How to Fundraise Using Direct Mail

Fundraising

Originally Published:
June 10, 2020
Last Updated:
June 30, 2020

We have talked about the digital version of mail campaigns, but what about the analog version? Well, you are in luck, because we will be talking about the two main types of mail solicitation: Prospective and Re-solicitation.

 

Prospective Mail

Despite what you may think, direct mail is still a very effective way to raise funds. Don’t believe us? Just check your mailbox and see how many advertisements still come in the mail. Those advertisements come because the data shows time and time again that you gain more than you lose when you reach out via mail.

The reason for this is simple: sending mail (to the right people) is dirt cheap, quick and easy to do, and casts a wide net.

 

The Economics of Mail Campaigns

Let's start by talking about time and financial costs. If an average phone donation takes six minutes, you spend two hours a night making calls, and you make calls three times a week, over the course of a six-month fundraising drive, you will make 864 individual calls (and many of these will be repeats and follow-ups). During that same six months, you will have spent 144 hours (or six full days) making calls. Consider what your time is worth - even at minimum wage, 144 hours at $7.25/hour means that the call time “cost” $1,044. Throw in the cost for a phone at, say, $35 a month, and suddenly call time costs close to $1,250. Divide that by 864 and call time cost $1.45 per call.

Compare this to a mail piece. 1,000 multi-color letter/flyers from a corner print shop will set you back $400 - $600. Postage for those thousand pieces is $550, envelopes are another $40, and address labels are another $30. In sum, you will spend $1,220; divide that by 1,000 and your cost per letter is $1.22. Find a couple of volunteers to help you, and you can easily fold, stuff, and mail those 1,000 letters in a night.

But, if you sniff around, you may discover that you can get bulk rate postage from other friendly organizations and access to more affordable print shops. It is entirely possible that you can cut your costs by a third to half by putting in a little extra effort upfront.

Now, we wouldn’t tell you to abandon call time in favor of sending solicitations via mail, instead, we will tell you that call time serves a very different purpose compared to letters. Phone calls have a higher success rate of 5-15% and bring in more when they are successful, so they are targeted towards donors who may give more ($100 - $500 per donation). Prospecting Mail has a lower success rate at .05-3% and generally doesn't bring in as much, so they are perfect for lower dollar donors (people who may give $25-$100).

If you do the math, you can see that profit margins are thin. With that in mind, here are a few tips to help make sure you make as much money as possible.

  • It is much more affordable to buy a large amount of color letterhead at the start of your fundraising campaign and then print any particular donation letter using black ink instead of paying for full color in small batches.
  • To save time, and in many cases costs, ask if friendly organizations have purchased envelopes in bulk and if they have a postal scale/bulk rate that you could use.
  • Keep your letter to one page, single-sided, to reduce printing and mailing costs.
  • Multitask as you stuff envelopes - do it while you are making calls or just taking advantage of a little R & R.

 

How to build lists.

Now that the economics of mail campaigns is out of the way, lets talk about where you will actually find people to send letters to.

The cheapest way to build your mail donor list is to simply do your research. Nonprofits with similar missions might be willing to share lists with you while all political campaigns are required to disclose their donors. As you might guess, this route is very time-intensive.

If that thought is less than appealing, then buying formal lists might be more up your alley.

Obviously, purchasing lists will increase the cost of your fundraising campaign, but on the positive side, lists purchased from reputable firms tend to have higher success rates (after all, you don’t stay in business for long if you produce a poor product in such a competitive market).

Finally, always make sure you are taking a clip-board with you to the events you attend. This is a quick and easy way to build your mailing list and offers the highest number of possible successes as the people on these lists have specifically sought you out and shown interest.

 

So, what should go into your letter?

Your document is open and that blinking cursor is staring back at you. What do you actually write?

Well, have no fear, we have written about this before so we aren’t going to repeat ourselves word for word. But here is the shortened version:

 

  • Use a personal and casual tone
  • Write as if you were talking to them directly (Use “I”, “You”, “We”)
  • Leave “white space” and use short paragraphs
  • Speak urgently
  • Ask for specific amounts and tie it to results

 

Taking advantage of all of the tips listed above still doesn’t guarantee that sending out donation letters will result in a successful fundraising campaign - but this is only if you view this type of donation effort a “one and done” event. In reality, the real money from donation letters comes from the re-solicit.

 

Re-solicitation Mail

Re-solicitation is a key component of any fundraising method but never is it more important than in a mail campaign.

In all honesty, profit margins can be slim to non-existent on a prospecting mail fundraising campaign, but can be quite successful when targeting prior donors for further donations. Because of this, don’t feel down if your initial drive doesn’t rake in the dough. As we said, your response from an initial drive is .05-3%...but re-solicits can have a response rate ranging from 2.5-10+% and are cheaper to do.

Look at it this way: If you spend $1.22 per letter on an initial mail drive to 500 people, you will spend $610, on the high end you can expect 25 people to respond. If your average donation is $50, you will receive $1,250 - not bad, but, if you send a second donation letter to those 25 people, you will spend $30.50 and you can expect on the high end six people to respond back at an additional $50. This means that your total mail solicitations cost about $640 but you could make a total of $1,550. Target those 6 and you get 1 response back, you spend an additional $7.32 and receive one final donation of $50.

In short, sending re-solicitation letters to known donors is a quick, easy, and affordable way to quickly improve your overall return rate on mail donations.

Perhaps the most important tip we can give on re-solicitations in general, and on mail re-solicitations in particular, is the importance of record keeping; it is very easy to waste (and lose) money on a mail campaign if you aren’t careful.

Having an easy-to-use relationship management system is vital to success and FundHero is here to help you make sure you get the most out of your donors. To learn more please feel free to contact us today!