Journal of the DMANF | Volume 7, Number 4 | December 2004 · rates or errors during registration....

Keeping your e-mail lists fresh is critical to the success of youronline marketing and fundraising efforts. In the early days of theInternet, with customers signing up in droves to hear your lateste-news, there was no need to worry about e-mail address attritionrates or errors during registration.

Unfortunately, those days are over! Due to error-riddendatabases, privacy concerns, excess spam, and the highturnover of e-mail addresses, many organizations are nowfinding they are losing e-mail addresses faster than they cangain them. Customer retention has reemerged as the

key to profits. Below are some suggestions as to what you cando to bounce-proof your e-mail lists and increase your customerretention rate:

Have your members enter their e-mail addresses twice dur-ing registration — This will reduce typos and help your donorsrecognize how important an accurate e-mail address is to you.

Validate e-mail addresses at the point of registration —Examine your current methods for validating e-mail addresses atthe point of registration. Does your software check to ensurethat the e-mail address being typed in to your Web site is valid?Consider upgrading your software or using a real-time validationservice so you can catch your prospects when they want youmost.

Confirm your registrations — Present all new registrantswith a confirmation page, which lets them review what theyhave typed and correct any mistakes they have made.

Implement a double opt-in process — Many organizationsare requiring all new registrations to check their e-mail and click through on a custom link to confirm that your e-mail wassuccessfully delivered to them. While this is the best way to validate an e-mail address, it often results in a significant drop-off in registrations, sometimes more than 50 percent.Decide if this trade-off makes sense for you.

Examine your off-line data entry procedures — Review the other ways that e-mail addresses get into your database.Provide your data entry staff with a list of common top-levelextentions (.com, .net, etc.), domains (hotmail, yahoo, etc.), and standard e-mail address formatting rules. If you do any significant off-line data entry, investigate implementing aggres-sive validation on these addresses at the time of entry.

ALSO IN THIS ISSUELetter from the Chair . . . . . . . . . . . . . . . . . . . 2

Donor Power: How Smart Nonprofits WillSeize the Future of Fundraising . . . . . . . . . . . . 7

Nine Ways To Your Donor’s or Prospect’s Heart . . . . . . . . . . . . . . . . . . . . 14

Letter from The DMA President & CEO . . . . 18

Charity Begins at Home . . . . . . . . . . . . . . . . 20

Philanthropy and the Family . . . . . . . . . . . . . 22

Highlights of Nonprofit Conferences . . . . 24-25

Not All Donors are Created Equal . . . . . . . . . 29

Member Spotlight . . . . . . . . . . . . . . . . . . . . . 32

Answer the Call to Action! . . . . . . . . . . . . . . . 34

Direct Marketing Pointers . . . . . . . . . . . . . . . 36

E-Mail Deliverability in the Age of Spam . . . . 37

OMB Watcher Report . . . . . . . . . . . . . . . . . . 40

Investing Tips for Nonprofits: the Investment Policy . . . . . . . . . . . . . . . . . . 41

Volume 7, Number 4 December 2004

JOURNALJOURNALO F T H E D M A N O N P R O F I T F E D E R A T I O N

Continued on Page 4

Tips to Bounce-Proof Your E-Mail ListBill Kaplan, CEO, FreshAddress, Inc.

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ChairPegg NadlerPegg Nadler Consulting

Vice ChairJack DoyleAmergent

MembersKelly BrowningAmerican Institute forCancer Research

Tim BurgessDomain Group

Phil ClaiborneElks Magazine

Christopher CleghornEaster Seals

Bobby DeanCal Farley’ s Boys Ranchand Affiliates

Craig FloydNational LawEnforcement OfficersMemorial Fund

Lindy LitridesLitrides & Associates

Susan LothDisabled AmericanVeterans

Larry MayMay DevelopmentServices

Dennis MeyerMeyer Partners

Sherry MintonAmerican HeartAssociation

Angie MooreAmerican Cancer Society

Jo SullivanASPCA

Sue SwordChristian AppalachianProject, Inc.

Nick StavarzSynergy Direct MarketingSolutions

Joan WheatleySpecial OlympicsNorth America

Kevin WhortonCatholic Relief Services

StaffSenny Boone, Esq.Executive Director

Helen LeeConference OperationsManager

Jill MurphyMember ServicesManager

Dear DMANF Members:

As the end of the year arrives, it’s a good time to reflect onwhat has been accomplished over the past year, and note thechallenges facing DMA Nonprofit Federation members.

I want you to know how amazed I am at the thoughtful and giving nature of our membership in general. We havemembers that are devoted to contributing to the success of thisorganization — from volunteering on conference planningcommittees to struggling through public policy challenges thatface all nonprofit organizations.

We have outstanding leaders, including Pegg Nadler, ourcurrent chair, and Jack Doyle, our current vice chair. We have a new President & CEO of The DMA, John A. Greco, Jr. (seepage 18 for his message to you), who we know will chart newsuccess for the direct marketing industry. I know we cansucceed and grow the DMANF in the coming months, and I urge those of you who wish to become more involved tosimply give me a call at 202.861.2498.

We have been working in three areas over the past year:nonprofit educational offerings, public policy, and leadershipdevelopment. We held successful conferences in New York;Washington, DC; and Chicago. We held a joint policyconference with The DMA Government Affairs Department inWashington, DC. In 2005, we will hold major conferences inWashington, DC (February 3 – 4), and New York (August 17 – 18); an invitation-only leadership summit for seniorfundraisers and executives in Denver, Colorado (June 1 – 2); anda one-day Critical Issues public policy conference on April 14 inWashington, DC. Each conference involves dozens of volunteerand speaking opportunities for our members. We hope you willmark your calendar for each of these exciting events!

The public policy arena continues to be very challenging.There is no question that nonprofits face daunting regulationsand paperwork burdens, making us one of the most heavilyregulated sectors in the United States. This will not diminish.State attorneys general and charity officials are more apt to loadon new paperwork requirements than to pursue existing fraud,as we saw in the passage of California Senate (Bill S. 1262).

