Is It 10, 25, Or 100 Dollars?
May 15, 2007 Paul Clolery
Every fundraiser wants to maximize the giving of a donor. But, how do you determine that number? The answer is a mix of testing, intuition and prodding. Getting from point A, the ask, to point B, the bank, was the topic of a recent Executive Session, held over lunch at the National Press Club in Washington, D.C. during a break in the Direct Marketing Association’s Nonprofit Federation meeting this past January.
The experts participating in the Executive Session were: Brian Cowart, senior director, Mail Acquisition/Donor Retention, St. Jude Children’s Research Hospital, Memphis, Tenn.; Cathy Finney, associate vice president, MINDset direct, Arlington, Va.; Tom Gaffny, executive vice president, fundraising, Epsilon, Wakefield, Mass., Stephen Mally, principal consultant, Professional Services, Blackbaud, Charleston, S.C., and Rita O’Neill, president O’Neill Marketing Company, Fairfax, Va.
The session was moderated by Rick Christ, president, NPAdvisors.com in Warrenton, Va., and Paul Clolery, editorial director of The NonProfit Times.
Paul Clolery: I’ve always been curious about “the ask.” How do you evolve your solicitation and message to get to that very important point? And, how are you deciding what that ask will be?
Around the table, we have people who are experts in online strategy, in list selection, creative and technology. We have both vendors and clients. Where does it all start? Does it start with the creative? Does it start with the list selection?
Tom Gaffny: Like any form of communication, it really comes down to the sender and the receiver. In terms of the sender, it’s what is your objective? In terms of the gift ask, organizations have different objectives. Some want to acquire a lot of people and they might leverage a price point towards that goal. Some might want to acquire a certain kind of person at a higher range. And given that they know that at the outset, they’re going to be limiting the number of gifts they get.
In terms of the receiver, I think the key thing to identify — more particularly for renewal — is the comfort zone/price point. The surest path to failure is to ask someone to give more than they’re capable of and you’ve lost the sale immediately.
It really is a question of looking at an array of lists and determining, based on the history of the people on that list, what they’re most likely or most capable of giving.
Mr. Clolery: In a letter, hopefully you’re going to move them to some sort of advocacy, but the bottom line is the money. So it’s not as if you’re building to some sort of suspense, right? You’re actually going to be coming to a point where you ask them to pick up a pen.
Mr. Gaffny: Definitely. Let me give you an example. We have an organization where, based on the part of the country they live in, the price point fluctuates. We identified with this audience that on the East Coast and the West Coast people were far more capable of giving a substantial acquisition gift than were people in the Heartland. The economics are different, salaries are different.
When we structured the ask, one of the first things we did for them from an acquisition standpoint, the threshold gift we’re going to be looking for will be more for this part of this country than it will be for another part of the country. I think that’s something that’s oftentimes overlooked, but that’s really a big opportunity.
Rita O’Neill: When the package gets to me as the list broker, it’s my job to minimize the risk. We know more and more about how to look at our donors, and that’s all through the technology providers and driven by the desire to continue to minimizing risk. When it gets to my desk, I can take the pieces of knowledge that are given to me, what we know about “your” donor and go from there. Everything that we’ve that we can see with additional technology, can drive the creative and testing.
Mr. Clolery: Brian, obviously the client, in your case St. Jude’s, is always the final arbiter or final decision-maker in the packages that go out. How involved are you — not you particularly, but the client — in each step along the way? How much are clients relying on folks like the ones around the table?
Brian Cowart: I think it depends. At St. Jude’s, a lot of our decision-making is made in-house. The nature of the industry is moving to so much specialization and more analytics to make decisions. More nonprofits are reaching out to specialized companies to give us those analytics.
We’re relying on ourselves more and more to make those decisions, and less on our agency friends, which certainly play a critical role. I’m finding more and more that it’s a partnership, with neither us, nor our vendor partners taking a lead role.
One of the big things, going back to what Tom said, I think as we’ve started moving more and more toward this long-term value shift of looking at data and at results, that’s also having an impact on the ask side.
