Start with the gentle, pale yellow and purple that dominate the color scheme. Catch the smiling faces, not just of the many children whose grins adorn almost every sheet of paper in this package but also of Jacqueline Jones, who directs UNICEF Canada’s Global Parent Programme.

Then consider the nature of the contents:

* A handy folder to hold the Welcome Kit contents, as well as future correspondence with UNICEF Canada

* A welcome message headlined “We’re Here for You!”

* Convenient forms for address change and changes in monthly payment arrangements

* “UNICEF’s Exclusive Donor Promise,” which includes multiple opportunities for the donor to request special treatment or additional information, or to contribute to UNICEF in additional ways

* A detailed flyer on the UNICEF Mission, Priorities, and Accountability

* A large refrigerator magnet featuring an adorable little girl

* An “Activity Book: Games and Stories for Global Parents and children of all ages”

You can hardly be more welcoming than that!

The copy I received didn’t include either a carrier or a reply envelope. Clearly, both were incorporated into the package as mailed to new Global Parents.

This is obviously an expensive package. In the United States, I would expect that such a package would cost in the range of $1.50 to $2.00 or more in the mail. Does this seem excessive? Not if you consider (a) the Long-Term Value of a monthly donor, which might easily amount to $500, $1,000, or more, and (b) the cost of first recruiting new donors and then converting them to a monthly giving program. The latter alone could easily top $50.

No, the $2.00 or more that this Welcome Kit might cost is a modest investment in building a mutually rewarding, long-term relationship between a nonprofit and its donors. It’s worth every penny—and more!

Bravo to UNICEF Canada for this example of relationship fundraising at its best. Click here to see the full package.

Congratulations and a Successful Direct Mail, Telephone & online Fundraising Award Certificate to UNICEF Canada, 2200 Yonge Street Suite 1100, Toronto on M4S 2C6, phone (800) 567-4483, fax (416) 482-8035, Web http://www.unicef.ca/portal/SmartDefault.aspx.

2. Growing by leaps and bounds

By Peter Schoewe

THE BEST MAILERS TEST around the edges of their control packages, trying to boost response by a quarter of a percent or average gift by a dollar. But what do you do when slow, predictable growth isn’t good enough—and you need to boost net revenue now?

Unfortunately, there’s no perfect way to send direct mail returns soaring through the roof. But please don’t let that discourage you from reading the rest of this article. I’d like to offer you three strategies to consider—each with its downsides—that can result in quick net revenue growth for your direct mail program.

The first and most obvious strategy is to spend more money. Especially with higher dollar donors, you can use several established methods to produce a much higher net by increasing response rate. These include adding multiple live stamps to return envelopes, using real handwriting on both the outer envelope and the letter inside—or mailing the donors a gift with very high perceived value, such as a commemorative medal, ornament, or book.

The downside is that you need the fortitude to place all your eggs in a costly basket. In addition, while these expensive packages may increase our net revenue, in many cases, they will also increase your fundraising ratio.

The second strategy is to mail your best donors more frequently. When I’ve tested more frequent mailings versus fewer mailings,
the segment with the highest net revenue is always the segment receiving the most mailings, except in the case of very-low value donors. You may see lower response rates from donors who get mailed more often, but the cumulative effect of their increased giving is impossible to beat.

Of course, the downsides to this option are many and can be impossible to overcome. You need to be able to respond to donor complaints quickly and promptly—and you’ll need to overcome biases against direct mail from many folks in your organization. In addition, you face the risk of wearing out some of your donors if you ask them for help too urgently and too often—especially if your creative doesn’t do a good job of explaining why you need an extra measure of support.

And that leads to my final strategy, which is the hardest to implement—but could have the most spectacular returns. I’ll say it simply: Don’t hide from your donors. Many direct mail fundraising letters read as if they could have been written a day ago, a year ago, or 10 years ago. They use urgent language to describe the mission of the organization—even though that mission hasn’t changed in decades.

The goal of a fundraising letter should be to inspire the donor to send a contribution either right now, today, or immediately. But if the message of the letter is portable across the decades, you can’t blame donors for letting their inspiration slip away.

I’ve found the most successful appeals are those that express the real hopes, dreams and goals of the person who’s signing the letter. If you’ve been told you need to raise more money because of a budget crisis, write to your donors and let them know you’re worried about paying the bills. If you’d like to start up a critical new program but don’t have the funds, tell your donors how their contributions can make a real difference toward making it happen.