Looking Back, Moving AheadSenny Boone, Esq., Executive Director, DMA Nonprofit Federation

The 2004 – 2005 LeadershipFollowing are the members of The DMANonprofit Federation’s Advisory Council

with leadership responsibilities:

Additional regulatory burdens willalso occur at the federal level as theSenate Finance Committee offerslegislation to enhance nonprofitaccountability without our action andattention. Please make sure you heedDMANF Government AffairsCommittee Chair Phil Claiborne’sadvice on communicating withmembers of Congress (page 34).

As of this writing, postal reform hasbeen set aside due to election worriesover the size and scope of the proposedchanges. Some have said the postalreform bills do not go far enough, andcost too much. Others would like tosee the US Postal Service (USPS)privatized. For nonprofits, however, itis important to retain the USPS’s roleas a key federal agency that serves eachAmerican household six days a week.Despite the advent of the Internet,nonprofit organizations still relyheavily on the USPS for charitablesolicitation; this is not going to change soon.

The DMANF will continue to fightfor postal reform in the coming months,as well as fighting for reasonable rates inthe upcoming rate case. We supportreform because it offers a rate index for

predictable, reasonable rate increasesthat do not rise above inflation; a strongregulator; and universal service. Thestatus quo is not acceptable, sincewithout serious reform, we face a deathspiral of rising costs and shrinkingvolume. and have no affordablealternative; we know that direct mail hasbeen our most effective tool.

Just as challenging as policy andregulation is the issue of nonprofitcredibility in the post-9/11 era. Therewas a sea change for fundraising afterthe horror of the attacks; nonprofitfundraising has not bounced back, andthe public continues to questionfundraising practices. You are witnessto the era of the informed donor.Gone are the days when potentialdonors were passive recipients oftargeted messages through the mail andtelephone. Donors are seeking outorganizations and issues. We need tobe prepared to serve them in new ways,with Web sites providing the publicwith as much detailed financialinformation as possible. This providesyou with limitless opportunity to askfor support and get it from the trulycommitted. If you succeed, you willretain donors over their lifetime.

Donors not only need to be asked tosupport you; they want to know moreinformation about you, and you mustfollow through.

This year, the DMANF is planningto launch educational outreachcampaigns to explain the importanceof giving to and supporting America’scharities. We are fortunate that manyorganizations have provided financialsupport to this cause. We will belaunching a Public ServiceAnnouncement and offering materialsto regulators, the media, and thepublic about the good work ofcharities. Thank you to the numerousorganizations that have stepped up tosupport us. Stay tuned for moredetails in the new year.

We are here to help. If you arehunting for a product or service, for a networking opportunity, moreeducation on nonprofit fundraisingand direct marketing, or forinformation on postal or regulatoryissues, we will find the answers. In the meantime, we appreciate yourcontinued support and ideas. �

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ATTENTION NONPROFITPROFESSIONALS —Don’t Miss DC’s PremierNonprofit Event! (See pg. 43 for details)

If Errors Sneak In, Catch Them ASAP

Send a confirmation message —Immediately e-mail a welcome messageto each newly registered e-mail address.If there is a bounce, quickly implementan e-mail address recovery attempt. Thelonger you wait, the greater the chanceyour donors will forget why they gaveyou their e-mail addresses in the firstplace. This is also the time to make agood first impression by thanking yourdonor for their interest and perhaps mak-ing a pitch for one or two of yourfavorite programs.

Utilize a list hygiene and correctionservice on a regular basis — List hygiene services can identify and cor-rect a majority of the invalid e-mail addresses that result from domain errors, formatting problems, mis-spellings, and typos. Again, the longeryou wait, the more difficult it will be toreconnect with your donors and engagetheir interest.

Even Good Addresses Go Bad:Plan For Donor Recovery

Face the facts — People change theire-mail addresses daily. Thirty percent ormore of your e-mail addresses are goingto need updating each year.

Determine how much a working e-mail address is worth to you —Properly analyze the results of all ofyour online efforts. Be sure to separate-ly analyze the value of a new donor versusa recovered donor. Loyal, repeat donors are the staple of every successful

organization. Don’t focus your effortssolely on new donor acquisition.

Put someone in charge of donorrecovery — Many organizations losesight of the basics. Donor retention maybe less sexy, but it will likely yield you ahigher ROI. Make sure you have identi-fied the resources, budget, and priorityfor your donor retention efforts.

Plan your e-mail address acquisitionmethods to assist with later recovery —Consider collecting a name, an alternatee-mail address, a postal address, or aphone number.

Update Your E-Mail Address Lists

Provide e-mail address update linkson your site — Make it easy for yourdonors to update their e-mail addressesfor you whenever they are interactingwith your Web site.

Put e-mail address update links in your e-mail communications —Enable your donors to update their e-mail addresses with a simple click-through. Many companies require theirreaders to unsubscribe and then re-sub-scribe. This is too cumbersome for thevisitor and often results in the loss ofvaluable historical data.

Utilize an ECOA — (e-mail changeof address) service — ECOA companiesprovide you with current e-mail addresses for your “dead” addresses. Moreover, they will updateyour list with your donors’ preferred e-mail addresses, solving the problem ofinfrequently checked e-mail accounts.Top ECOA providers can update 10% to15 percent of your bounce list on yourfirst run and double these results over thecourse of a year.

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Tips to Bounce-ProofYour E-MailContinued from Page 1

For further information on DMANFmembership, the Corporate PartnerProgram or Friend of the FederationProgram contact:

Jill Murphy, Member ServicesManager, Tel.: 202.861.2497

Continued on Page 6

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Utilize an e-mail appending service — A reputable e-mail append service can help you find guaranteed deliverable e-mail addressesfor up to 20 percent of your customerlist. Sophisticated nonprofits alreadyknow this is the best way to jumpstartyour e-mail marketing efforts.

Develop a donor recovery plan andfollow it — Determine how much timeyou can let pass before your donors orprospects will forget why they came toyou in the first place. How frequently areyou planning to do your database updat-ing? What is the most cost-effectiveprocess for recovering a donor? Reviewthe costs and benefits of your options and decide what is bestfor you.

