, said Susan Loth, director of fundraising at DAV. Last year was the first year it switched back to mailing after the holidays. It’s Commander’s Club mailing, which has been going on for more than 15 years, will be the same this year and only change slightly as far as artwork or components, Loth added.

The Commander’s Club mailing goes out to DAV’s donors that are renewals and who have received the mailing in the past. Response is generally in the 20 percent range but, Loth said, it’s not a true acquisition program.

“ We had a really good year last year and kind of made a decision based off of that, that we we’re going to bite the bullet,” Loth said. “What we did was develop a campaign after the holiday but knew the revenue wouldn’t come in. In the prior year it was mailing in January and we had another one in December so we threw a lot of expenses at it. We knew it would ultimately help us in 2005 because response rates were better and the net was better.”