The big downside, of course, is that its tough to write hard-hitting copy and even tougher to get it approved. And, of course, sometimes the reason you need more money can’t be easily translated into a donor-focused appeal. As much as it would warm my direct mail heart, I recommend against asking your donors for an urgent gift to pay for the stamps you’re busy applying to the return envelope of their next appeal!

Peter Schoewe is Senior Consultant, Mal Warwick Associates, 2550 Ninth Street, Suite 103, Berkeley CA 94710-2516, phone (510) 843-8888, fax (510) 843-0142, Web www.malwarwick.com, e-mail peter@malwarwick.com.

3. First, understand your donors

By Kathleen Brennan

Editor’s Note: The subject of this interview, Tom Ahern, is a frequent contributor to this newsletter and the author of the just released book, How to Write Fundraising Materials that Raise More Money: The Art, the Science, the Secrets, published by Emerson and Church. His other book, Raising More Money with Newsletters than You Ever Thought Possible is brilliant. I regard Tom as one of the country’s most knowledgeable fundraising writers.

K: Before you can write a fundraising piece, you need to understand what donors respond to, do you not? Is that as simple as putting yourself in a donor’s shoes?

T: I think Dale Carnegie got it right when he said, “You'll have more fun and success when you stop trying to get what you want, and start helping other people get what they want.” Fundraising isn't about picking pockets. Donors aren’t ATM machines. I don't think successful fundraising is about keeping the staff paid and the lights burning. It's far more about giving your donors a vivid sense that they’re changing the world. It's about recognizing that people want to feel important—something Carnegie learned from Sigmund Freud and philosopher John Dewey. And one way we feel important is when we feel we've made a difference, by making a gift to a terrific organization. I think fundraising's real job is to give donors a powerful sense of accomplishment.

K: People who pick up a brush don’t presume they can paint. Why do so many people who pick up a pen think they can write?

T: Literacy is essential to a modern economy, a healthy society, and to America's well-being as a democracy. We need to read. We need to write simple sentences. But writing to persuade is a whole different kettle of fish. To write successful fundraising materials, you need to know a dozen other things first, secrets hidden in the worlds of marketing, psychology, and journalism. You also have to forget what you learned in school about good grammar and presenting your case, a huge stumbling block for a surprising number of people since it's the only training they know.

K: Why are so many fundraising materials, well, flaccid today?

T: Money's at stake, and that tends to freeze people. They're desperate not to offend, not to make a mistake. The truth is, despite a depressing amount of lip service paid to the need for good communication, very few people in nonprofit agencies have any clue how communication actually works. Executive Directors mostly don't. Board Chairs almost certainly don't. And committees are hopeless. They all strongly suspect (wrongly, alas) that it's better to be safe than sorry. I quote to them David Ogilvy, who built one of the world's largest ad agencies by following this golden rule: "You will never bore someone into buying your product." You will never lose money being bold, in my experience. You will, though, lose plenty of money being bland. There's a lot more to this discussion, by the way. But it takes a book to explain it all.

K: Whatever happened to writing from the heart, just sitting down with a piece of paper and honestly telling your story? Seems like that’s been replaced with a concern for formula (“Make sure you ask for the gift at least three times . . . remember to balance emotionality with rationality . . . use anger to your advantage . . .”)

T: I urge people in my workshops to treat direct mail as conversations. It's advice I've heard so many times I forget who said it first, although I suspect Mal Warwick: Pretend you're at the kitchen table, having a conversation with a friend about something that really moves you. George Smith, one of England's top writers, insists, "All fundraising copy should sound like someone talking." Even so, let's not dismiss formula out of hand. Formulae often derive from hard-won experience or research. one reason you ask for a gift repeatedly in a direct mail appeal is because people don't always start reading at the salutation. They jump right to the middle or the end of a letter. Getting direct mail right is very counter-intuitive. Knowing a formula can help.

K: When you write, do you usually visualize a particular reader, say, your mother or your Uncle Fred?

T: Yes. I will try to visualize someone who is in the right demographic and a friend. Fundraising materials should be friendly in tone. I imagine them raising objections and asking questions, too. That's very important. If you anticipate and then frankly answer objections in your fundraising materials, you’ll build trust. I've always been a bleeding-heart liberal. When I'm visualizing someone, I like to imagine our friend, Laura, who's an avowed conservative in her political views. It keeps me from getting lazy.

K: OK, I’ve done my research, I have pen in hand, and I’m ready to write. What should be foremost in my mind as I start?

T: These are some of the first questions I ask myself before I begin writing: Who is my target audience? What do I know about them? What will interest them? What will surprise them? What emotional triggers will they respond to? What's the most important thing I can tell them?