The payoffs for bounce-proofing youre-mail list are substantial: lower donoracquisition costs, increased response ratesand donations, reduced messaging andsupport costs, and the decreasedlikelihood of winding up on some systemadministrator’s blacklist due to highbounce-back rates. Follow the basicsuggestions above and you will maximizethe return on your marketinginvestments. Isn’t today a good time to start? �

Bill Kaplan is CEO of FreshAddress,Inc., The E-mail Address Experts™ provides a comprehensive suite of industryleading database and e-mail deliverabilityservices to help organizations increase theirdonations and revenues. Visit www.freshaddress.com/nonprofit or [email protected].

Please help us keep our records up-to-date!

Name ____________________________________________________________

Organization ____________________________________________________

Title ______________________________________________________________

Address __________________________________________________________

City, State, ZIP __________________________________________________

Telephone ________________________________________________________

Fax ______________________________________________________________

E-Mail ____________________________________________________________

Web site __________________________________________________________

Additional Contacts ______________________________________________

Please fax back to 202.628.4383 or mail to us at: The DMA Nonprofit

Federation 1111 19th St., NW, Suite 1180 • Washington, DC 20036

ARE YOU A MEMBER OF THE DMA NONPROFIT FEDERATION?

Membership in The DMA Nonprofit Federation brings with it these and other benefits:

• Discounts up to 35% off non-member fees for The DMA’ s Nonprofit Federation conferences

• Discounts up to 33% off on DMA publications

• Members-only e-newsletter

• Members-only section at The DMA and The DMA Nonprofit Federation Web sites

• Nonprofit advocacy programs with state and federal agencies

• Free help with nonprofit postal and regulatory issues

• Access to The DMA online database

• Access to The DMA research studies and nonprofit stats

• Quarterly Journal...and much, much more

Contact The DMA Nonprofit Federation at 202.628.4380 E-Mail: [email protected] Web site: www.nonprofitfederation.org

Tips to Bounce-ProofYour E-MailContinued from Page 4

9 Centennial Drive, Peabody, MA 01960-7927 www.amergent.com

Successful Fundraisers Know

When Donors Will Say YES!

A Partnership That Creates

Lasting Relationships

Since 1980, we’ve been

helping fundraisers build

stronger relationships with

their supporters through:

• Strategic Direct Marketing

• Flexible Database Management

• Insightful Analytics

• Award-Winning Creative

If you are looking for new

fundraising solutions, please

call Jack Doyle at 1-800-370-7500.

8

The New Donors are coming! Andthey’re changing fundraising.

The key difference between the old-style donor and the New Donor is this:

• The old donor gives out of duty; shegives because giving is the right thingto do.

• The New Donor gives to make adifference. Duty may still be impor-tant, but her main motivation is tohave a positive impact on the world.

For the old donor, giving is its own

reward. This makes her relationship withcharities uncomplicated: They make heraware of needs, she gives — dutydischarged. The New Donor, on theother hand, needs to know and feel thather giving makes a difference. She putsmore demands on the organization shesupports — she wants more informationand involvement. When she gets whatshe wants from a nonprofit, she alsooffers more rewards: Larger gifts, betterretention, and more upgrade potential.

New Donors have been around for

years, but they’re on the way to being themajority of donors. That’s because theNew Donor more or less correspondswith the Baby Boom generation — thatmassive cohort of 76 million people whohave transformed every aspect of cultureand commerce they’ve touched. In2005, the oldest Boomers will turn 59.They’re entering their prime giving years,and over the coming years, they willdominate the ranks of donors.

Organizations that fail to adapt to the

Donor Power: How Smart NonprofitsWill Seize the Future of FundraisingJeff Brooks, Senior Creative Director, Domain Group

Donor Power Tactics: 11 Ways to Serve the New DonorJeff Brooks, Senior Creative Director, Domain Group

Here are some tactics for donor-powered organizations. Some of them are simple things you can easily put into place rightnow. Others may be fundamental shifts that will require new ways of thinking from all parts of the organization.

1. Receipt gifts promptly — Far too many nonprofits take weeks, even months, to acknowledge gifts. Many organizationshave cashed the check, asked again — even sold the donor’s name — without acknowledging her gift.

We live in a fast society. People expect (and often get) fast service. A quick receipt thanks a donor while she still remembers the gift. It extends the warm feeling that started when she wrote the check. A slow receipt lets the spark die.

If it takes you more than 24 hours to send a receipt, you have room for improvement. Make it a priority. No excuses.Amazon.com can send out a book in 24 hours. Surely you can send a receipt in that much time.

2. Make receipts a good experience — At minimum, a receipt is a piece of paper with an amount and a date. That would befine if it was just an acknowledgement for accounting purposes. But it’s not good enough for a donor-powered organization.Donors aren’t soulless corporate entities — they’re people who are eager to engage with you and your cause. This is all the moretrue of the New Donor.

In your receipts, be thankful! The receipt should be overwhelmingly positive in every detail. It should remind the donor of what she did:

Continued on Page 10


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Have you heard about the charity that cut renewal mail volume by 20% …

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names from its program … and reduced its cost-per-dollar-raised by 19%?

These days, if you’re not using the latest analytic tools, then you’re wasting pre-

cious budget dollars. And not generating the kinds of breakthrough results you

could. Want to learn how you can mail less, and spend less, while also raising

more? Just call Tom Gaffny at 781-685-6825. And start getting the most out

of every dollar you spend.

New Donor face dwindling revenues,shrinking donor files, and challengesfrom nimble new competitors. Butorganizations that embrace the NewDonor will thrive and grow in thecoming decades.

The secret to meeting the New Donor is simple: Be a donor-poweredorganization.

Being donor powered is more than a set of fundraising tactics. It is afundamental mindset that sees donors asthe life-blood of the organization —which is what they are, of course. Adonor-powered organization gives itsdonors power, choice, service, and respect— the very things they’ve come to expectas customers in the commercial world.

