How Direct Mail is The Key to Acquiring New Donors in the GDPR-age

  • Published on September 23, 2019

Content Summary: (What you’ll get from this post)

  1. Latest UK charity direct mail open/response rates
  2. The ‘scientific’ reason why direct mail out-performs online fundraising methods
  3.  Strategies/Tips to help you overcome the two big hurdles stopping charities acquiring new donors today
  4. How to pass the Information Commissioner’s Office (ICO’s) ‘Compatibility Test’. Legitimately send direct mail to charity prospects WITHOUT obtaining explicit consent, while simultaneously building up trust.

But before getting down to the nitty gritty, it’s helpful to remind ourselves what exactly direct mail is … and what it isn’t.

Strictly speaking, the fundraising letter below, isn’t direct mail…

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Why?

Because it doesn’t meet the classic definition of direct marketing, which is:

It must be addressed to an individual person.

That’s not to say it’s ‘unconnected’ to direct marketing. It is, and in a major way.

Its primary purpose is to ‘solicit’ personal names and address details – details which are, of course, essential in order to kick the direct marketing process off in the first place.

And in that respect, this mailing does the job admirably. Who hasn’t suffered from joint pain at some point in their lives, or known a loved one who has?

Enclosing a survey for such a common medical complaint will, I’m sure, have delivered plenty of prospect names for fundraisers at Versus Arthritis (UK) to work with.

This appeal from Sightsavers, on the other hand, is classic direct mail marketing…

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The difference?

The first letter contains no personal details, i.e. a name and address. The second one does.

Internet fundraising is certainly here to stay – BUT – Direct Mail remains the ‘workhorse’ of UK charity fundraising

No question, the Internet is playing a bigger role in charity fundraising these days.

But just how big, and how significant, online fundraising is for charities is a moot question.

If we look at UK charity spending across all the major marketing media – on and offline – this is what we see.

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This graph, from a 2017 report on advertising spending from NFP Synergy, is important because it shows to what extent UK charities still rely on direct mail to elicit funds. The vast majority (56.4%) of the sector’s fundraising budget is spent on direct mail.

Interestingly, online advertising accounts for only 5% of spending.

Safe to say that Britain’s largest and most successful charities would NOT invest such vast sums of money in postal fundraising if it didn’t pay them to.

The chart, below, shows what typical marketing media response rates – for email, phone, social media etc – look like across all industry sectors.

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You can see that direct mail is a major player. But this only tells half the story.

When we look at direct mail performance for the charity sector only (below), you can see that when deployed to elicit donations, direct mail significantly outperforms commercial enterprises who are using it to sell products and services.

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For comparison:

UK charity sector = 12% Response Rate

All sectors = 3.7% Response Rate

Direct mail is X4 times more responsive when used by charities.

Also consider this:

There is a monetary glass ceiling to the amount of funds that charities can generate online. (Even the mega-charities don’t manage to raise more than about 10% of their revenue online)

No such limit exits with direct mail.

Counting revenue from direct mail donors who later convert to Direct Debit, 70% of the funding one charity I am working with raises each year emanates from direct mail.

That’ s not to say the Internet can’t play a role in charity fundraising.

When it comes to capturing leads cheaply for direct mail prospect lists, nothing beats it. (And in the final section of this article I’m going to explain how you can do this)

It’s all about Response Rates

Let’s do the maths.

12% response is equivalent to 1-in-8 people sending you a donation.

So, say the cost to your charity of sending out x1 appeal letter is £1.00.

And say the average donation received is £20. Then, for every £8 you invest, you will earn £12 in profit. (ROI = 1:1.5)

Then factor in the eventual Lifetime Value of new donors who, over time, donate more to your charity through regular giving, major gifts and even legacies. Suddenly that investment in direct mail looks an even smarter one.

Okay, you may say, that’s all well and good.

But …

  • Since the Olive Cooke scandal, people are wary of postal appeals. Right?
  • Trust levels in charities today are at an all-time low
  • Data protection barriers are making it extremely tough for charities to recruit new donors nowadays

How on earth do I get over these hurdles?

Insurmountable hurdles OR opportunities others just aren’t seeing?

The reality is each one of these hurdles can be overcome.

Next, I’m going to offer you several solutions to jump right over them. Some simple solutions which may be considerably easier to implement than you might think.

GETTING OVER THE HURDLES

1. Declining Public Trust in UK Charities

An investigation by the Fundraising Standards Board found that in the year prior to her death from suicide, 92-year-old charity supporter Mrs Olive Cooke got 3,000 requests for donations. Many of the charities she supported sold or swapped her personal details to other charities. At the time of her death in 2015, Mrs Cooke had donated to a total of 99 charities.

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Four years on from Mrs Cooke’s tragic death, research from CAF (Charities Aid Foundation) shows confidence in UK charities continues to decline, along with donations.

