What Are You Going to Do at Year-End?

By Jack Doyle - President, Amergent

In many cases, organizations are struggling to keep income up at prior years' levels.

By the time you get to "fundraising crunch time" (Fall) you'll have one last chance to inspire donors to come through in a big way this year.

You know it's your best time of year to raise more money. So what are you planning right now to do differently than last year, to increase your fundraising at the end of this year?

Many experienced fundraisers agree there are four major areas that impact the success of a direct mail fundraising appeal… the offer (reason to give), who you ask (list select), the package format (design, copy, components maximized for response) and when you ask (timing and frequency).

Let's consider some of your options for your year-end fundraising mailings. We're referring to mailings that will generate income for you in the 4th Quarter of this year, during the months of October, November and December.

For some organizations, half of their annual income is produced in these three months.

It's essential you maximize the number of quality contacts you make with your donors at this time of year because this is when the majority of all donors are most likely to make additional gifts. This is the season of giving.

Donors are looking to fulfill their desire to do good, to help make the world a better place. They may want to change things, or provide for those who have nothing. The point is, they chose to help you at some point and now you must reinforce that they did make an impact and it's time to help once again, maybe for those same purposes.

The best strategy to follow is to nurture each donor relationship and to help the donor feel good about their support. You're offering them a way to take action on something that is important to them.

The enlightened organization understands there's a point in every donor's life, where giving back and making a positive impact on others becomes a very real priority. This is the point where your fundraising opportunities serve your donors' needs. Your year-end appeals can play a powerful role in fulfilling these priorities.

Why do you think most of your donors are over 50 years old? It's not just disposable income. A lot of people have disposable income all their lives, but don't share it until they hit their stage in life when they feel the need to do good.

What are the questions to consider when composing the year-end appeals?

• Why are you going to ask for their support?
• What do the donors believe you do best?
• What's their #1 reason for giving you money?
• What impact will their giving have?
• Why do you need their money?
• How will you spend it?
• Who do you serve?
• What essential and/or unique services are associated with your organization?

All of these will influence the campaigns you create. But to be most successful, you need to convey your offer/need in the donors' context, not your organization's. What does this mean? It means, speak to the donors on their terms. Reinforce what they believe about you and the impact their support has on the people you serve.

There are core beliefs your donors hold about you, and they might not reflect all you do. Be aware of what they give you credit for and stay within their comfort zone at this time of year. Success in fundraising at year-end can be as simple as getting a large number of gifts from those who have been loyal to you before. But to achieve that, you need to ask them to give you money for purposes they think are important.

Is year-end a good time to test and introduce new programs and funding needs, since most of your donors are going to make their only gift of the year? Our answer is: only in years when times are good, and this year is not one of those years. For this year, when times are tough on many fronts, we suggest you stick to what your donors believe are your basic, core programs and needs. Look at what the donors have responded to in the greatest numbers over the years and give them a steady diet of proven favorite offers and needs, updated to reflect what's happening in your organization this year.

We call this being donor-focused. Now you're marketing to fulfill donors' needs and to reinforce what they believe about you, and most important, how they fit into the relationship. Now you can tell them how important they are to fulfilling the mission you both have chosen. This serves their needs as much as it serves yours.

Your organization's core values show how you faithfully fulfill your mission. Your fundraising messages and offers to donors for their help must show how they make it all possible. Donor-focused communications never forget the donor is the #1 priority. Let the donors become passionate advocates for you. Let them talk about what you do. Keep them informed and inspired.

Every communication allows you to deepen the relationship just a little more.

Who should you ask to give at year-end?

It is true that you can mail cost-effectively to more people at the end of each calendar year than at any other time of the year. That's because the majority of donors out there only give once per year, and it's at this time. So you're probably going to mail to more low-dollar donors, and more lapsed donors than you normally do. But the majority of your gifts and revenue will come from donors who have given at this time of year in previous years.