K: Can writing be learned?

T: I don't know any other way to acquire the skills, actually. Training and practice yield the only sure results. Talent has little or nothing to do with it, in my opinion. Nor do academic degrees. In fact, university writing is often dreadful. The biggest barrier to good writing is murky thinking, often cloaked by jargon. If you don't know what your message is before you begin to write, you won't write well. It's simply not possible. Probably a third of my "writing" time is spent staring into thin air or doodling, trying to get my thoughts organized and clarified. I write myself little questions like, "Why would a donor care about what we're doing?"

K: Speculate on this hypothetical situation. A masterfully crafted letter is sent to a scrupulously targeted and receptive audience. A bland letter is sent to the very same group. Would you be willing to bet your house in France that the former would raise, say, 20% more money than the latter?

T: No. Not the house in France. Nothing in direct mail is that certain that I would risk my favorite getaway to a place where I can't understand a word that's spoken and vineyards begin at edge of town. But I'd bet you a hundred dollars in a snap. I have plenty of proof in my files, testimony from fundraisers who have attended the workshops, then applied the lessons and seen their income soar.

K: For you personally, what’s the hardest part of writing for fundraising – the biggest challenge in terms of the craft itself?

T: The first 15 minutes of every assignment are the hardest. I have to flog myself or lavishly reward myself to begin the work. It's fear of failure, I think. There's no such thing as writer's block, really. As long as you have a plan, know your target audience, have finished your research, you'll always have something you can write about.

Tom Ahern can be reached at A2Bmail@aol.com.

Kathleen Brennan is the publisher of Contributions Magazine, P.O. Box 338, Medfield, MA 02052, phone (508) 359-0019, e-mail kbrennan@contributionsmagazine.com.

4. Fundraising ratios and other deceptions

By Mal Warwick

Conventional wisdom holds that the best way to measure your organization’s efficiency is to look at the percentage of your income spent on overhead and fundraising. The popular press, the charitable “watchdog” agencies, and our own ingrown instincts all tell us this is the right way to determine whether you’re doing a good job of running your nonprofit organization. As the argument goes, if you spend more than 10 or 20 cents to raise a dollar—a “fundraising ratio” of 10-20%—then there must be something wrong with you.

Well, that’s bunk.

The fundraising ratio is a meaningful measurement for America’s biggest charities: the Red Cross, the Salvation Army, UNICEF, Goodwill Industries, CARE, the American Cancer Society. All these groups are decades old, command instant name recognition, and have large development departments with the talent and the resources to use every conceivable means to raise money and can make the most of every dollar spent on fundraising. Each of them raises hundreds of millions of dollars every year, sometimes even topping one billion. But applying the same simplistic criteria to young public interest groups or charities with budgets a hundredth or a thousandth the size usually makes no sense at all.

In exceptional cases, where fraud or flagrant mismanagement is suspected, an extremely high fundraising ratio may be an early warning signal. An organization that’s spending 95 cents to raise every dollar after three or four years of extensive direct mail promotion is clearly not worthy of donors’ support. A closer look may reveal that the organization is promising a miraculous cancer cure and working out of a third-floor walkup and a post office box, and that the organization’s founder and $200,000-a-year Executive Director is the brother-in-law and former employee of its direct mail consultant.

But, while fraudulent charities have existed since a charitable impulse moved some far-sighted noble to give away the first shekel, they are uncommon today. It’s a tragic mistake to hobble thousands of sincere and effective public interest organizations with rules designed to inhibit a few bad actors. Moreover, where fraud is likely, an unusually high fundraising ratio is probably just one of many grave and obvious problems.

If charitable donors were to limit their gifts to the handful of the nation’s more than one million nonprofit tax-exempt organizations that meet these conventional criteria for nonprofit performance, charities would be few and far between. Groups springing up to meet new needs—or simply to keep the old agencies honest—would die as quickly as they were born. Because only an organization with a truly secure funding base can fulfill these extravagant regulatory fantasies.

When a few phone calls and a lunch meeting with a wealthy donor can produce a multi-million-dollar gift or bequest, fundraising costs are minimal when expressed as a percentage of the proceeds. Much the same goes for an organization with a large, loyal following of donors who can be counted on to renew their support year after year. In either case, the fundraising ratio is likely to be low.

But a small, less well-established group—or one just starting out to address a newly emerging need—is not likely to be in a position to achieve the same results with such little effort. It may take several years of repeat giving and continuous cultivation before you can count on getting gifts from a donor.

Fundraising is hard work—and for most nonprofits, it’s expensive, especially at the beginning.