Don’t Try to Change Your Donors

Donors are an elite group who havediscovered the power of generosity. Theyare doing more than their share to makethe world a better place. They are amajor force for good works, culture, andcivil society. They pay your salary.

Yet many nonprofits seem intent on“improving” their donors: Educatingthem, raising their consciousness, orelevating the level of communicationthey use. If this attitude is widespread inyour organization, you are in trouble.You face a steady decline in the comingyears, because you’ll simply be unable toserve the New Donor.

The donor-powered organizationknows the truth: There’s nothing wrongwith your donors! There is no need tochange them. It’s true that most donorsknow less about your mission than you

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• Be specific about the work her gift helped make possible. Include copy thatshows you know what she gave to accomplish. Be grateful for her involvement.

• Don’t use designation codes and cryptic phrases to indicate where the gift went— use plain language, and make sure it clearly matches what motivated the gift.

• Include a letter or note from someone, signed by someone. (Preferably someonethe donor has heard of.)

• Include a mini-newsletter of accomplishments.

• Include pictures of what her gift did, if possible.

• If it’s her first gift, welcome her to the family.

You pulled out all the stops when you asked; do it again when you thank her.

3. Assign donor representatives — Every donor should have a specific personwithin your organization she can contact by phone or email with questions. Itshould be someone the donor can actually talk to, and the donor should be frequently reminded of this.

The representative should have access to donor records, as that is what mostquestions from donors will be about. They should also have program knowledge —enough to answer questions and even help donors decide what types of projects theymight support. Not many donors use the services of donor representatives, butoffering it increases donor confidence that you are open, available, and truly on her side.

4. Publish a donor-centered newsletter — When asked what they want fromthe organizations they support, donors nearly always say they want newsletters.They want evidence that their giving went someplace real and made a difference.

Most nonprofits still do not have newsletters. Many of those that do havenewsletters that are not donor-centered — they are collections of organizational self-congratulation and minutiae.

Donors deserve better. Use your newsletter to tell stories. Be interesting, evendramatic. Directly address the donor and make it clear what her involvement hashelped accomplish. Report back on how the work is going. Share triumphs andneeds. Open avenues of involvement beyond giving. A donor-centered newsletterwill give donors lots of reasons to love your organization and to give to it.

5. Offer a gift-back guarantee — If a donor has second thoughts and wants hergift back, most nonprofits refund the gift without hesitation. Why not say so upfront? Something like this: “If at any time you are not satisfied that your gift is making a difference, contact us and we will refund it in full for you to use as you see fit.”

Donor Power TacticsContinued from Page 8

Donor PowerContinued from Page 8

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do. Their view may be simplistic andincomplete compared to yours. Butthere’s no reason they should be any otherway. These salt-of-the-earth people arewho they are. Their generosity comesfrom within them, not from externals wemay want to attach to them.

Any attempt to force your donors to conform to your level of taste orunderstanding is not only doomed tofail — it’s the worst kind of elitism.

If you’re donor powered, you’ll listento your donors. Your communicationswill give them more of what theyrespond to — even when it’s not whatyou like. This can be a humbling process.Donors generally respond to simple,pared-down, emotional messages, not the grand, well-built visions that manynonprofits build for themselves. But, asthe retail world knows so well, thecustomer is always right.

Donor-Centered Branding

The branding discipline has sweptthrough the nonprofit world in the last few years. This should be a goodthing — clear identity and consistentmessaging should make communica-tion better.

Sadly, “branding” has largely been ascourge to fundraising, because it isalmost always practiced wrongly. Toooften, the purpose of nonprofit brandingis for the organization to express itself —not to be relevant to donors. The endproduct is a messaging platform thatleaves donor scratching their heads —and less engaged. (The branding exercisealso frequently creates graphics standardsthat reduce readability and require acolor palette that’s a witches’ brew of

Retailers long ago discovered the power of the guarantee. It removes barriers andgives the customer more control. Few buyers take advantage of guarantees, buttheir very appearance empowers potential customers — and donors.

Your finance people will have a fit over this. Don’t let them stop you. Tell themthere’s a New Donor out there, and their continued employment depends onserving that donor!

6. Allow donors to designate giving — Many nonprofits ask donors only forundesignated or unrestricted funds. This is unfortunate — it’s a service to theaccounting department at the expense of your donors. And it’s not acceptable inthe donor-powered future.

Donors respond to specificity in fundraising. As long as you withhold specificity,you are keeping her at arm’s length from her motivations for giving. Let her knowwhat her dollar will specifically accomplish, and she will respond.

7. Offer gift refunds — Suppose you get too much designated money. Take theguarantee idea one step further. Write to those donors whose gifts came after aproject became fully funded; tell them funds are no longer needed for the project,and offer them a choice: A refund of their gift, or the chance to redesignate it toanother project.

You won’t lose many gifts this way, but you’ll reap the rewards of moreempowered donors.

8. Let donors opt in or out — Ask your donor how she wants hear from you.Give her choices for how you’ll communicate with her: mail, telemarketing, e-mail.

Even let the donor opt out of the relationship entirely. The only donors you losewill be people who were going to lapse anyway — after you’ve sent them dozens ofmailings they aren’t responsive to.

Permission is a requirement in online marketing. It would be good practiceanywhere. You no doubt already do this when donors take the trouble to request it.The donor-powered way is to offer it up front.

9. Recognize donors — Don’t let asking be your only form of communicationwith donors. Contact donors (by mail, phone, e-mail) with simple, above-and-beyond thank yous. Find reasons to thank them:

• Milestones, such as the anniversary of her first gift, or reaching meaningfulcumulative amounts.

• When you complete a successful project that she gave to.

• After a successful fiscal year or season.

• During the holidays.

Think of it as a relationship — you can’t go wrong.

Continued on Page 12Continued on Page 12

tasteful but sterile, unreadable, andunmotivating shades — anotherindicator of anti-donor bias.)