So how should you target your list selects to maximize every budget dollar available? Here are some suggestions:

• Analyze the gift history file and score every donor who ever gave between October 1 and December 31 during every year you have on file. Keep a batting average… has the donor given in the 4th Quarter 8 of the 9 years on file? Keep that score. It's just as important to know which donors are 0 for 5 years in 4th Quarter giving, etc.
• Rank the donors with a history of giving in the 4th Q; integrate this score into your selection process (ask us and we'll work with you). This business practice should be applied to both your active donor file and your lapsed donors.
• Make sure all the sustainer donors, monthly club members, sponsors and the like are included in the mailings; these people represent your most loyal constituency and should be asked to help in an additional way to overcome shortfalls.
• Look over who's left, people who have never given before at the end of the year. Among them, you'll have frequent givers who are active and generous. Use any number of your RFM tools to rank them based on: the number of gifts they've already made this year, the size of their last gift, and the number of gifts they've made to your organization in their lifetime of giving.
• Some people will not have given in the 4th Quarter simply because they haven't been a part of your constituency for long; others will have a long history of giving at other times of the year. You should message appropriately to people based upon their pattern of support and suggest why they may want to give at this time to help you close out a tough year; indicate you know this isn't their normal time to give.
• Sort through your lapsed donors to distinguish longtime friends from one-gift wonders. You've already flagged the lapsed donors who've given before in the 4th Quarter, so that's a good start. Now take all of them and rank them by a combination of: 1) their lifetime giving, 2) their most recent gift amount, 3) the number of annual gifts they made in 4) the last year they were active. This helps put the lapsed population into manageable populations for selection purposes and increases your cost-effective use of every budget dollar.

Technology is a mixed blessing. It has made us all a lot more effective, but it can also be misused. For example, some people focus too much on the project profit and loss metrics, mailing only donor segments that are certain to produce net income. These well-meaning folks sometimes lose sight of the big picture – the number of gifts and donors they need to produce for the entire year, to raise more money.

Too narrow a focus on mailing projects produces efficient revenue to cost ratios for the current year and maybe two years. But this is too often at the expense of the long-term financial health of the program. The outcome is fewer active donors, an ominous result.

Technology is a wonderful tool when it's used to deepen the relationship with each donor, by conveying personal information about the donor in an appropriate way.

When you can assure a donor that you know who they are, and what they've done for you (recently, and over the years) you've conveyed a valuable and comforting message. This is particularly effective when you can acknowledge their prior support of a specific appeal – when they have it in their hands again this year.

The recognition and appreciation you are able to convey at this point are great motivations for giving again – because you make donors feel special. This is true for both active and lapsed donors!

What's the benefit of segmenting your file based on historical giving patterns? You can redirect the budget away from unproductive donor segments and build up a budget surplus that can be used for additional contacts to those most likely to respond in the 4th Quarter. This is one practical way to ensure a more productive year-end. You're not likely to be able to find extra budget dollars to spend this year, so you better redirect the budget you have where it will produce the most income for you.

The overall goal in all of these suggestions is to help you renew as many prior donors as possible now, in order to give you a large active donor base to start the next year. This is your foundation for increasing your annual income for the future. The key is the number of active donors you have… the gifts and dollars follow.

What kinds of package designs are you going to send them to maximize response?

There are a number of issues to consider here, to maximize income generation:

• An increased use of personalized techniques are called for, not high-pressure tactics. You need to renew the support of every friend you have, so sincerity is needed.
• Messaging that reinforces the good that donors have done and that informs them of their previous pattern of support at this critical time of year.
• Clear and effective copywriting is essential; stay on target with your message throughout the appeal(s). Inspire the donors to give. Make them feel good.
• Clearly identify who you are; this is a very competitive time of year and it you should help your donors know it's you. Display your name and logo proudly.
• Reply device designs and calls-to-action need to be clear. State exactly what you want the donor to do and what/who their gift will help.
• Handwriting goes a long way to distinguishing your mail from the rest; handwritten fonts can be effective especially with donors you're trying to renew.
• You need to constantly thank donors for their loyal support; and you need to acknowledge their recent giving and be ready to pull the 1-gift annual donors once their gift is in hand.
• 9 times out of 10, increasing response requires you to spend more per package, not less. Attempts to cut costs all year long are admirable; but when you need to maximize response, spend the money effectively and you'll reap the rewards.

