It's a big world. There's room for differences of opinion.
For instance, I like apples; you like oranges. Neither of us is right or wrong as both apples and oranges are good for us. Just ask Michelle Obama. In lawyerly compromise, she'd probably say that a fruit salad is better than its component parts.
A similar either/or debate has been raging in the nonprofit world between the merits of donor acquisition by email or direct mail. Again, both sides have plenty to say, with avid proponents of each approach vociferously defending their turf.
So into this fracas fearlessly steps Blackbaud, a leading provider of nonprofit software. In its recently released 2011 Multichannel Giving Benchmarking Report, Blackbaud proffers its own analysis.
WARNING!! For those of you with an aversion to research studies—even really good ones—skip to the bottom of this article. I've synopsized it for you.
For those of you who want more in-depth knowledge, here are some of the high points of the study:
- Allowing that the internet is becoming an increasingly important acquisition tool, the study also says that its use is not widespread yet, though many new donors give their first gift online.
Duh! New donors trend younger. Younger people tend to use the internet more than older people. Hence the internet would be their obvious point of entry.
- DM is still the work horse for nonprofit marketing, with the typical nonprofit receiving more than 75% of its total gifts through DM and only 10% online.
So oldsters are still doing the heavy lifting. Figures. Other research shows that the average nonprofit donor is a 62-year old woman. She's sticking with mail.
- Most donors give through only one vehicle, and that vehicle is direct mail.
Don't fix it if it's working.
- DM is responsible for 75% of new donors; 16% of new donors arrive online.
As the population ages, this figure will probably equalize. But for the next 10-15 years DM will rule the roost.
- Online-acquired donors are significantly younger and tend to have higher household incomes than mail-acquired donors.
Makes sense. Onliners are still in their peak earning years. DMers are often retired, living on fixed incomes and husbanding their resources.
- Online acquired donors tend to give larger gifts, but have lower retention rates than mail-acquired donors.
Makes sense again. Previous studies have shown that online donors have less loyalty and tend to spread their donations around. That makes them appear flighty.
- Just under 50% of on-line acquired donors switch to being direct mail donors as their relationship with the organization deepens. But only a tiny fraction of DM donors migrate to online.
Yep. As their interest in and commitment to the organization increases, they want to know more—information that can only be conveyed in print.
- And while on-line acquired donors have higher value over the long term than traditional mail-acquired donors, that value depends on the original gift level. Furthermore, the higher gift amount can mask the lack of retention.
Previous research concurs. Online donors tend to give big, but only once, then move on. IF (big "if") an organization can keep their loyalty over the long term, they should be worth a great deal to the organization. It's a combination of age at buy-in, size of gift, and years of future projected income.
- Evidence of past multichannel giving is not a good predictor of future retention or long-term value. Traditional DM tracking variables (recency, frequency, gift amount) are far more successful at predicting an individual's long-term value to an organization.
At the end of the day, dance with the gal what brung ya.
So here comes Blackbaud's lawyerly compromise:
"It is the ability of online-acquired donors to... start giving through direct mail that significantly boosts the long-term value of this group of donors. The most successful organizations have integrated online and offline marketing teams and CRM systems to develop effective multichannel communication strategies that can maximize donor value."
OK. Here's the super simplified synopsis I promised.
Bottom line message for those of you who only read the PS on fundraising letters:
Direct mail is key to nonprofit donor retention and loyalty. DM remains the single best source for nonprofit donations.
Nonprofits report that 75% of their donations come in through DM and only 10% come in online.
Take-away action: Include direct mail in your nonprofit fundraising efforts. It works.
On some issues there is no difference of opinion.