Reaching Donors in 2010: Old vs. New Ways

Reaching Donors in 2010: A Conversation with Ralph Siegel, Marketing Specialist

by Robert I. Evans & Avrum D. Lapin

“I have only heard how important [social networking] is; I have yet to see how effective it is.”

How to most effectively utilize social networking tools for fundraising truly captured attention at and throughout the non-profit world last year. We know from firsthand experiences that Facebook, especially, and other internet-based media had been touted as panaceas to generating access to new donors and untapped dollars.

Citing the almost unbelievable fundraising results from the Obama presidential campaign, we – and others – encouraged non-profits to emulate the lessons learned. The results for non-profits, however, have just not materialized and this prompted us to talk with experts in some of the more traditional fundraising systems. In particular, we were wondering about telemarketing and direct mail: are these tried-and-true approaches still effective or not? Has on-line giving replaced the need for “snail mail” either as a stand alone effort or tied to telephone solicitations?

For one perspective, we spoke at length with long-time marketing specialist and Jewish community professional Ralph Siegel, who founded Milwaukee-based Siegel Marketing Group, and who has worked with hundreds of small, medium and large Jewish non-profits. His insights and expertise shed some light on this subject matter and we share some provocative recommendations.

Based on your years of experience and the clients that you are currently working with, what would you say differentiates Jewish and non-Jewish nonprofits?

Ralph: “The profile of the Jewish donor is not quite the same as the non-Jewish donor. Non-Jewish donors are generally younger and seem to have lower income levels than Jewish donors. The implication: Jewish donors are less likely to give on-line!”

In terms of donor outreach methods and the relative value of new technologies today, what appear to be the most effective approaches for Jewish nonprofits?

Ralph: “There are always new trends, but telemarketing is still a significant growth area and continues to be a choice method. E-solicitation has not caught on as much as people thought it would, despite its successful use in the Obama campaign. From our experiences, solicitations via email are anemic at best, but it would be a mistake to write them off entirely. If there is a unique and timely appeal message, it can be effective. But we are just not seeing significant dollars coming in through on-line efforts.”

What do you believe to be the best approach for Jewish nonprofits to take?

Ralph: “It depends on whether it is for donor renewal or acquisition. For renewals, we suggest a direct mail piece first, then, depending on the size of the list, follow-up with telemarketing. Response rates for direct mail have dropped in the past few years but if you can bring in 7% with a pre-qualified list that is great. For donor acquisition, mailing performance has been abysmal: we recommend going straight to telemarketing. What’s most important is to consider the return on investment and then choose your approach. Depending on on-line solicitation will be a mistake.”

How have social networking and new technology forms affected fundraising for Jewish nonprofits?

Ralph: “I have only heard how important it is; I have yet to see how effective it is. The younger generation is more involved in social networking (i.e. 20’s, 30’s, early 40’s) and likely they won’t be the biggest donors. But if we create a tie, a “kesher,” to them then maybe, hopefully, they will ultimately give. While I don’t want to sound too pessimistic about this, I know that Jewish organizations are more focused on today . . . not tomorrow. Investing in updating data bases with email addresses is vital but counting on immediate results from on-line giving is unrealistic.”

What advice do you have for Jewish nonprofits for 2010?

Ralph: “Many organizations have woefully lagged at data base “hygiene;” their data base quickly ages and is inaccurate because they are not regularly updated. Our national move rate of about 15% also explains why response rates have dropped.

Don’t wait an entire year to get a renewal. We’re in a competitive fundraising environment, so we need to be proactive. Don’t wait longer than 4-6 months after receiving a donation to request the next gift. We’ve seen a response rate of 25-30% for 2nd asks. However, know your donors and be careful not to over solicit or you will see donor burn-out.

Remember that the farther donors are from their last contribution, the less likely they will be to make another gift. Take a look at response patterns: when was the last gift? What was the amount? How many people responded? What was the cost of this effort? Determine the return on investment; you might find that you should be targeting one group of people over others. And don’t give up on list acquisition as a method to get new names for your data base.”

Robert I. Evans, Managing Director, and Avrum D. Lapin, Director, are principals of The EHL Consulting Group, of suburban Philadelphia, and are frequent contributors to EHL Consulting works with dozens of nonprofits on fundraising, strategic planning, and non-profit business practices. Become a fan of The EHL Consulting Group on Facebook.

eJP asks: Do you agree with Ralph Siegel? “I have only heard how important [social networking] is; I have yet to see how effective it is.” Let us know of your organizations’ experience.