Donor-powered branding is based ondonor aspirations, not organizationalself-expression. Branding in thecommercial world often understandsthis: The brand is not about us, it’sabout our customers. The brand imagethat speaks to donors may not make yourheart sing. That doesn’t matter — not toa donor-powered organization.

Serve and Empower Donors

Boomer Generation customers havedriven the demand for faster service,

better quality, more selection, easyreturns, no-questions guarantees.Companies that have met thesedemands have experienced wild success.In the same way, donor-powerednonprofits will learn to serve donorsoutrageously. They’ll serve in large andsmall ways that will make giving easy,rewarding, and emotionally satisfying.

Boomers also demand choice. Ineverything from hamburgers to cars,they’ve grown used to having it theirway — and they attach their loyalty tocompanies that accommodate them.

Donor-powered nonprofits, likesuccessful businesses, will discover therewards of giving choice and power todonors. Let donors designate theirgiving and influence your organization’s

work in other ways. Give them choicesabout how you communicate withthem. Look for ways to be morepersonalized. Talk to donors aboutthings that interest them. (See theaccompanying article beginning on page 8 to learn specific ways to serve andempower your donors.)

Less Mail?

You might think Donor Power willmean you should cut way back on yourmailing schedule and stop annoyingyour donors with all that junk mail.

Not so fast. Donor Power meanslistening to donors, and it happens thatmany of them prefer frequentcommunication and reward it withfrequent giving. Some donors doprefer less frequent mail (and thesedonors tend to congregate at the upperend of your file). If you’re donorpowered, you’ll use your database tolearn who is who and treat themaccording to their wishes.

Donor Power is the future offundraising. But it won’t be easy. Manynonprofits — maybe even most — willnot be able to meaningfully make theshift away from self-focus and give realpower to their donors. Those are theorganizations that will fade as theBoomers move in. Those that do makethe shift, however, can look forward to aGolden Age of Fundraising. �

Jeff Brooks is a senior creative directorat the Domain Group in Seattle. He hasbeen writing fundraising copy and design-ing campaigns for the past 17 years. Hecan be reached at 206.834.1490 or via e-mail at [email protected].

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10. Report back in detailed, personalized ways — The New Donor assumesthe projects she supports are real, and that the money she gives accomplishes specific things. Charity scandals undercut this assumption and feed cynicismabout nonprofits.

The donor-powered organization will work hard to prove to the donor that hergiving is meaningful. A donor newsletter is one way to do this. Another is one-to-one communications that report on her designated gifts: Project-completed reports;progress reports on ongoing projects; reports on projects that face challenges. These things give evidence that the things she supports are real. But even moreimportantly, they show her that her support matters and is appreciated.

11. Make connections between your work and your donors — You may haveexperienced the power of volunteerism, view trips, backstage passes, and other ways ofputting donors close to the work they support. This is more important than ever forthe New Donor. The Internet gives you whole new ways to connect with the donor.The secret is to use real, person-to-person communication, not canned marketing.

Not all donors will take the time to connect with your work, but those who dowill usually be your best donors. And, as with so many donor-powered strategies,just offering it empowers donors. �

Donor PowerContinued from Page 11

Donor Power TacticsContinued from Page 11

My high school sweetheart used tosend me letters that had a hint of herperfume. From the moment I pickedup the envelope and the smell touchedmy senses, my heart would melt. Icouldn’t wait to open her letter. Sheknew how to get me involved.Successful direct mail fundraisingpackages are no different.

The more you can get the readerinvolved in your letter, the more likelythey will be to send you a gift.Involvement starts with the senses, andleads to the heart. If your direct mailfundraising package touches an emotion,you will have a donor.

Here are nine ways to get a donor orprospect involved in your letter.

1. Teaser copy — Good teaser copycan touch an emotion and, like mysweetheart’s perfume, get your letteropened. The key is to tease. My sweetheart didn’t pour the whole bottleon the letter: She dabbed a little on itwith her finger. I get fundraising pieceswhere everything is spelled out on theenvelope. The problem is, I can imme-diately make a decision, and there’s noreason to open the envelope.

Some organizations are testing blind envelopes, which is a differentkind of teaser. These are envelopes withno name or return address, so the recipient isn’t sure who sent theletter. Remember, a little is good.

2. Pictures — The saying “A picture isworth a thousand words” really is true.The right picture on your envelope, let-ter, reply slip, or other insert in yourpackage can have a huge impact onresults.

When selecting a picture for yourmailing, test ugly. Our results haveshown an emaciated dog outperforms thecute puppies in humane society packages.The old, dirty derelict out-performs thehomeless family in rescue missionpackages. If you want to test a cutepicture, use it to show how their gift willmake a difference, i.e., the before-and-after shot.

Be sure to include a caption with yourpicture — especially those on your letteror reply slip. Your reader wants to knowthe name and a little information aboutthe person they are going to help just bylooking at the picture. Look at yournewspaper: Every picture has a caption.

3. Story — One of my fondest mem-ories as a child was jumping into bedwith Dad and listening to stories of cut-throat pirates, cowboys and indians, andknights in shining armor. Everyone lovesa good story.

The Tortoise and The Hare and TheProdigal Son are both classic stories thatalso convey an important message. Welearned “slow and steady” pays off, don’tblow your inheritance partying, and doforgive. Do the stories in your letters

have a message that moves the reader?Does it move them to give a gift?

Instead of having a lot of statistics andfacts in your letter, help the donor relateto your need through a story. Numberswill never melt someone’s heart the way astory will.

4. Compelling Offer — “Buy OneGet One Free” — “Limited Edition” —“Money Back Guarantee” Just as suc-cessful businesses make compelling offersto get someone to purchase their prod-uct, nonprofits must do the same.

We have to state our case quickly as towhy someone should send a gift, andreinforce it throughout the letter.

“I get angry when a child comes to us,because he or she is dying.”

“For as little as $1.95, we can provideone hot meal.”

These types of offers allow our donorsthe opportunity to make a difference, andget them involved.

5. Involvement Piece — “Please gen-tly remove the Bless This House keepsakeand hold it in your hand.” This is thewonderful first line in a letter from Habitat for Humanity. Thewriter asked me to gently (placing a greatvalue on something worth only pennies)remove the keepsake and hold it in myhand. If you followed his instructions,you were sending a gift. He got youinvolved.

