Which Is Better – Direct Mail or Online Fundraising?

Plus: 6-Step Multi-Channel Donor Action Plan

It’s a common belief that direct mail fundraising is more costly and less effective than digital or online fundraising. People say ‘direct mail is dead.’ The proper response to that assertion is – show me the data.

Image by Arek Socha from Pixabay

If they looked into it, most would quickly discover that the data says the opposite. Not only is direct mail fundraising alive and well, but it regularly outperforms digital fundraising in all its forms, whether that’s email, social media, or online ads.

But – the reverse is sometimes true as well. For some nonprofits, digital fundraising outperforms offline fundraising. So which is really better then?

A ground-breaking study from NextAfter reveals the answer:

Doing both forms of fundraising is far better than doing either one in isolation.

Get access to the full NextAfter study here, The State of Multi-Channel Donor Communications.

It is a profoundly revealing report with tons of data acquired by testing their own clients. They gave $20 to 102 organizations, both online and offline, and monitored the responses. Then, they received additional fundraising data from each organization so they could compare the effectiveness of both approaches.

Before we get to the details, let’s clarify some definitions.

What Is Multi-Channel Fundraising?

The study defined multi-channel fundraising by grouping donors into four categories:

• Donors who only give offline
• Donors who only give offline but also receive emails from those same nonprofits
• Donors who only give online
• Donors who give both offline and online – multichannel donors

So, if you are only sending emails, or only using emails, social media, and other forms of digital fundraising, then you are using just one channel of fundraising. The same is true if you are relying only on direct mail and other offline channels. And this includes phone calls, which the study included in their data.

The study didn’t get into this probably because it would have added too many variables, but other channels of fundraising could include live events, radio and TV ads, print ads like magazines and newspapers, and giving circles.

But because the data shows how much more effective multi-channel fundraising is than direct mail or online fundraising on their own, it is not a stretch to conclude that adding even more channels will increase response even more. But you may have budgetary limitations, especially with TV.

Statistical Data Comparing Direct Mail to Online Fundraising

Let’s look at some of the specific data from the study.

Their overall conclusion was that multi-channel donors are worth three times as much as online only and offline only donors.

Let that sink in.

Multi-Channel Offline Donors Give 84% More

Image by PublicDomainPictures from Pixabay

For instance, that second category of donors listed earlier included donors who only give offline, but who also receive fundraising emails. Those donors were found to be worth 84% more than the ones who only received offline communication (see chart below for actual numbers).

So, these are donors who never give online. They only write checks. Perhaps this could also include the few who call in and give credit cards over the phone. But these donors do not respond to emails or visit your website to donate.

But – just by receiving emails from the nonprofit – they gave 84% more than donors who only received direct mail.

67% Retention Rate for Multi-Channel Donors

The study also found that donor retention was higher for multi-channel donors than either direct mail or online donors. And this was true for all ages of donors, from young to old.

Direct mail only donors were retained at 43% in the study. Online only donors who gave a second time totaled just 36%. That third category of offline-only donors who also receive fundraising emails had a 56% retention rate – again markedly higher than those who only receive direct mail.

But multi-channel donors were retained at 67% – far higher than all other categories.

Multi-Channel Donors Give Way More Money

Here is the actual money given by donors across the four categories listed earlier.

Donors who only give offline:         $159 average revenue

Offline Donors who receive emails:       $301 average revenue

Donors who only give online:       $148 average revenue

Donors who give both from direct mail and online appeals:       $494 average revenue

Note that, to settle the original question of direct mail vs online fundraising, offline donors in this study do give a bit more than online donors. However, because direct mail fundraising is more costly in most cases (though not always – you can waste a pile of money in lousy online advertising if you don’t know what you’re doing), the net revenue from direct mail may or may not be higher than from digital fundraising.

But the overall conclusion is clear: It’s not even close. Multi-channel donors give three times as much as donors who only give from direct mail or online fundraising.

Missed Opportunities: How Should Your Nonprofit Respond to This Data?

Your response should be to make it a high priority to use more than one media channel to reach your donors. The NextAfter study looked into this data too, and what it found was disturbing.

Only 3% of the organizations in their study were using multi-channel communication for all their donors. That’s bad. A lot of money is being left undonated.

Here are some ways the study revealed that nonprofits are leaving money on the table:

• 20% of nonprofits sent no communication to offline donors through 4 months after a donation was given
• 50% of organizations who did send emails to offline donors did not ask for a gift
• 25% of donation pages did not provide a way for a donor to leave their phone number
• Only 81% of direct mail appeals included a website, but 66% just gave the home page
• Only 28% of direct mail appeals asked for the email address of the donor

Do you see all the missed opportunities in these statistics?

Ask for An Email

Image by Roy Buri from Pixabay

It does absolutely no harm to ask for an email address in a direct mail appeal. You have literally nothing to lose. The worst they can do is leave it blank. So what? Every donor who supplies an email can now be communicated with through two channels.

And as you’ve already seen, that puts them in a category that gives 84% more than offline only donors.

Ask for a Phone Number

Likewise, you lose nothing by allowing online donors to supply their phone number. Digital fundraising data has shown no negative impact on donations by including an option to leave a phone number. But be careful, because the data does show a lower response when you require the phone number online. So don’t require it.

But for donors willing to give their number, now you can call them to thank them, which will increase donations down the road. The study includes data for that too.

Create a Unique Donation Page for Direct Mail

Another takeaway is to create a specific donation page, a landing page with a unique URL, and include that in your direct mail appeals. Why? Because then if anyone who receives your direct mail gives online (identifying themselves as a multi-channel donor), you will know who those people are.

For example, if your regular donation page is just www.nonprofitname.org/donation, create a special page such as www.nonprofitname.org/give-now.  Even better is if your campaign has a name or a title because then you can put that in the URL so it will be unique to each campaign.

Then, include that URL in your direct mail. Only people who saw your direct mail campaign will have that URL. So you will know that all donations coming through that page came through your direct mail.

Only 15% of nonprofits in the study were using this method of offline donor tracking.

If you don’t give your offline donors the opportunity to give online, then you are removing the ease with which those who want to give online can do so. And that means, you won’t know who your multi-channel donors are.

Your Multi-Channel Donor Action Plan

Here’s a quick recap of what you can do with the data from these portions of The State of Multi-Channel Donor Communications study from NextAfter.

1. Commit to doing fundraising using multiple channels. Not just online. Not just offline.
2. Ask for emails in all your offline donor communications
3. Include a unique donation page URL in all your offline donor fundraising campaigns
4. Ask for the phone number (but don’t require it) on all your online donation pages
5. Call donors to thank them for giving
6. Continue communicating with all donors through multiple channels – don’t let them forget about you

7-steps to take after a new donor gives online

7-steps to take after a new donor gives through direct mail

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