A lot more organizations are looking — themselves – at the value of different donors that come in at different price points. When we send an acquisition mailing to a prospect, we’re not going to ask someone who’s traditionally given us $50 for $10. We’re going to set that person’s minimum ask at $50, then go to $75, and then go up to $100.
Mr. Gaffny: That’s a great point.
Mr. Cowart: We’re using more historical analysis to determine our ask strategy. I know this list gives me a $15 donor so it’s going to give me this type of response rate, this type of value. But a list that generates an average gift of $50 is going to generate a different response and value. I’m going to cater a very different ask strategy for each of these lists.
Mr. Clolery: At what point does the package change, based on what you’re going to ask for?
Rick Christ: You can vary the copy within a message at every level, but I would suggest that you do it somewhere around the 50 percent mark. Every organization has a median gift. Those whose gifts are below the median probably ought to get the basic package, and those whose gifts are above the median are those who are probably worth a more elaborate package that justifies a more elaborate ask.
So in the number 10 package, with a matching reply device in a number 10, that might be great for those people who are giving $10, $25.
The people who are giving well above that median probably deserve something more elaborate. It could be photographs or a project budget. Ideally, you know whether you’re reaching a right or a left brain person. When they send me a budget, the photos don’t do as much. Other people, the last thing they want to see is another budget.
I tell people to write the long story, and write that letter first. You might have to cut it to fit the package for the lower-end donors, but don’t hold back on the higher end people. They’re generally worth every additional dime you can put into that package.
Mr. Clolery: Rita, you’ve been trying to jump in here.
Ms. O’Neill: I have often sensed that I had to ask and pull information from some clients. If a client tells me they’ve been doing an analysis internally for two years, and the grassroots lobbyist or the activism side is not communicating with the development officer, we just see lip service to implementing integration. I couldn’t do what I do now, if I wasn’t getting much better insight and information from all aspects internally.
Stephen Mally: I think that’s a really good point. The relationship between the vendor and the client is crucial, and that’s one of the most important relationships in our sector. Having been on the client side, and now I’m on the vendor side, I think that that is one of the most important relationships for a nonprofit. It’s really crucial for clients to consider vendors to be an extension of the staff. Vendors are only as good as the information provided.
So as a client, I would often send the same information to my direct marketing vendors that I would give to the staff people who reported to me, whether that was staff newsletters, clippings, anything electronic that I could funnel to the vendors. I think it’s really important to keep them as informed as possible. So while I hear you talking about the data modeling or anything of that sort to talk about what’s on your file, it’s also important to funnel the very basic materials to your vendors.
Cathy Finney: If we don’t hear back from our clients about what’s going on there — results, new programs, important initiatives — then we can’t make the informed decisions for moving their packages and their programs forward.
I wanted to make a really quick point about what Brian talked about earlier with partnerships.
I remember when I first started out on the agency side, working with a client was much more of an educational process. Staff on the organization side did not have the direct marketing expertise that the agencies had. So much time was spent on the educative process – teaching the basics of direct response fundraising. But over the years, staff on the organization side have taken large steps in terms of professional development, which makes our jobs a little bit different.
It is indeed a partnership now. We are peers sitting across the table, as compared to us (at the agency) sending directives to our clients. Now we really function as a team, and this makes the information-sharing that Brian was talking about earlier crucial to our team’s success.
Mr. Gaffny: If I could just make one point, too. The term “donor-centric” has almost become a cliche since it’s used so often. But to your point about acquisition, I never hear people talk about prospect-centric, and really, that’s where you start. By prospect-centric, I mean being able to identify your prospects and what their threshold of giving might be, what kind of treatment might be appropriate for them and on down the lines, because there’s no carpet-bombing technique for mass mailings, or at least there shouldn’t be.
It really should be as individualized as it can be based on maximizing the value of every prospect name you identify. And the whole idea of prospect-centric might be something that we should think more about.
Mr. Cowart: Just real quick on the testing and package nuances and being prospect-centric, I think the key is — it’s so clich»d — test, test, test and focus on servicing the donors’ needs. Are we giving them what they want?