14

Nine Ways To Your Donor’s or Prospect’s HeartScott Swedenburg, CEO, Mail Enterprises


200 Pemberwick Road • Greenwich, CT 06830Tel: 203-532-1000 • Fax: 203-532-1654 • [email protected]

• Larry May, CFRE • Diana Estremera • Lauri Palladino • Graham Hunter • Mike Kertelits • Linda Ferruzzi• Don Austin • Don Kuhn, CFRE

May Development Services specializes in the design and implementation of direct response fund raising campaigns with an industry-wide reputation in health-related, socialservice and religious causes. This year alone, MDS will participate in the creation of more than 350 million direct mail fund raising appeals.

Our clients range from small community-based organizationsto many of the largest, best-known national non-profits. Somehave been our clients, and friends, for more than 20 years.

Services include:• Strategic planning• Copywriting and design• Print production & lettershop management• List brokerage & management• Data services• Response analysis

MDS is a division of Direct Media, Inc., the largest provider of mailing list brokerage and management services worldwide.

We have developed packages forhumane societies where we ask the donoror prospect to send a note and a picture of their pet along with agenerous gift. Every time, we get picturesof every kind of pet imaginable, andsweet notes from the pet to the animals atthe humane society. And every picture ornote comes with a gift.

Another involvement piece is a lumpyenvelope — meaning the recipient canfeel something in the envelope, butdoesn’t know what’s inside. Our curiositytakes over, and we have to open theenvelope. The Bless This House keepsakementioned above is an example of alumpy envelope package.

7. Localization — We all want to beinvolved in helping someone in our ownneighborhood or community. You wantto make a difference at home first, andthen help those around the country orworld. Can you take your fundraising tothe local level? One of our customers is achildren’s hospital, which serves a largegeographical area. Their packages aredesigned to highlight a child in the majormarket where their donor or prospectlives. So if you live in New York, yourpackage has a picture and story about achild from New York. These localizedpackages always outperform the generalpackages. Therefore, determine howlocal you can get — state, region, county,city, neighborhood, etc. — and touchsomeone next door.

8. Free — Everyone likes somethingFREE. I don’t care how much money

you have or your level of education.Why do we bring home all that junkexhibitors give away at conferences? Itwas free. Why do we have drawers athome full of mailing labels, greetingcards, and ugly pins? It was all free.

Premiums have become a major part of acquisition and donor renewalmailings. While the cost is higher to include a premium, the response rateand resulting return on investment isusually higher than with nonpremium mailings.

There is a trap, however, that somepremium mailers fall into: The letterfocuses too much on the premium andnot on how the donor’s gift is going tomake someone’s life better. I recentlyreceived a letter, and you would havethought the organization was in thebackpack business.

16

Nine Ways To YourDonor’s or Prospect’s HeartContinued from Page 14

Every other sentence talked aboutreceiving a backpack with your gift of $25or more. At the end of the letter, I stillwasn’t sure what the organization did.

9. Personalization — As the themesong from Cheers suggested: We want togo where everyone knows our name.One of the first places people look onany fundraising letter is to see if theirname is there, and spelled correctly. This is especially true of donors. A loyaldonor wants the organization they sup-port to know their name and the programs that are of interest to them.This is why keeping an accurate databaseis so important. If you don’t have donor information, you can’t personalizeyour messages.

The first step in personalization is test-ing your letters with the donor’s name,last gift amount, and area of interest.

Then, based on your results and howmuch donor information you have, youcan test other areas of personalization.

A word of caution: Don’t overdo usingsomeone’s name. I’ve received letters inthe past where my name was mentioned10 different times throughout the letter.Even my mother doesn’t use my firstname that much in a conversation. That’smaking personalization work against you.

How many of these nine are you usingto melt your donor’s heart? “Wait,”you’re saying. “There were only eightways; you skipped #6!” You are correct,and I did it on purpose. Many of youimmediately noticed #6 wasn’t there, andstarted thinking, why? Is it a typo? Canhe not count? The missing #6 becameyour focus, and got you involved in thisarticle.We have purposely misspelled aword on an outside envelope. The

package was for a literacy group. The firstline of the letter talked about how thedonor knew a word was misspelled, butthe men and women they serve didn’t.

My old girlfriend’s letters made myheart melt. And while she may notbe writing me any longer, a greatfundraising letter can still have the same effect. Teaser copy, a story, aninvolvement piece, or maybe a misspelledword: Explore how you are going toinvolve your reader and melt their heart.It definitely pays off. �

Scott Swedenburg is the CEO of MailEnterprises, which serves the creative, list,printing, and direct mail needs of national,regional, and local nonprofits and business-es. You can contact Scott and requestDirect Marketing Tips, his bimonthly e-newsletter at [email protected].

17

Dear DMANF Member:

Election Day 2004 was a starkreminder that Americans have manydifferences. However, I believe, there is one thing; regardless of yourpartisan or ideological bent, that all of us can concur: The United States is a charitable,giving nation.

We always have been. In fact, nearly two centuries ago, Alexis deTocqueville wrote of charity’sprominence in the American ethic,observing that, “Americans make greatand real sacrifices to the public welfare.They hardly ever fail to lend faithfulsupport to one another.”

The members of The DMANonprofit Federation today carry on this proud American tradition. Ineducation, health, sciences, the arts, andso many other areas, you are raisingfunds and making significant and lastingcontributions that benefit tens ofthousands of men, women, and childrenin the U.S. and around the globe. Yourwork is a societal imperative. It is vital.And it is challenging.

Therefore, as The DMA’s newPresident & CEO, I want to makeexplicit how important you and yournonprofit colleagues are to us.Consequently, I make this pledge to you:I am committed to being your businesspartner and providing you theinformation, tools, and expertise that

equip your organizations to serve theirconstituencies and achieve theircharitable missions.

