The Lightning Rod M/M Blog

Direct Mail Study Mirrors Workplace Giving Trends

As reported today today in the Chronicle of Philanthropy, a new study finds that the number of people giving via direct mail is declining but those who are still giving are giving more.  The study was conducted by Target Analysis Group, a Boston-based consulting firm.  A summary of the findings is posed on the company's web site, www.targetanalysis.com.

That same trend has been evident in employee at-work fund drives for more than a decade.  The percentage of employees participating has been decreasing, but the average gift has been increasing.  So far the increase in gift size has offset the decrease in number of givers.  As a result, overall revenue has actually increased.  In the long term, however, fewer givers giving more is an unsustainable trend.  Everyone in our business is worried about it, but nobody has been able to reverse it.  That's not for lack of trying.  The United Ways, the Combined Federal Campaign, the workplace federated groups, and many companies have tried various techniques designed to increase campaign participation.  None of them have worked.

For both direct mail and workplace giving, the cause of the decline of the number of people giving appears to be the same --  those who have traditionally responded well to direct mail/workplace appeals (that is, older people) are moving out of the pool of givers while younger people are not replacing them.  (It is unclear whether younger people are in fact giving less or just giving differently).

The conventional wisdom is that direct mail is not as effective with younger people in our brave new online world.  There are fewer likely theories as to why the fewer givers/larger gifts trend is happening at work.  The integration of web-based, online solicitation in at-work fund drives, which presumably is more effective with younger workers, is well established in private sector corporate fund drives.  So why isn't it working to increase the percentage of employee participation?

If you think you know the answer, I'd sure like to hear it.

Online Giving Is The New Direct Mail

"GiveDirect" is the online credit card gift processing system my company developed for Independent Charities of America/Local Independent Charities of America.  462 charities use it on their respective web sites.

In calendar year 2006 the GiveDirect system raised $9,364,446.  In 2007 it raised $12,399,546, a 32.4% increase.  What's really interesting is not the revenue increase per se.  It is that the increase came about with only a 20% increase in the number of contributors and only six more charities using the system in 2007 than used it in 2006.   Yes, there is a healthy increase in the number of people giving online, but there's an even greater increase in the size of their gifts.  The average gift in 2006 was $164.  In 2007 it was $180.

Another interesting trend.  Every year the number of recurring gifts increases, too.  Recurring gifts are those where the giver instructs us to automatically deduct a specified amount from his or her credit card each month or each quarter.  Recurring gifts now account for seven percent of the total amount GiveDirect raises.

If our experience with GiveDirect is indicative of growth in online giving for the nonprofit sector as a whole  --  and I believe it is --  we are in for a sea change in how contributions are solicited and collected.  Online giving is the new direct mail.