Now that 2016 has ended and all of the data has been collected, we can see how direct mail fared during the year. And as with almost anything, there is good news and bad news….
The bad: Direct mail contributions from individuals fell, though by less than 1%, when compared to the prior year.
While direct mail still makes up the vast majority of charitable giving from individuals – accounting for nearly ¾ of all donations in 2016 – direct mail contributions have decreased for the past four years. This trend can be discouraging; however, there may be a silver lining. Direct mail contributions fell 4.5% and 5.5% in the two previous years, so 2016 does represent improvement – a less than 1% decrease is essentially flat year-over-year.
The good: Some sectors saw growth.
Although total giving was down, some charitable sectors such as political/advocacy and conservation groups saw growth. Online giving also increased for charitable organizations in 2016.
Understanding the trends
In part, decreased direct mail contributions are caused by decreased direct mail appeals. Acquisition programs have seen slashed budgets, and prospect lists are targeting only the hottest prospects. This is hurting the entire donor pool because new donors are coming on less frequently and being contacted by more organizations. All of this suggests a need for nonprofits to improve fundraising and focus when communicating to their donors.
While it’s true that there were some struggles in 2016, we saw charities in every sector grow year-over-year. Here are three things every organization should note:
1. New donors are key.
Acquisition seems like the first thing to go at any sign of trouble, but it really drives a direct mail program. The giving pyramid is dependent on acquisition as the base, feeding into your donor pool. Even with fantastic retention, a file can only shrink if acquisition is cut. This may give a short-term revenue boost but will cripple a direct mail program in subsequent years.
2. Multichannel marketing is on the rise.
Online giving has continued to grow year-over-year, but data continues to show that a donor is most valuable when being reached from multiple channels. This means that if you really want the most out of your donors, you shouldn’t abandon direct mail for online fundraising. The best choice is to reach donors through both channels to improve their likelihood of giving and increase their lifetime value to your organization.
3. Improvement is necessary.
One thing these trends tell us is that our donors want more from us. It’s vital that we do everything we can to cater to their needs and improve their experience. This can come from more personalized appeals, the multichannel approach, etc. In a recent post, Innovairre discussed the importance of testing. Not only do tests improve our data, but they serve as indicators of donor preferences that can be used to improve the overall donor experience.
2016 had some ups and downs, but in the end there are plenty of reasons for optimism. It may take some effort, but if we can learn from last year, then 2017 will prove a great success for many wonderful organizations.
Mark Schulhof is Chief Executive Officer of Innovairre Communications, which supports more than 500 nonprofit organizations around the world. Contact us at Answers@Innovairre.com, and follow us on LinkedIn and Twitter.