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Finding success with direct mail: How to refresh your annual fundraising letter

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Dear < insert your name here >,

“Lauren” is a development professional at a small to medium Canadian nonprofit, where her responsibilities include writing an annual fund letter to donors. She knows that studies show that 77% of organizations with an annual fund campaign meet their fundraising goals as compared with only 57% without an annual fund. She is also aware that annual funds help maintain donor loyalty. But Lauren struggles with the fact that in the last five years, donor direct mail participation has declined by 19.5%. And at the same time, Lauren faces increasing pressure from her ED to raise steady funds for their programs through the annual fund campaign.

And Lauren is not alone. Thousands of development staff at nonprofits and charities across Canada face the ongoing and vital challenge of communicating with donors while raising annual fund dollars each year.

These people need help. Particularly in a climate where more and more requests are made by an ever-increasing number of nonprofits across the country, fundraisers like Lauren face the daunting task of communicating in a fresh way to their constituents.

And here’s where CharityVillage can help…



All joking aside

The reality is that fundraising professionals do find it challenging to write annual fundraising letters, and are often unsure whether to stick to the tried-and-true approach or to attempt something fresher and riskier. We talked with a variety of fundraising professionals to understand both the realities and challenges of the annual fund campaign.

Annual funds

An annual fund direct mail campaign is an effort to raise funds expressly for an organization’s current year’s operating expenses. It also helps build up a database to track giving patterns, reminds donors to give again to your cause, brings in new donors, and, most importantly, stewards donors by helping them understand the impact and value of their donations and encouraging them to increase the amount or frequency of their donations. An annual campaign is often called the “bread and butter” of an organization’s fundraising strategy but can be challenging when organizations make a big investment in these letters — sometimes with little return.

While Fraser Green, Chief Strategist & Smartypants of GoodWorks Co believes the fundamental formula of an annual direct mail letter is unchanging (It should describe the problem, offer a solution, establish your credibility as the best provider of the solution, and ask for money), he also believes the fundraising climate has changed: “The days of industrial fundraising are gone. Donors today are more sophisticated.” Fundraising researcher Penelope Burk agrees: “There are ten times as many charitable organizations and donors are much more strategic and discerning. Our annual appeals need to evolve too to meet donor preferences and to take changing communications into account.”

And this evolution needs to be ongoing. Tom Balke, Associate Director, Strategic Initiatives, UBC Faculty of Science, says today’s donors are far more savvy in terms of what they are looking for when making charitable giving decisions. As Burk adds, “If you come up with better way of doing things, it will be different again in two years. Business and communication are evolving faster than ever.”

So what’s wrong with annual letters?

A four-page letter with 20 asks and four PS messages did the work forty years ago, says Burk, but everything is different today. Fundraisers used to have the luxury of delivering an elevator pitch, says Green, but today they need to develop a pitch that can be communicated in the time it might take two people to pass on escalators.

Donors are put off by many annual campaign letters, reducing both response and renewal rates, says Burk. “Annual letters are often either banal or aggressive. Their content is so non-specific that the donor can’t get a clear picture of what would happen with their contributions if they were to give.” Burk’s research has found that more than 70% of chief executive officers want their fundraisers to raise as much money as possible unrestricted, but that most would make a different decision if their fundraisers brought them reliable evidence that restricted (designated) asks make more money.

These annual fund letters can even bore their own writers. As Jill Pranger, ACFRE and president of Pranger Philanthropic, says, “If you are bored by your annual fund then chances are your donors and constituents are too.”

Balke observes that organizations tend to use in-house terms — such as annual fund — that donors would never use, and which discourage their involvement. One organization Balke worked with had a 55% increase in annual fund donations when they replaced the term general fund with strategic priorities fund. He also advocates that organizations find ways to creatively (and truthfully) communicate how money will be used. Rather than asking a donor to fund overhead salaries for finance staff, for instance, Balke suggests describing the impact of such donations: “making sure our programs have access to timely financial advice and support.”

Should you stick to the tried and true or try something new?

The experts were talked to were divided on this. Burk advocates for mixing things up a little. “Crafting annual fundrising letters that follow a template is a problem because it makes too many organizations’ appeals look and sound the same, and that misses the point. Great annual appeals make your cause stand out from, not blend in with, the competition.” Balke agrees: “Donors become habituated in response to a great deal of our communication. I always stress shaking communications up a bit so that there is a fresh look and new material each year.”

On the other hand, Vanessa Chase Lockshin, nonprofit consultant at the Storytelling Non-Profit, cautions that making too many radical changes all at once can cause a negative response rate from donors who are used to a certain approach and brand from an organization.

“The right approach is neither the fresh one nor the traditional one: it’s what donors respond to,” says Green. “We make the mistake of thinking from the inside out, rather than parking our egos at the door and thinking from the donor’s point of view.” He adds that frequency of communications only becomes an issue when communications contain nothing of value to the person on the receiving end.

Inspiring donors

Fundraisers can achieve their goal of moving donors to higher levels or more frequent contributions while helping donors achieve their own goals of making an impact or a meaningful difference in the world by inspiring them.

Burk notes that different individuals are responsive to different cues. “Some donors prefer evidence-based business cases; others are more inspired to give by anecdotal stories that bring to life a program or service within a more emotional appeal.” Green believes an appeal to both heart and head is necessary. “The heart creates the impulse to give. Once you have that, you can move the donor’s head in terms of how much to give.”