Something we just did at St. Jude, we had an open ask in our acknowledgements and we kept asking ourselves, should we be asking the donor for a gift? We’re assuming the donor doesn’t want to be asked for a certain dollar amount. We’re assuming we’re going to upset them if we ask them for another $25, but that’s our assumption. Maybe donors do want that and they want you to tell them, “I spent $25, and yes, I’d be glad to give you another $25.”
So we conducted a test and it proved very successful. We were expecting our average gift to go up by putting a specific ask amount in the acknowledgement. It was the reverse. Our response rate went up significantly; our average gift stayed the same.
Mr. Clolery: Take the client’s side. Day one of putting the package together. You’re starting from scratch. Talk about having to set up a mail schedule. Take the reader from the very beginning.
Mr. Cowart: I think there’s a lot of pieces to where you start. There’s messaging, there’s offer, there’s the list, there’s the ask.
They’re all starting points. If you don’t have a package, you have a lot of testing to do. An organization has many messages it can portray. You have to figure out the message that’s going to resonate to a particular audience. I think the first thing you have to do is figure out is the message that you want to portray.
And once you have that, then there are many offers and ways that you can execute that message — premiums, non-premiums. And then, of course, you have list tests.
So for me, I probably would first figure out what my messaging is going to be, and then I would begin to engage a list partner in terms of what list might match this message. Should I mail to international relief lists or health-related lists? Can I afford to take this message to a consumer list?
Who might be the target that matches this message? So I think that has to come before you start talking about audience; otherwise if you select the audience, you’re going backwards.
Mr. Clolery: How much of this is technology-driven?
Mr. Mally: This won’t be a surprise from a Blackbaud guy, but I think technology is an organization’s best friend. Technology helps you to really gather 360-degree information on your constituents. Technology allows you to select on that information, segment on that information. I believe that technology is an organization’s best friend.
Oftentimes, people will view technology as overwhelming or the enemy, and it actually is one of the biggest assets. An organization’s database is one of its key assets. Unfortunately, a lot of organizations don’t spend the time doing the proper data hygiene throughout the course of a year. So, they’re dealing with some pretty messy information. Investment, whether it is annually or quarterly, in your database is essential to results throughout the year.
Mr. Christ: A lot of people miss the strategic value of information. One of the things that information allows you to do is to see not just how to make the program marginally better, but also when the program is going globally wrong.
Here’s a quick case in point. Many, many years ago, I worked in an organization where they had a loss leader offer, as many organizations do. My challenge wasn’t lifetime value. In fact, I don’t think that phrase had been invented back then. My challenge was tactical. It was calculating print requirements over the next 24 months.
A way to do that is:
* Here are the segments;
* How are those segments going to grow;
* How those segments did grow.
What was happening was we had this huge volume of names coming in as prospects — we wrote to all of our prospects — and they weren’t moving. In other words, we had 0 to 6-month names. Then we had a huge chunk of 7 to 12-month new names, meaning they hadn’t given since. Then we had this chunk of 13 to 24-month names. They still hadn’t given, and in huge numbers.
So I started to go back and say, “What’s going to happen here?” The end result was that at our peak we had recovered 85 cents of that dollar and then every mailing after that we started going downhill.
What we were doing was building a huge inactive file, thinking that while it was losing money in prospecting, that the response rate was great. We were losing our shirts. What the data did was allow us to see that we were globally going in the wrong direction. Those of us who studied the data said, “We need to strategically change – and this afternoon.” So there’s that value of data.
Mr. Mally: It’s the information that we have available today at our fingertips on our desktop that makes us valuable and helps us to argue for more investment dollars in our program, and helps us to strategize with our vendors in even smarter ways.
We’re really talking about strategizing through analysis, hopefully of past success unless it’s a start-up mailer. It’s executing that mailing, analyzing the results, collecting the right data on the constituents so that you can analyze the results, and then planning, analyzing, executing that all over again, so it’s a full circle, non-stop full circle.
