The Latino Market

November 15, 2005       Tom Pope      

Latino donors are valuable lifetime donors, yet fundraisers might miss the mark by just looking at the demographics or using irrelevant methods to make the relationship work.

Long-term success in reaching the growing Hispanic market depends on key tools, according to experts at the 2005 DMA Nonprofit Federation Conference held in New York City . The session, Hispanic Fundraising and Marketing: Critical Long Term Success, appeared as part of the theme of looking at, Fresh Ideas for Nonprofit Fundraisers.

As one example, the Priests of the Sacred Heart in Hales Corners, Wisc., maintains 740,000 active donors, of which 20,000 are Latinos. However, the nonprofit recently acquired 50,000 new Latino givers.

“We decided to test the waters in 1991 when we mailed out four acquisition mailings to the Latino market,” said John J. Cain, Ph.D., and associate director of the development office. “We mailed 308,000 pieces and received 12,394 responses while it only cost 3.28 cents per name to bring someone on file, and by the end of the year we had recovered our cost.”

The Sacred Heart was founded in the 19th century by a rich priest who became an advocate for the poor, and fought for social justice. “The Priests of the Sacred Heart don’t obtain money from the rich,” Cain said. “So that meant we had to turn to fundraising.”

Like many organizations and commercial marketing firms, the Priests noticed the census of 1990 to discover a new opportunity with the Latino population. “The Latino marketplace is growing,” said Chris Ragusa, panel moderator and president of the Estee Marketing Group in New Rochelle , N.Y. “One of eight people in the country are of Spanish origin, as of July, 2004 with 102 million estimated by 2050.”

Latino households are larger than average at 3.3 persons compared to 2.4, with twice as many children younger than age 18. The breakdown of the nationalities shows a large percentage of Mexicans at 58.5 percent, with the next group, Puerto Ricans, at 9.6 percent.

“The buying power was estimated at $686 billion for 2004,” Ragusa said. “A growth rate is projected at 8.2 percent annually.”

Ragusa explained that the DMA published a 2005 Hispanic Market Report that surveyed 11,000 Latinos aged 25 to 44 years to find that 67 percent of donors were male. Also, 70 percent are direct responders.

“However, fundraisers should know that many women donate in their husbands name,” she said.

Fundraisers might dismiss the mark because the income level is less than general. Around 49 percent of those who donate earn $25,000 or less, according to Ragusa . Also, 29 percent earn between $25,000 and $50,000.

“The educational level shows that three out of five people don’t have an education level beyond high school, she said. “Only 28 percent completed high school while 32 percent had some college or graduate level.”

Don’t make the assumption that what works in the English market works in the Latino, explained Cain. “We worried about what type of product we could offer the population,” he said.

So to find out, Cain went to a group within parishes inside a Latino section of Texas . He said that he asked, “What can we offer you to help in your activities.”

A major point is to give the person something. “There is always a quid pro quo in direct mail,” he said. “We want their support, but we have to supply them with something valuable.”

People told him that while reading material was available, they lacked daily prayer books because such items were not available in Spanish. Cain promptly planned to mail two packages of prayer books to the best donor part of the file. One book was developed at 128 pages in a hard bound cover that cost $2.58 to send in the mail, and a smaller one at 48 pages. The response rate for the larger book was 46.83 percent and the smaller package sent to most of the file recorded 17 percent.

Cain originally assumed that like English-speaking followers, the targeted better part of the market would be female and would be an older person. “But it was the opposite, he said. “We had some growth, but then we grew significantly when we dropped the women and older lists.”

Despite the first glance at demographics that show limited wealth, Cain discovered many Latino donors respond with a higher rate and average gift than his English-speaking donors. “They have surpassed where our English file had been for many years,” he said.

Another set of guidelines came from Jose Raul Perez, director of consumer marketing at People en Espanol , a Time-Warner publication in New York City . “Our experience can lend exciting information that any nonprofit can apply to the fundraising efforts,” he said.

Perez tracks the types of social issues and causes that resonate with the Latino market. The majority are Catholics, where the family concept is a personal and cultural institution. But the family is defined as being wider than in the mainstream. A connection exists with the extended family that reaches aunts and uncles.

“They desire fun,” he said. “Present the package in a visual and vibrant way, but avoid stereotypes.”

Latinos look to the future. “Emphasize common aspirations, such as owning a home because many have come to this country for a better life, especially for their kids,” he said. “Saving for college and helping others in a service to the community is important.”

Price or the ask should have an elasticity. Latinos will make a commitment and will purchase high ticket items, but the package should show a quality of an image or a brand.

Yet much of this also requires communication and fulfillment. Many donors need support on the back end when they call or reach the Web site. Customer support that is bilingual helps the communication. Most experts use generic Colombian Spanish rather than Castilian, or a Spanglish.

“A hodgepodge doesn’t work,” he said. “We use the Colombian version because it is seen across the nationalities.”

Three degrees of segmentation exist. An estimated 56 percent are more likely to read in Spanish, while 20 percent are bilingual and 20 percent are U.S. dominant.

Engage the extended family. “Use Spanish for prospects aged 35 and older and foreign born,” he said.

Be aware of cultural markers. Examples of cultural markers come from other countries. “Subscriptions don’t exist outside the U.S. ,” he said. “People don’t trust the government about whether subscriptions will arrive in mail, he said. “You have to educate them about the process and that a package will be delivered.”

Remember that the Mexican market is different from the Cuban market. “We target regions of the country,” he said. “In California , we aim more for the Mexican family while in the Florida area, we target the Cuban population.”

The cultural markers can be overlapped with American themes. The Latino celebrates a background heritage, but also wants to be seen as an American who celebrates the 4th of July.

How do Latinos view key issues? They are more likely to focus on the economy and jobs to a larger extent than the general population — 90 percent compared to 77, he explained. Yet the second item on such issues showed they want improved schools compared to the general.

“They want to help with the drug use issue, and crime is a larger issue to this audience,” he said. “Be culturally authentic and appeal to the social issues of their home countries.”

How do they give? Half of the population contributes to charities while one-third reported volunteering time.

The most important item is to establish an infrastructure, according to Cain. For example, don’t assume because they answer a phone in English they know the language.

“We find personnel who not only speak the language, but also know the culture,” he said. “They write and proofread.”

Such a staff costs money, but Cain found, “if you’re willing to hire these people, you can make the effort work.”

Cain flags respondents to that answer only in Spanish. “The language of business is English, but the language of the heart is Spanish,” he said.

“The first item is to respect the population,” Cain said. “Treat them as you would want to be treated — don’t just go to tap into a new market.”

Tom Pope, a New York City-based journalist writes on management issues.

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