Partly because so many so-called “authorities” keep beating the drum for the most restrictive definitions of acceptable fundraising practices, relatively few donors will give more than token sums to any but the best-established, blue-ribbon charities. To smaller and newer organizations, gifts are typically much less generous. And obtaining them can take a great deal of time and money. People tend not to trust what they don’t know.

To show the contrast, let’s look at two hypothetical nonprofit organizations:

(A) Founded 30 years ago, Charity “A” has an annual budget of $12 million.

Trustees and major donors	$4,000,000
Bequests and planned giving programs	$2,000,000
Income from endowment (established 15 years ago)	$2,000,000
Foundation and corporate support	$2,000,000
Direct mail and telephone fundraising (from 30,000 donors)	$1,000,000
Sale and licensing of products and services	$1,000,000
Total income:	$12,000,000

(B) Founded three years ago, Organization “B” has a $2 million budget.

Foundation support	$900,000
Direct mail and telephone fundraising (from 20,000 donors)	$600,000
Trustees and major donors	$400,000
Sale of products and services	$100,000
Total income:	$2,000,000

It’s entirely possible that Charity “A” and Organization “B” could each be spending $1 million per year on fundraising and overhead. For “A,” this represents one-twelfth of its budget, or eight cents on the dollar. For “B,” $1 million is half its revenue, or 50 cents on the dollar—more than six times as high a fundraising cost as that of “A.” Does that make “A” six times “better” than “B”?

Not on your life!

Leave aside for the moment the possibility the $11 million that “A” has left over to spend directly on its programs might just be going down the drain on misguided or irrelevant projects, getting socked away in fatter and fatter “reserve” funds, or even keeping a passel of unimaginative people at work in featherbedding jobs. After all, “B” could just as easily have misbegotten priorities or incompetent staff. Let’s just look a little closer at the income side of the ledger. The contrast is dramatic:

“B’s” work with major donors is just beginning. It’s had few opportunities to identify or cultivate major donors or to establish a program of planned giving and bequests, much less an endowment fund. These are “A’s” principal sources of financial support, but they took years to develop.

Nearly half of “B’s” $2 million budget is contributed by foundations. For “A,” which receives grants worth more than twice as much, foundation and corporate support is only one-sixth of its total funding. Most foundations—and particularly corporate philanthropies, which may have stockholders to worry about—favor name-brand charities. Money attracts money.

With its name less well established and its merchandising program in its infancy, “B’s” income from licensing and sale of products is only a tenth as great as “A’s.” Name recognition usually takes time to establish, and familiarity sells products as well as programs.

The real measure of a nonprofit organization’s effectiveness is the cost of the results it gains. By that yardstick, many nonprofits with enviable fundraising ratios are singularly ineffective when compared to some of the scrappy, innovative, grassroots organizations with which I’m familiar—ventures that rarely are able to raise a dollar for less than 35 or 40 cents.

Another big contrast between Charity “A” and Organization “B” lies in their direct mail and telephone fundraising programs:

For “A,” raising money from 30,000 direct mail donors, a great many of them of long standing, is a very profitable proposition. To replace those five or six thousand lost by attrition each year requires little new investment in donor acquisition. The full cost of “A’s” direct mail program may be no more than $250,000. An overall revenue-to-cost ratio of four- or even six-to-one is not at all unlikely in a mature program of this sort.

“B’s” fast-growth direct mail strategy looks a lot different. In its second year of aggressive donor acquisition, “B” might even be spending on direct mail more than the $600,000 it’s raising.

“A’s” direct mail program obviously emphasizes the cultivation and resolicitation of loyal, long-term donors. For “B,” direct mail and telemarketing are tools to meet a different—and more costly—challenge: to identify and recruit new donors.

How does Organization “B” get to be like Charity “A”? By doing precisely what it’s now doing, methodically building and cultivating its donorbase year after year after year.

5. Navigating fundraising channels

By Erin Ehsani

Each issue of Mal Warwick’s Newsletter features fundraising news and tips from leading industry professionals. Starting this month, we’ll interview an organization for an insider’s view on the fundraising challenges and successes in the trenches and on the frontline.

THIS MONTH Karen Uffelman, the Development Director of Corporate Accountability International (Boston MA), shares her perspective. CAI works to ensure the public’s protection from corporate abuse by waging campaigns to expose and educate people about destructive corporate practices.