Ms. O’Neill: There seems to still be those invisible or visible walls between what we call low-dollar and major gift. And yet what you’re talking about and what I know we can do with the technology with the partnerships with our vendors, and with the creativity, is closing that gap. We don’t have to think only in terms of $10, $25, $50 and then $5,000 either by program or departmentally.
Ms. Finney: The shift, though, needs to come within the organization in that case. Many organizations — and Brian, I don’t see this as much with you as I’ve seen particularly in the organizations that I’ve worked at — have these set up. Membership goes here, mid-level giving goes here, major gifts go to development, and nobody’s talking in between. Everybody has their own internal budget goals that need to be made.
I’ll talk about the industry that I just came from. I saw a trend in trying to have an across-the-board shift in understanding of how best to fundraise for the organizations. Instead of saying, “I need to make my goal regardless of what other departments do,” and keeping everything in silos, they were talking about turning the silos on their sides and moving the donor through a seamless process.
A donor doesn’t understand that if they give $1,500 it’s going into one revenue bucket, but if they give $125 it’s going into a completely separate bucket. It’s not important for them to know that – nor should they. They’re supporting the organization because of the organization’s mission, and that’s the ultimate goal.
Mr. Mally: It starts with the culture.
Ms. Finney: But it’s a difficult change to make on the organization side, if you have goals that you have to meet annually – and the consequences of not making that goal. Will someone lose a job?
Mr. Gaffny: It really comes down to the organization defining the mission of their donor cultivation program.
Mr. Christ: The Internet has different metrics but the same dynamic. We do a lot of two-step fundraising online. One of the things we’ve found online is that you can generate a lot of petition signatures, survey results, and so forth, and collect those email addresses. And with a lot of work, you can get a decent percentage of them to become donors on the next page — on the thank you page. It could be 5 percent. I’ve seen as high as 12 percent.
Sometimes you can actually prospect at break-even or a profit online if you can get that number up. But you’ve still got 85, 90, 95 percent of the new names you acquired who aren’t donors, who’ve already rejected two asks — one was on the page after they submitted the petition, signature, or the survey, and the other was in the email because we don’t just thank them in the email after they signed their petition. We asked them “and would you please make a gift?”
The good news is you can get 5 to 10 to 15 percent of people right away to make the gift. The bad news is that other 85 or 90 or 95 percent. Trying to get one percent out of them in the next email is a lot of work.
Mr. Mally: Well, my guess is that some organizations collect certain pieces of information — collect that information and probably don’t maintain it or key it in.
Mr. Christ: People don’t give to our organization, they give through our organization. They don’t give to us because we have needs. They give to us because we meet needs.
So what is the need?
The best email I ever wrote was in the Niger famine crisis that captured our nation’s attention for about 90 days between when it first hit the news and when Katrina struck New Orleans. And in that time frame, I had a client who said, “Yeah, we’re in this business but we can’t find the right people. We can’t get past the national boundaries.”
And then all of a sudden, it broke. He forwarded three emails that came from the field through our national embassy there, because there’s not a lot of Starbucks in Niger. So these things came to me and he said, “Can you make an email out if it?” And I looked at it and I said, “It is the appeal.”
I edited it just because there were some grammatical issues. I didn’t want to embarrass this guy by publishing his spelling errors, but that’s really all I did. I wove them together as a forward from the chairman.
“I just got this email from the field. This is what we’re able to do. Can you give?” It stated the case far better than copy could ever have. And I’ve seen that enough times that if we can use the words of the doctor in the field, of the research specialist who’s working for the cure, that those people first of all have far more credibility than — with all do respect — your boss or whoever writes those letters.
Ms. Finney: What you said is so accurate. As we’re seeing donors make larger investments in a fewer number of organizations. What they want is more information from us about what we’re doing. The more that we have consistent messages from different outlets from the organization matching up, the more it will lead to more committed donors and to healthier giving. It might be from somebody in the field sending the same message as you might get from reading something online, as you might get from a newsletter that comes from the organization.