Leah Eustace of GoodWorks Co. asked us to work with her on this post about why small shops (charities) are way more WICKED than the big shops… you’re more nimble, you’re usually not as silo’d, you tend to be a little more chilled and relaxed, you care for each and everyone of your donor more, you eat, breath and sleep philanthropy – and not that your counterparts at the bigger charities don’t – but we dig the entrepreneurial and “get ‘er done” spirit that exists far more often at the smaller shops. So here is our combined post of how you can be “Small and Mighty” – and thus far better to your donors and to your cause than most other shops.
Let us know if any of this information and thinking is useful and applicable… or please feel free to add your own small shop challenges and we can help you in a future post! Cheers. John
Recent estimates put the number of non-profits and charities in Canada at over 160,000. That’s a lot of organizations, and a very large and important part of Canada’s economy. But did you know that more than half are run entirely by volunteers? In other words, they don’t have a single paid staff person.
Collectively, we’ve worked with a wide range of non-profits, with databases ranging from a few hundred to a few hundred thousand active donors. What we’ve learned over the years is that ‘small shops’ can learn a lot from ‘big shops’… and vice versa.
Let’s start with some definitions. How do you know if you’re a small or big shop? We couldn’t find an official definition, so have come up with our own. A small shop has:
• Annual gross revenue of less than $500,000 (according to Imagine Canada, that applies to 87% of non-profits and charities);
• Two or fewer full-time fundraisers;
• Staff who are experts at multi-tasking (small shop fundraisers often leap from major donor calls to special events menu planning to counting pennies from coin boxes within the same hour).; and
• A donor file size of 2,500 or less.
With a file size of 2,500 or less, it becomes very difficult to conduct statistically valid testing within your direct mail program. But that doesn’t mean that small shops can’t learn from testing: they just have to look at what big shops have done and adopt some of the lessons learned.
So, for all the small shops out there, here’s what we’ve learned through the dozens of tests we’ve done within big shop direct mail programs:
• Four-page letters often get better response than two-page letters;
• Incorporate a sense of urgency and/or a timeframe (for example, adding ‘please reply by April 5th’ to your response device, or on your O/E, will likely increase your response rates);
• Stick to one simple straightforward offer (for example, including a an invitation to a special event within an appeal for an annual gift will likely confuse donors and reduce response);
• Larger envelopes almost always pull a higher response rate than smaller envelopes;
• Have a matching gift opportunity? Let your donors know about it and challenge them to participate;
• Use an ascending gift array (i.e., $35, $45, $60) rather than a descending one (i.e., $60, $45, $35);
• If possible, match your gift array to the donor’s last gift (if their last gift was $35, start the gift array slightly higher – 1.25x their last gift is a good rule of thumb);
• Larger response coupons often lead to higher response;
• Here’s a big one: handwriting rules! Have the signatory hand-sign the letters (this is something that’s virtually impossible for big shops to do, but is very possible for you to do), add a hand-written and personalized P.S., and hand-address your envelope. (you can get the help of volunteers for some of this). You can even get your President or Executive Director’s handwriting made into a font;
• Use a live stamp on your mailings (yes, it’s more expensive than third class postage, but we suspect you’d make that up in higher response rates and average gifts);
• You will get your highest response from donors who have most recently given to you (i.e., for a mailing you send in 2011, your highest response will be from donors who have given in 2011, next highest will be 2010, then 2009). If you’re instinct is to give you recent donors a break from giving, don’t do it!; and
• Stick to black text on a white background and use a minimum of 13pt font.
So, why not incorporate a few of these big shop learnings into your own small shop program? Try them out for a while and see how your response rates and average gifts compare to prior years.
Stay tuned for an upcoming article on what big shops can learn from small shops (this is a two-way street).
Leah Eustace, John Lepp, Jen Love