Also, in light of the political challengesthat face the nonprofit segment of thedirect and interactive marketingcommunity, I am committed to serving as your advocate inpolicymaking and the media. The DMANonprofit Federation has an exemplarystaff, and I look forward to working withthem to foster an environment in whichfundraisers can continue to bring valueto their organizations in the mosteffective and cost-efficient manner withthe least amount of added regulation.

I now have a request of you. To help The DMA and the DMANonprofit Federation serve you betterand more creatively, I need your input.To date, I have spoken to members fromall areas of the direct and interactivecommunity, including many in thenonprofit sector. In fact, in November, I had the pleasure of meeting with manyFederation members here in New York.So, as we move forward, please shareyour views, needs, and ideas withme.Please feel free to contact me at212.768.7277, ext. 1604 or via e-mail at [email protected].

Lastly, as this year comes to a close,I wish you all the best — happiness,good health, and prosperity — in thecoming year. �

18

Get our latestConferenceinformationonline at:

www.nonprofitfederation.org

Letter from The DMAPresident & CEOJohn A. Greco, Jr. President & CEO, The Direct Marketing Association

At Strategic, we’re focused on one thing — fundraising. It’s all we do and we do it well.

After more than a decade in the direct response fundraising business, we’ve become experts in developing the best strategiesfor our clients.

Now, we’re ready to help you succeed in the fundraising game by being your strategic partner. Our high-quality services include …

• Professional, Expert Consulting• Results-Driven Predictive Modeling• Tested and Responsive Direct Mail • Experienced Phone Fundraising• Enhanced Internet Fundraising

To find out how we can help your organization meet its fundraising goals…

Call 651-649-0404 Ext. [email protected]

How to Succeed in theFundraising Game

Think Strategic — and make the right move.

Nathan Dungan pointed out in our September 2004 issue that “if we don’t stem thetide of hypnotic consumption...philanthropy isheaded for a swift and significant decline.” Itseems he’s not the only one who feels this way.Actor and philanthropist Marlo Thomas has justreleased a new children’s book, Thanks & GivingAll Year Long, which is a compilation of personalstories, poems, and songs by a host of celebritiesdedicated to the power of good deeds andkindness. Some of the topics it highlights aresharing and caring, donating to help others, andrespecting Mother Earth.

When families teach their kids the value ofgiving, they do much more than help those inneed; they lay the foundation for their children toexperience generosity and compassion, and tobecome the next generation of charitable donors.

As we reported in our September 2004 issue, weconducted a brief survey of 1000 householdsnationwide regarding charitable involvement andchildren. The objective was to gather informationon what today’s children are involved with to helpmake them tomorrow’s charitable donors.

We asked the following questions:

1. How do you and your children makedecisions to become involved with charities?

2. What vehicles should charities use to reachyou and your family?

The overwhelming response to Question #1 wasPersonal Experience. A full 71 percent of allrespondents in all categories (age, income, location,race, number of children, and education) said thiswas the number one reason they were, or hadbecome involved with, a charitable organization.And 80 percent of those respondents with anincome over $75K or with a college degree stated

20

Charity Begins at HomeJill Murphy, Member Services Manager, DMA Nonprofit Federation

21

that personal experience, such as a family memberor friend with a certain health issue, was the topreason for involvement.

Religious Affiliation (such as outreach to acommunity soup kitchen or religiously affiliatedrelief causes), and Clubs/Sports Activities (forexample, selling candy or greeting cards throughScouting or Little League to raise money) followedas the second and third reasons for engagement.

Direct mail was the preferred method ofcontact in all categories, at 64 percent. It wasfollowed closely by social outreach throughschools, sports, or clubs (56 percent); and aprinted newsletter (51 percent). The nextpreferred method was e-mail, at 19 percentoverall. For those respondents in the westernregions, however, the e-mail preference numberwas slightly higher — at 23 percent. In the 18- to24-year-old range, it rose to 28 percent.

The accompanying charts (pages 20-21)illustrate in further detail how families becomeinvolved with charitable organizations, and theirpreferred methods of contact.

While this was a small foray into the large topicof children’s charitable activities, we hope that youfind the information presented useful in learningmore about your next generation of donors. �

If you would like a copy of the survey responses,please send an e-mail to [email protected].

DID YOU MISS ANY 2004DMA NONPROFIT FEDERATION

CONFERENCE?Limited quantities of the conference resource

books are available FREE to nonprofit federa-

tion members and for a $5.00 charge to oth-

ers. Call Jill Murphy at 202.861.2497.

Spend 30 minutes in front of thetelevision watching Nickelodeon, and,in addition to craving sugary cereals,you will be amazed at the quantity andtype of messages rocketing across thescreen. Consumer advertisingtargeting children has skyrocketed, andthe message is consistent: BUY, BUY,BUY. To combat and control thisonslaught, a growing number offamilies are attempting to pass onfinancial good sense to their childrenby educating them early about solidfinancial management based on theprinciples of Share-Save-Spend.

The last issue of the DMANFJournal featured an article by NathanDungan, author of “Prodigal Sons andMaterial Girls: How Not to Be YourChild’s ATM,” which discussed theseprinciples and how to instill them inchildren. Dungan, whose backgroundis fundraising and development, isideally suited to discuss the charitableprinciple —“Share.”

“In America, we give about twopercent of our income to charitableorganizations,” Dungan recently said.“But, imagine if we gave away threepercent or even four percent? What ifwe could move the needle: Share andsave more, and spend less? It would bequite amazing. And we need to startwith children.”

As direct marketing fundraisers,we’re ideally positioned to help familieswith this challenge by utilizing current

relationships and proven tools. Manyof the donors now acquired throughour direct marketing programs are GenXers and Boomers — parents andgrandparents — and have verydifferent measures of success for therelationship when compared to thetraditional elderly donor. Their

demand for intimacy with a charity —highly personalized service andtreatment — is greater.