What’s your fundraising philosophy?
Fundraising for me is an exercise in trust. I trust that if I am asking for funds to support a cause in which I truly believe, people will help if they can. I recently read about a study conducted by psychology researcher Felix Warneken that found humans display a capacity for altruism as early as 18 months of age. Before we even learn to speak, we want to help. When I keep that in mind—that people have a natural desire to help—fundraising becomes a lot easier.

What’s your greatest challenge in fundraising?
Everyone has money issues—me, my colleagues, our donors. It is often a challenge to make time to acknowledge and address our money issues, but the time is well spent.

How do you connect your donors to your mission?
The best fundraisers are also organizers. At CAI, we constantly work to find ways to engage our donors in our campaigns.

In your opinion what’s the best medium to reach donors?
Always, with any medium, the more personal the contact, the better.

Describe how it feels when you reach a fundraising goal.
Goals are important, but I try to focus on the big picture and the long view. I want to ensure that the fundraising work we do now helps build for the fundraising work we’ll be doing tomorrow.

What changes in fundraising have you witnessed through the years?
It’s clear there are different generational attitudes about charitable giving, and although I believe today’s youth are extremely generous, they don’t necessarily respond to traditional fundraising approaches. We need to find new ways to reach out to younger donors.

What’s the most important message to send to donors?
Let them know their contributions are appreciated and needed. Keep them updated early and often on your work. And don’t do all the talking.

How did you get involved in fundraising?
Working for a social change organization without doing fundraising is like being in a boat and never taking a turn at the oars. Fundraising is like rowing —it gives you a better sense of the currents in which you operate, you develop stronger muscles, and you deepen your commitment to reaching the intended goal or destination.

What fundraising lessons have you learned through the years?
The most critical piece for me as I develop a fundraising pitch is being able to articulate what I personally find motivating. Speaking to a donor’s interests is very important, but without personal conviction, it’s difficult to make a compelling Ask.

What motivates you personally to give?
Like those 18-month olds in Felix Warneken’s study, I have an innate desire to help others.

What keeps you coming back every day?
I work with great people, advancing an important mission. And there’s a lot more work to do.

Production Manager Erin Ehsani is Executive Assistant at Mal Warwick Associates. To share your perspective, send Erin an e-mail at erin@malwarwick.com.

6. Tips and Tidbits

Decisions!

What source of information do 60 million Americans consult when faced with a major life decision? The World Wide Web. A Pew Research survey of “Major Moments” reports some 45% of American internet users log on for guidance when coping with a major illness, career changes, housing, college, car purchase, or when making major investment of financial decisions. 57% of the group surveyed cited the internet as the number one source for information when compared to other offline sources. Why are more people migrating online? The folks at Pew say it’s not only the word of mouth through online communities, but also the “clearinghouse” of information available world wide. Read the full article here.

Receipt, please

With Reckoning Day fast approaching, many are scrambling to compile forms and a year’s worth of scattered receipts. That’s why you should start filing your charitable contributions now for 2007. Beginning this year, the IRS requires written documentation for all deductions. With concerns Americans were overestimating their donations, or being duped by unreputable organizations, Congress passed stricter regulations in 2006.

Fortunately, many organizations like Charity Navigator and Changing the Present both offer ways to not only track your annual giving – but to ensure your dollars are truly going to a good cause.

Tips & Timesavers

If you’re one of those unfortunate people who’s strictly a linear thinker, and you do everything in sequence, one step at a time, you may discover that your mailings are habitually getting out late. Consider, instead, all the steps you need to take in preparing a mailing—virtually all at once, at the outset, as soon as you know whom you’ll be mailing to and what you’re planning to mail:

Determine the list or lists you’ll include in the mailing, and set matters in motion (list clearance, list orders, data processing) to ensure that all the names will arrive on time at the lettershop Obtain bids for the printing, data processing, and lettershopping you’ll need to employ in the mailing, so that press time and other schedules may be set to suit your schedule—and whomever controls the money in your organization can plan to have funds available to meet payments for postage and vendor costs

Draft a thank-you letter at the same time you draft the copy for the appeal, so that acknowledgments can go out without delay once response to the mailing begins.

Elementary, you say? Of course. But, all too often, even the most accomplished professional lets something slip . . .and a mailing drops later than planned, sometimes with unfortunate consequences.

Send your own Tip or Timesaver to mal@malwarwick.com.

English?

Now that English has become the language of trade and travel throughout much of the world, more and more colorful examples of its use are cropping up all over the globe. Here, for instance, on a sign posted in a hotel in Vienna (the one in Austria, not Virginia!) was the following verbiage:

In case of fire, do your utmost to alarm the hotel porter.

But be sure to walk, not run.

Don't panic!!!

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