Balke cautions that it is vital that stories aren’t exploitative, particularly of program recipients.

It can be challenging for fundraisers to know which stories are the best to tell but Chase Lockshin says, “A story’s power comes from its ability to connect with its audience. You have to know your donors — their values, motivations for giving and demographics. This is where talking with donors about who they are and why they give is a great way to both build relationships and understand donor motivation." Balke also says that conversations with donors can yield content to be included in appeals — a top 10 list of reasons for giving in the donors’ own words, for instance, can say great things about your organization that you cannot say about yourself.

Green emphasizes the authenticity of stories: “Keep coming up with something real and human that your organization is doing to make a difference — and tell that well.” He cautions that too often we try to repeat past successes or to make something sound urgent where there is no story, but that there are always good stories for nonprofits to tell. “A big part of our job as fundraisers is be on the lookout for great storytellers and stories.”

At the same time, this doesn’t always require professionalization around direct marketing, cautions Burk, who says “not-for-profits need to take more direct responsibility for content, what works and what doesn’t, and get back in control of their annual fund campaigns.” Chase Lockshin encourages fundraisers to actually visit their organization’s programs to see and hear good stories. Balke finds stories and high-impact quotes from beneficiaries of charitable activities, board members and volunteers.

Segmentation and testing

All our experts strongly advocate for testing different approaches. This begins by knowing your donors and segmenting them if you can. You can then solicit them differently in terms of content, tone and delivery method, says Burk whose research finds the most striking differences in giving preferences and attitudes among donors in different age groups. She adds, “Constant testing is a must in order to see what content, language and style are working most effectively. Finally, maintaining his/her objectivity is a fundraiser’s greatest asset. People who raise money should always be testing alternate approaches and then asking themselves, Was this appeal that raised more money a fluke or can it be directly attributed to my new/different approach?”

End of year and other urgencies

People respond to urgency, says Chase Lockshin, which is why real deadlines — such as the end of a calendar year — are crucial times for raising funds.

Many organizations receive more than half of their funding in the last two months of the year, says Balke, which is why he recommends that nonprofits always ensure someone is available to receive donations by phone during the last few weeks of December. He also encourages nonprofits to send out carefully targeted multiple year-end email blasts during the last week of December, updating potential donors with your progress toward your target and offering matching fund opportunities.

There are other key times in the year for issuing appeals, depending on your organization. Easter is a critical giving opportunity for Christian nonprofits while other key windows for appeals include the back-to-school season and Thanksgiving.

Offering matching funds for a limited time is another way of creating a sense of momentum for donors.

While Burk cautions that “electronic over-solicitation is entirely counter-productive”, Chase Lockshin observes that it takes a significantly higher volume of emails than people think for recipients to notice. She does caution that organizations should slow down and space out their communications after an email blitz, such as one at the end of the calendar year.

More tips for fundraisers

  • There’s often a generation gap between the person asking and the person giving, says Green. Whether it’s font size or not writing over a coloured background, make sure your communications suit the donor’s preferences and not yours.
  • Make sure communications are easy to read in terms of comprehension, says Chase Lockshin. Use simple, colloquial words, shorter, clear sentences and easy to read paragraphs, especially for older donors. At the same time, beware of talking down to millennials and Gen Xers!
  • Learn how to manage up, advises Burk. “Your boss who is not a fundraiser has assumptions and controls the budget." Learn to state your case internally so you can test new ideas.
  • Burk’s research clearly shows that unrestricted general asks frustrate donors who want to know an organization’s priorities, while, on the other hand, donors can be overwhelmed by appeals that offer too many donation options. What achieves the best results is focusing the appeal's content on the organization’s number one priority. Being able to sell a specific program that is a priority for the organization also allows fundraisers to write much more creatively and persuasively. It’s a win-win-win situation – more donors respond with more generous gifts; the organization raises more money; and the fundraiser is more excited about doing an even better job the next time.
  • Thinking about enclosing a keychain or another trinket? Think again, says Burk, whose studies have shown that while an annual appeal with a trinket raises more money, that money comes from elderly donors who respond out of obligation and guilt. Younger donors feel furious about the symbolic waste of money. She reminds nonprofits that what makes money for a direct marketing firm or a trinket supplier isn’t always what makes money for the nonprofit.
  • Cheesy can sometimes work for you, says Chase-Lockshin, but it has to fit with your organization’s voice. She recommends fundraisers go to for examples of fundraising innovation and inspiration.
  • Although it’s called an annual fund, it needs to be part of your messaging throughout the year, says Balke, who reminds nonprofits to make sure their annual campaign is clearly recognizable on the splashpage of their website as well as being integrated into their social media channels.
  • If you wouldn’t like it done to you, says Burk, it’s guaranteed that donors won’t either.

While annual fund donors may not offer the return of a major donor's planned giving or legacy gift, it is important to treat every gift as crucial, timely and significant, no matter the size. Careful attention to the annual fund letter is a key way of building a strong relationship with your individual donors.

Susan Fish is a writer/editor at Storywell, a company that helps individuals and organizations tell their story well. She has written for the nonprofit sector for almost two decades and loves a good story.

Please note: While we ensure that all links and email addresses are accurate at their publishing date, the quick-changing nature of the web means that some links to other websites and email addresses may no longer be accurate.

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