This last issue may be the most important for this year. You need more income now than ever before. You're soliciting donors who, as a group, don't have as much to spread around this year as in past years. They'll know who's skimping on them and who's showing a genuine appreciation for all they've been able to do over the years.

Which way are you going to treat them? Are you doing everything to maximize donor retention for the year? For nearly half of your donors, this is the only time of the year they are going to consider giving to you. Have you done enough to retain these donors?

Our advice is to use every contact this year to reinforce how much you appreciate your donors and ask them to find a way to help you at a level they've been willing to contribute in the past. Upgraded amounts may be offered on the reply slips, with appropriate low-key messaging to suggest higher gifts would be really appreciated. Offer to have people call you if they want to discuss making a larger gift.

At year-end, a renewed gift at last year's level is a win and should be your goal.

Part of your year-end strategy should be to take a look through your inventory of successful packages and determine what has worked best for you. Determine which of these work best for you in the 4th Quarter: consider using them in an additional appeal or two during the last three months of the year if you have great packages, centered on your core values, that are always winners with your donors.

Is your communication style donor-focused? Do you talk a lot about the needs of your organization? Do you write to make your donors feel special? You're dealing with human beings who want assurances that whatever they share with you makes a difference. We need to be careful to convey, that in fact, every gift is appreciated. Every donor makes it possible for us to faithfully fulfill our mission. We need to serve the donors' needs in order to sustain and deepen the donor relationship into the future.

Think of every possible way to match up a popular high-response package with the donors most likely to give. If you're planning to send an upfront premium package to <$25 donors who give regularly in the 4th Q, you might want to give them a couple of different packages during that three month window to maximize the number of gifts they send.

Follow-up mailings of your most popular appeals sent to donors with a preference for giving at year-end usually produce a win-win scenario for all parties.

The last issue we raised was timing and frequency.

Regardless of when you have always mailed in prior years, plan to start your fall fundraising season earlier than last year, because you're going to need to fit in some additional quality contacts to the donors most likely to respond. Yes, you receive complaints from donors that they receive too much mail. That's true. But you can't manage for the good of the entire program based on the complaints of a few.

Most direct mail fundraising programs have this in common; about half of your donors give only one gift per year and the overwhelming majority of them make that 1 gift during October-December. Many of these 1-gift donors promise they'll give you an annual gift if you reduce the number of times you ask. They say they'll give at year-end.

I've never seen a program that renews at least half of their 1-gift per year annual donors.

The sad truth is, many of the donors who gave at year-end last year can't be counted on to renew their support without a lot of work on your part. Don't take their renewal gift for granted because they indicated they would give at year-end; they will disappoint you.

Target all the 1-gift and year-end donors for special treatment and nurturing and you'll generate a lot more support than if you don't. This might require you to drop them out of a mailing or two during the spring or summer so you'll have some budget to invest in an extra couple of contacts during the season they prefer to give.

Many donors have a preferred season of giving; it's when they have repeatedly responded positively with a gift to one of your appeals. You need to know every donor who has this year-end pattern in their giving. It's a strength to know this and to know how to message appropriately to donors so you show you understand their preferences.

Some people may have trouble with the idea of mailing more to donors in the fall, when they are most likely to give. You feel you already mail too much. You are right, but I would suggest that you are mailing too much during the other times of the year when most of these year-end donors have never given.

Mailing more times to some of them in the last quarter of the year gives them more opportunities to pick an appeal to respond to and puts you in a better position to renew the maximum number of 1-gift annual year-end donors you can possibly get.