The Creative Challenge: Telemarketing in the Age of Crowd Funding
By Robert Evans
Oprah Winfrey, Bill Gates, Martha Stewart, Lady Gaga, Mark Zuckerberg, Justin Timberlake, Derek Jeter and George W. Bush: these are some of the best known folks who have accepted the ALS Association Ice Bucket Challenge. In case you have been living under a rock this past month, here’s the gist: In the ALS challenge, one person nominates two or three other people to donate $10 to the ALS association and dump a bucket of ice over their head. If the person refuses, he or she is supposed to donate $100. The campaign was not started by the ALS Association and but has sprung up organically. It has swept social media and represents a rare uplifting story in a summer of bleak news from the Midwest to the Middle East. As of Monday, August 25, the campaign had generated $79.7 million in donations, compared to $2.5 million for the same period last year. This enormous outpouring came from more than one and a half million new donors, as well as existing donors. The Ice Bucket Challenge made it cool to give, pun intended.
The challenge is one of the most successful, if not the most successful, crowd funding campaign in the very brief history of social media and online fundraising. The ALS Association captured lightning in a bottle and created the exception that still proves the rule: fundraising through social media, mobile technology and the web can be like trying to win the lottery. By all means, nonprofits should aim for creativity and try to come up with the next Ice Bucket Challenge, or simply hope that a supporter thinks of it and starts it on his or her own. Remember that, in 2013, online giving accounted for just 6 percent of all charitable donations. While that number is sure to go up, nonprofits should not dismiss analogue methods of fundraising.
Here is a radical idea – nonprofits should take a second look at utilizing telemarketing and direct mail to reach their fundraising goals.
Are we suggesting that nonprofits give up their automobiles and go back to the horse and buggy era? Telemarketing? Who picks up their phone anymore when they don’t know the caller? Who opens their mail? It turns out that quite a few people do. And you’ve still got a better chance of someone answering a call or opening “snail mail” than opening an email – and a much better chance that they will actually respond positively.
Ralph Siegel, president of the Siegel Marketing Group, a Milwaukee-based company that specializes in telemarketing , direct mail and data services, says that nonprofits have been using professional telemarketers since the early 1990s and that the results have been predicable and consistent. In other words, not too good to be true. In a typical telemarketing campaign, Siegel says nonprofits can typically expect to receive gifts from 30 to 50 percent of existing donors who are contacted. In a direct mail effort, Siegel adds that organizations can expect donation rates of seven to 30 percent, and, less than 1 percent for email. The numbers are lower when it comes to donor acquisition, or getting people to give who have never given before to a particular organization.
“People give because of an emotional response,” says Siegel. “They give because of a response to another person. When you call somebody, it is one human being talking to another. That is still the greatest motivator. Even though our people are paid solicitors, they are having human conversations. People, by and large, are still basically nice. They are usually willing to listen at the beginning of a conversation.”
Siegel said that a solicitor has only about three seconds to get a caller interested. And, he acknowledged, most of the potential donors who are reached are in their 50s and above. But, despite these limitations, telemarketing can work under the right circumstances and for the right organizations. There’s a misperception, he said, that telemarketing is only an option for large organizations. His firm has run campaigns with a list of just 1,000 names and minimal financial risk.
The Jewish Federation of Greater Philadelphia recently commissioned the Siegel Group to develop a telemarketing component for its Israel Emergency Fund.
Karen Golden, director of Federation’s Community Campaign, explained that she decided to use telemarketing for a very specific purpose, to reach donors who had already made a gift to the annual campaign. Golden says that Federation decided to employ telemarketers on the assumption that there are many donors out there who were thinking about contributing to help Israel but hadn’t actually done so. Golden said a professional team, and not volunteers, was needed to do the job.
“They start calling in the mid to late afternoon and called until 8:00 at night. It is extraordinarily difficult for me to get volunteers who are willing to do that,” she said.
So far, the telemarketing effort has resulted in 54 percent of the gifts made in the Israel Emergency Campaign and five percent of the campaign’s total gifts. So far, the Philly federation has raised more than $1.5 million for the fund.
Here’s perhaps the most important statistic: For every $1 Federation spent on telemarketing, the organization has raised $5.
“It’s immediate, it’s a conversation and people are open to it,” says Golden.
Federation, she acknowledged, received a few complaints from donors who didn’t appreciate being solicited at home, and a few called Federation staff to make sure the call was legitimate. Overall, the feared furor over telemarketing just didn’t materialize. Next up is a direct mail effort.
Mail can be expensive. Siegel claims it is often more expensive than telemarketing because “once the mail is out there, there is no changing the course of the project. “There are different schools of thought regarding the length of content. Some say that longer letters tend to be more successful. If people take the time to open a mailing and start reading, they want to be educated and engaged. Think of it as a newspaper versus the nightly news or a blog post – the audience is giving the organization more leeway to state a case, tell a story, and go into depth. But other proponents of direct mail stress the importance of getting straight to the point.
The key, according to Jay Gelb, president of Contempo Direct, a direct mail service based in Florida, is to design an envelope that entices someone to open it. With email open rates so dismally low, and with spam filters catching more and more email, Gelb and others have predicted a major comeback for direct mail. He adds that so many people have multiple email address and often don’t check all of them on a regular basis. On the other hand, adds Gelb, most people have only one home address.
Golden notes that she “hasn’t seen anyone who has been able to leave mail in the dust and just go with email.”
Neither have we. Nonprofits would be foolish to ignore crowd funding and mobile giving. Our team routinely and gently nudges clients to more fully engage their donors and stakeholders through online platforms. And we are thrilled at the potentially revolutionary development that the Ice Bucket Challenge represents for the philanthropic world. But I remind nonprofits that there are some proven techniques that have worked over time. A dynamic organization never wants to become fossilized, but neither should it be so focused on the next big thing that it loses sight of the present.
Let us all focus on being creative and inspiring our donors. That is a challenge all nonprofits should eagerly accept.
Robert Evans, President of the Evans Consulting Group, has more than 35 years of experience advising nonprofit organizations and conducting fundraising campaigns in major metropolitan areas nationwide. Regarded as an authority on campaign strategy, Mr. Evans is known for his inventive campaign plans that have enabled clients to reach development goals even in the most challenging circumstances. He sits on the Giving USA Editorial Review Board and serves on the National Steering Committee for Giving Tuesday. He writes a regular column for eJewishPhilanthropy.com and is quoted frequently in mainstream and professional media outlets.