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The proportion of the UK public who gave money direct to charity in 2018 dropped to 57%, compared with 60% the previous year and 61% in 2016.

The findings will be unwelcome for charity leaders, who have been seeking to move on from the furore over trust and confidence sparked by unethical fundraising techniques, and revelations of sexual abuse at major aid charities, Save the Children and Oxfam.

Is Direct Mail part of the problem – or SOLUTION?

There can be no question that the charity sector’s reputation, along with that of direct mail, has suffered to some extent since 2015.

But are things as bleak as they’re being painted?

Popular perceptions rarely march in step with reality and even less rarely give a solid base for strategic thinking around fundraising.

For instance, when it comes to direct mail fundraising, the mainstream media certainly appear to be at variance with a large number of folk across Britain, huge numbers of which continue to respond to charity mail appeals week in, and week out.

Take a look at these very healthy direct mail envelope open rates:

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And this research, conducted by Royal Mail.

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Both suggest that rather than being the culprit, direct mail could be the stand-out marketing medium charities are looking for to bolster their brand and shore-up their donors’ support.

What accounts for the positive impression left by direct mail?

As part of their quest to answer this question Royal Mail enrolled neuroscientists at Bangor University to look at the impact advertising mail has on readers’ brains.

And the answer it seems is that direct mail activates parts of the brain other fundraising media (like email) simply do not reach:

  • The MRI scans they took showed that mail triggered emotions associated with positive motivation which online adverts (including email) simply couldn’t activate.
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  • This is because direct mail triggers more blood flow activity in the cerebellum (red area), a part of the brain associated with emotional understanding and motivation.

The more blood that flows into this area of our brain, the more sympathetically disposed we are to the message – and the organisation who sends it. Fact is, direct mail does a far better job of triggering positive states of mind in charity supporters than online media does.

With its high scores for ‘believabilty’ and making recipients feel “valued and appreciated”, direct mail is an ideal medium for building trust in organisations.

Whether it takes the form of a prospect mailing to recruit new donors, or a supporter newsletter (to help keep existing donors for longer), direct mail works because it’s more likely to be read by and motivate the people who want kept “in the loop” about the social problems you are solving on their behalf.

Add into the mix a few simple supporter care steps (below), and watch your organisation’s reputation grow.

Combining direct mail’s ‘motivational’ power with a few simple stewardship steps strengthens bonds with your donors…

Valued donors donate more and for longer.

Follow these THREE simple stewardship rules to let your donors know how much they mean to you.

FIRST RULE – Recognise donors’ contribution.

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  1. A MAJOR donor must receive a personal acknowledgement from a senior officer with each gift. This may be a phone call or a handwritten ‘thank you’ in a PS from the CEO on a donation acknowledgement letter.
  2. A NEW donor needs information to ‘deepen’ his/her understanding (and appreciation) of your organisation, and the problems its battling against. A simple Welcome Pack consisting of newsletter/membership card/ badge etc together with ideas for helping out should do the trick.
  3. TIP – Send X3 Newsletters per-year by mail thanking donors. Say what donors’ money has helped achieve – but NEVER use the newsletter to ASK FOR MORE MONEY.

SECOND RULE – Keep donors informed.

Charities tend to be built around important social ‘movements’ which often engender deep-seated connections with donors. For many of your supporters, your charity is akin to a big family. Close knit families share important news and developments. And charities should be no different.

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Let your donors know what’s happening, when you’re struggling, when you’re succeeding and what you’re planning to do next – just as you would your family. How much detail you reveal, through which channels, and how frequently you do so will, of course, be commensurate with each donor segments’ value and status – see above.

THIRD RULE – Act in donors’ best interests.

We have already seen how supporters often see themselves as part of a “charity family”. In any family, the most vulnerable deserve special protection. So…

  • DON’T SHARE donors’ personal details with other charities
  • DON’T OVER MAIL – Don’t exceed 7 direct mail asks per year

TIP: Use simple donor surveys (mailing enclosure or Survey Monkey or Telephone) to discover your donors’ AGE and the NUMBER of charities they are donating to. You have a red flag when a donor aged 70+ is donating to more than 10 charities.

Conclusion: Direct mail is the best communication tool out there to reassure your supporters that their money is safe in your hands, and is being spent wisely and ethically.

In the final analysis, poor donor stewardship, not direct mail, is what threatens to darken the reputation of charity fundraising. Far from being the problem, direct mail is very much part of the solution for winning friends and influencing people.

GETTING OVER THE HURDLES

2. Acquiring New Donors

You are probably not alone if you’ve scratched your head over GDPR. The overall consensus among marketers is that its precise requirements are far from crystal clear.

That’s especially true when it comes to when it’s permissible to recruit new donors.

What is certain, is this. When it comes to recruiting donors and complying with data protection law, far less risk is involved recruiting donors offline (with mail), than online.

