Direct-Mail Solicitations Reap Small Gains for Big Charities in 2004, New Report Says

Direct-mail appeals by big charities produced small gains last year, a new study has found.

At 40 large national charities, donations in response to direct mail rose by a median of 3.5 percent — meaning that donations to half the organizations grew more than that while half rose by less or declined — according to an analysis by Target Analysis Group, a Cambridge, Mass., direct-marketing consulting firm. That increase barely outpaced inflation, which was 3.3 percent last year.

The company examined giving by 28 million donors who made 48 million contributions last year totaling $1.2-billion to household-name charities, including the American Cancer Society, Mothers Against Drunk Driving, the Nature Conservancy, CARE, the Humane Society of the United States, and more than 30 others. Most donations were made through the mail, although the analysis did include a small amount of money charities received in response to telemarketing and e-mail solicitations.

The study found that many donors increased the amount they gave last year. The donation per individual rose by a median of 4.1 percent, compared with a 2.5 percent median rise in 2003.

Attracting New Donors

Even though direct-mail returns rose slightly, some charity fund raisers are worried about the future of the technique.

At Doctors Without Borders, one of the groups studied, officials said that the charity’s relatively young direct-marketing effort has the potential to keep growing, unlike those of older, more-established charities that have peaked in their ability to attract new supporters. On the other hand, “we got a lot of new donors because of the tsunami, and a lot of them are interested in South Asia and not in Doctors Without Borders,” said Mark Merritt, a marketing analyst at the charity. “There is more difficulty in getting them to give again.”

The analysis uncovered some other troubling trends for the future of direct-mail fund raising. For example, charities struggled to attract gifts from people who had not given for one or more years. Many charities have increased appeals to previous donors in recent years, but charities in the analysis obtained 4.4 percent fewer gifts from lapsed donors last year compared with 2003.

Charities that participated in the analysis also had trouble persuading people who made gifts in 2003 to give again last year. The organizations reported a median loss of 47.8 percent of contributors last year, up from 45.9 percent in 2003.

And, over all, the charities reported that the total number of donors who gave to their organizations in 2004 decreased by a median of 0.5 percent, following a decline of 1.3 percent in 2003.

“We have situations where they are just not growing, and they might be declining,” said John Mastrobattista, vice president for marketing at Target Analysis Group. “Most organizations are not predicting a lot of growth in direct mail,” he said.

Groups that report a heavy use of premiums in their mailings, token gifts such as pens, calendars, or address labels, had slightly more trouble keeping donors from one year to the next than other charities.

The analysis found that the 13 charities that frequently offer premiums lost 48.3 percent of their donors last year, while groups that seldom or ever used premiums lost 44.3 percent of donors who had contributed in 2003.

A free online summary of the research, “Index of National Fundraising Performance: 2004 Calendar Year-End Findings,” is available at http://www.targetanalysis.com.