March 21, 2002 | Read Time: 4 minutes
As postage rates continue to rise, veteran fund raisers advise nonprofit groups to “mail smarter”:
Take advantage of U.S. Postal Service discounts and focus mailing lists more effectively to raise as much money as before with mailings to fewer people. The Postal Service plans to increase rates for all nonprofit mail by an average of 6.7 percent starting June 30, the third increase in a year and a half.
Among the suggestions:
Get rid of outdated and duplicate addresses. As a first step, charities should clean up their mailing lists, experts say. Richard M. Goldsmith, author of Direct Mail for Dummies, recommends spending a little extra money to take advantage of the Postal Service’s return-delivery option for undeliverable mail. This service, which costs 34 cents per returned piece, enables organizations to identify wrong addresses and delete them from their records. For 60 cents per piece, the Postal Service will also forward the mail to the correct address, if known.
The Akron Community Foundation, in Ohio, recently cut several hundred names from its mailing list of 6,000 by deleting undeliverable addresses. The community foundation’s vice president of finance, Steve Schloenbach, says the resulting savings “will probably absorb the increase in postage.”
Use computer analyses to predict a mailing’s potential. Charities that send a lot of direct-mail fund-raising solicitations, including Easter Seals and Disabled American Veterans, go even further to edit their mailing lists, using computer programs that help predict which donors are most likely to respond to appeals.
Using profiles derived from census information, the programs analyze such details as whether people were born in the state where they live, their level of education, and whether they own a home. Donors considered least likely to give are then dropped off the mailing list.
Help the Postal Service. Les Gordon, a fund-raising consultant in Everett, Mass., who specializes in direct mail, encourages charities to participate in what the Postal Service calls “worksharing,” in which organizations help reduce the amount of time and money the service spends processing a mailing. To be eligible for the discounts, charities must sort their mail by ZIP codes, transport it to postal facilities, or prepare it for automated mail-handling equipment by using such techniques as putting bar codes on it. In addition, he notes, charities can save money by using cheaper mail classifications, such as third class instead of first class, and by sending letter-size envelopes instead of larger ones.
The very largest groups have long used these techniques, but smaller groups are still experimenting with them.
America’s Second Harvest, which sends about 6 million pieces of fund-raising mail a year, may send more of its letters by third-class mail instead of first class to save money. Terri Shoemaker, manager of direct marketing, says she believes the shift to third class can be made without hurting the percentage of people who make a donation. “Even with bulk mail you can still use what looks like a stamp,” she says.
Charities can also consider drop- or destination-shipping techniques. This involves sorting mail by geographic region and hiring a private carrier to truck it to one of the Postal Service’s Bulk Mailing Centers, which process mail for large regions; to the Sectional Center Facilities, which process mail in a metropolitan area; or even to local post offices. By trucking mail closer to its destination before the Postal Service handles it, charities can reduce postage costs, say direct-mail experts.
But all these steps may not be enough to offset postal increases. “Last year, I saved a quarter of a million dollars by destination shipping,” says Kelly B. Browning, executive vice president of the American Institute for Cancer Research. “But that’s just a 3-percent reduction,” compared to this year’s average 6.7-percent postal-rate increase. Mr. Browning says his organization, which has a total budget of $40-million, spends about $8-million a year on postage.
To cope with this year’s increase, Mr. Browning has winnowed the group’s list and is planning to reduce mailings by as much as 20 percent. But at the same time, he is looking at alternatives to postal mail, such as e-mail. “The pressure is getting so great to find ways to conduct business apart from the Postal Service,” he says. “We can’t survive these increases that much longer.”