That’s because under GDPR you do NOT need explicit consent to send fundraising appeals by post so long as you can show your charity has a legitimate interest (see below) for writing to prospects.

Of course, there are caveats. Such as:

  • If requested, you are obliged to remove anyone who asks to come off your mailing lists.
  • And you cannot use legitimate interests as your basis for consent if your charity already operates an ‘opt-in’ policy to obtain marketing consent, as Cancer Research UK and RNLI have done.
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Until such time that the law in this area is crystal clear – or at least clearer – the important thing to keep in mind is that the final arbitrator in determining what constitutes fundraising consent through any marketing channel is the Information Commissioner’s Office (ICO).

By sticking to the ICO ‘s guidelines, you’re giving yourself the best possible chance of interpreting the regulations correctly, and staying within the law.

Here’s what the ICO says about legitimate interests and charity direct mail fundraising:

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SOURCE: ICO, General Data Protection Regulation (GDPR) FAQs for Charities, April 2018 https://ico.org.uk/for-organisations/charity/charities-faqs/ 

And here are the steps the ICO recommend charities take to ensure conditions for legitimate interests are met.

  • When pondering if your use of people’s data is “proportionate” you may want to consider how often you mail prospects. Over-mailing may constitute a breach
  • When it comes to “minimal privacy impact”, think how controversial your cause or campaign is and whether it’s likely that a prospect receiving your mailing would welcome others (postman, neighbours, fellow tenants) knowing their connections to you
  • Someone who’s shown previous support for your charity, for instance – bought raffle tickets or merchandise, signed a campaign petition or volunteered for you – would most likely “not” be “surprised” or “object” to receiving a fundraising appeal through the post from the organisation he/she has previously ‘supported’.

The ICO’s handy checklist, below, helps organisations demonstrate that they have a lawful basis for marketing to prospects.

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TIP: Sign up for the ICO’s newsletter for the latest marketing consent updates here: https://ico.org.uk/about-the-ico/news-and-events/e-newsletter/

Once you have demonstrated your charity has a basis in law for mailing prospects – i.e. a ‘legitimate interest’ – you need to consider whether the names you’ve collected can be used for a purpose different to the one which they were originally intended.

Can you send fundraising appeals through the post to people who have ‘signed up’ for something else?

The answer is “Yes”, with a few caveats.

Here’s the European Commission’s (authors of the GDPR) take on the matter. (One which pretty much tallies with the ICO’s guidance, see here https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-the-general-data-protection-regulation-gdpr/principles/purpose-limitation/)

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Compatibility Test

Taking a campaign petition as an example, let’s look at each point in turn to see if a charity wishing to mail names collected on a paper petition could meet the ICO’s ‘compatibility test’.

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  1. “Link” between original purpose and fundraising

Possible Response: “Signing our petition indicated to us that you could be someone who understands the problems we’re trying to solve and might appreciate the chance to donate to our work.”

2. “Context” between original purpose and fundraising

Possible Response: “Finding solutions to the problem highlighted in our petition requires donations from sympathetic members of the public.

3. “Nature” of fundraising sensitive?

Possible Response: “Yes. We deal with political/ religious/ personal issues some may consider contentious and wish to keep private. Therefore we shall ensure that our outer envelopes are plain (contain no explicit slogans or images) to ensure our supporters’ views etc remain private. Or “No. The issues we’re concerned with are neither sensitive or contentious.”

4. “Impact” of sending fundraising mailings?

Possible Response: “Our supporters tend to be older, live alone and can be vulnerable. We have a fundraising contact policy which places a cap on mailings, ensuring supporters aren’t ‘over-mailed’ and pressured. We also investigate any unusually large donations we receive and return them if necessary.”

5. “Safeguards” to ensure privacy?

Possible Response: We have established a third-party privacy agreement with our mailing house partner handling our prospects’ personal data. All data transferred between the charity and mailing house is password protected.

TIP: You can legitimately use your website, even your social media posts*, to collect names and addresses for prospecting mailings. Macmillan do this on their site by offering free content (e.g. news updates) and opportunities to campaign on its behalf.

For instance, Facebook and Instagram ‘Lead Ads’ enable you to collect your supporters’ postal details online.

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Simply add a ‘postcode’ field to your sign up forms. Explain that if postal details are supplied, these may be used to send supporters funding appeals by post.

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Note: the only marketing permission that’s needed here is for sending out ‘electronic’ marketing messages (by email), legitimate interests takes care of the rest.

Conclusion: By demonstrating the compatibility between your donor acquisition mailings and the original purpose for which your supporters’ personal details were collected, you will not only stay well with the limits of the law, but attract considerably more prospects – and new donors – than you would by putting your faith in online media to recruit new blood.

Questions? Contact me direct at gordon@bloomfundraising.co.uk .



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