January 30, 2009 | Read Time: 1 minute
In tough economic times, fund raisers often face pressure from board members and constituents to cut back on costly direct mail and telemarketing efforts to recruit new donors.
But short term gain can mean long term pain for an organization, warned Craig Finstad, assistant vice president of direct-response operations at the American Lung Association in a speech at this week’s Direct Marketing Association Nonprofit Federation conference in Washington.
He pointed to the experiences of one of his charity’s affiliates, which decided to stop spending money on recruitment efforts during the last recession in 2000. Over the following seven years, said Mr. Finstad, the affiliate’s donor pool declined by 70 percent.
Mr. Finstad also cautioned against making big changes to the format or schedule of direct-mail appeals in reaction to economic conditions or other external pressures without careful testing to gauge the potential impact.
For example, he said, after the postal service increased rates on big mail pieces known as flats, the Lung Association considered replacing a traditional large-format mailer with a letter appeal. But a test of 50,000 letters yielded an 11-percent decline in income.
“If we had just rolled out with the letter format at the volumes that we mail, nationwide we would have lost almost a half a million dollars,” said Mr. Finstad.
What has your experience been in cutting direct-mail appeals to potential donors? Have you found enough replacement revenue to make it worthwhile?
