What’s in a name? A 22-percent increase in donations, based on a direct mail test, is the answer.
TechnoServe offers capitalism-based poverty-reduction assistance to people in developing countries. When its leadership wanted to increase its unrestricted funds, the Bill & Melinda Gates Foundation offered an asset at least as valuable as cash: The right to use the foundation’s name in a donor-match mailer.
“We decided, with [the Gates foundation’s] support and encouragement, to do some experimentation to see if we could increase the effectiveness of our direct mail approaches,” said Simon Winter, senior vice president of development of TechnoServe, based in Washington, D.C.
Winter teamed up with Dean Karlan, professor of economics at Yale University and president of Innovations for Poverty Action, a nonprofit that researches solutions to global poverty problems, both in New Haven, Conn. The two created a direct mail test geared toward evaluating the impact a name-brand donor has on spurring additional contributions.
TechnoServe sent nearly 115,000 fundraising letters to donors and prospects. That amount, which was somewhat larger than its typical efforts, allowed TechnoServe to conduct several creative tests. The most important of these weighed identifying the Gates Foundation as a matching donor against merely stating that an anonymous donor would give a two-for-one match.
The Gates letter beat every other version. While the idea of additional leverage helped, Karlan thought other factors contributed. “It is a quality signal,” he said. “If [small donors] hear some large donor that spends lots of resources figuring out where to give has given, then great.”
The irony is that this suggests it’s not about the match. Said Karlan: “It’s about the vetting process.”
Smaller charities, which don’t have a Bill or Melinda Gates to reference, should still try to enlist a recognizable match donor. “If it is a community-based organization, maybe there is a community leader who is that sort of high-profile, well-respected individual,” Karlan said.
This is, to a certain extent, what TechnoServe has done. While it still maintains a good relationship with the Bill & Melinda Gates Foundation in Seattle, Wash., the match offers in its current mailings are underwritten by its board of directors.