Many organizations are maintainingstate-of-the-science relational databasesthat provide “one view” of aconstituent or family’s relationshipwith the organization — as volunteer,service recipient, event participant. Atthe same time, advances in productiontechnology have provided us withcommunication processes and toolswith high levels of customization,

allowing us to speak to these house-holds on a very personal level and toprovide specific, relevant information.As fundraisers, we can use “FamilyPhilanthropy” initiatives to maximizethe value of the relationship with the family when the child is young,while planting the seeds of a futurerelationship with tomorrow’s donors.

Mission Matters

Last year, I began a familyphilanthropy project in my own home.My son, Keegan, who was seven at thetime, has grown up in the nonprofitcommunity, and has even beenfeatured in fundraising appeals.However, he had not ever actuallyresponded to one! Utilizing a productcalled the “Moonjar” (see below),Keegan and I discussed the Share-Save-Spend concept, and he began puttingaside a portion of his allowance eachweek for each category. Severalmonths later, I asked him to thinkthrough what type of charity hewanted to share with, and we begandoing research on the Web todetermine which organization wouldbenefit from his generosity. Aftermuch discussion, he selected WorldWildlife Fund, based, he said, on thefact that “they help pandas”, although Isuspect the offer of a plush animal may have had something to do with it.Like their parental counterparts,children who are helping make familyphilanthropy decisions are also

22

Philanthropy and the Family:How Direct Marketers Can Develop Deeper Relationships With Today’s Donating Households and Tomorrow’s Donors

Kristin McCurry, Vice President, Epsilon

We regardphilanthropy as ahabit of the heartthat should be learned early andpracticed often.

William C. Richardson, PhD

President and CEO

W.K. Kellogg Foundation

influenced by brand, offer, andincentive.

Keegan’s donation, matched withmine, allowed him to become amonthly sustainer for the organization,and since then, he has received ongoingcommunication about the power of hisgiving and the important work he issupporting. I have no doubt he willcontinue to support the organizationthroughout his life because of thispositive experience and early bond.

Religious charities have engagedchildren and families for many years asa natural continuation of tithing.Other organizations, like those thatsupport children’s causes, have a natural tie-in to family philanthropybecause they are able to connectchildren to children. Environmental,conservation, and humane organiza-tions can utilize family philanthropy to connect children to the organizationby involving them in the mission of the organization. National WildlifeFederation, for instance, has created an opportunity in this niche throughtargeted fundraising or communicationtools that focus on the family, includingmagazines and other publications,lesson plans, and a “Kidzone” page ontheir Web site.

Direct Marketing Messages That Work

Today’s parents are looking to thecharities they support to help themteach their children about charitablegiving and how their gifts can changethe world around them. Organizationscan effectively tap direct marketingchannels to provide their constituentswith these opportunities, providing

23Continued on Page 26

uncommonlycreativeToday's fundraising climate requires a creative approach—not just in themessaging of your program—but in the way you build lasting relation-ships with your donors. Above all, you need to overcome obstacles to create a healthy return on your investment.

Newport Creative has been producing high-performance direct responsefundraising programs since 1985. Innovative strategy. Award-winningcreative. Insightful reporting and analysis. Cost-effective production. Weinvite you to check out our uncommon approach to unusually good results.

Contact Kelly Mahoney at 781-934-1414or [email protected]

www.newportcreative.com

25

August 11 – 12, 2004 Waldorf=Astoria, New York, NY

2004 NEW YORKNONPROFIT CONFERENCE

inherent value to the parents andbeginning a lifelong relationship with children.

Most family philanthropy initiativesdriven by direct marketing can betargeted at parents or to the family as awhole. As with all messages deliveredthrough direct channels, it is importantto be aware of and comply with theregulations and policies in place,particularly because children areinvolved. Before you begin, do yourhomework and read up on currentguidelines including the Children’sOnline Privacy Protection Act(COPPA).

Child sponsorship, throughorganizations like Save the Children

and World Vision, has providedthousands of supporters with theopportunity to make giving a familyaffair. “Families are interested in usingsponsorship programs to teach theirchildren about philanthropy,”according to Connie Snapp Debord,fundraising consultant. “Throughresearch at World Vision, we foundthat half of the sponsors were youngfamilies with children in the home. Ofthese, over two thirds of the sponsorswere using the program to teach theirchildren about philanthropy. We thenwere able to target families through thefamily sponsorship program, and it wasone of our most successful productlaunches ever.”

In addition to helping parents teachtheir children about charity,organizations can also provide tools thatshare information about the

organization’s mission. Easter Sealsrecently produced a coloring book forthe parents and grandparents on itslarge file that could be used in the livingroom or the classroom to teach kidsabout children with special needs (seephoto, below.) Donors who had alreadymade a direct marketing gift wereselected by age, and those with a highlikelihood to be parents or grandparentswere mailed the piece, with illustrationsof children, including those withdisabilities, and colorful stickers to beused with the book. The package alsoincluded some background on why thecoloring book was developed, and howto talk to children about disabilities.Easter Seals hopes the package will allowdonors who were already actively givingto Easter Seals to expand therelationship to their families.

Bounce-back devices such as greetingcards, holiday ornaments, book plates,and others are being effectively used bymany charities to lend credibility totheir appeals and provide donors with atangible connection to the work theysupport. These pieces can provideparents with a way to engage theirchildren in the giving process by fillingout the bounce-back device, andmaking a gift together. This processhelps parents explain that the bounce-backs will be returned to someone whois being helped by the organization,making the process much more real forchildren as well. Appeals with a familyphilanthropy slant can also offeradditional copies of the bounce-backfor use by the donating family as well,particularly when the device is acoloring book, map, or other “kid-friendly” item. Because the pieces aretypically inexpensive, bounce-backs can

26

Philanthropy and the FamilyContinued from Page 23

be overprinted to allow for fulfillingthese requests from parents, and cankeep the organization front-of-mindlong after the check has been mailed.

Charities may also decide to take amore active role in helping parents withthe overall challenge of teachingfinancial management by using banks asa premium or freemium as a part of theirfamily philanthropy initiatives. Thereare several promotional items availableon the market, including the one I usedpersonally with my son. MoonjarMoneyboxes (www.moonjar.com) havebeen successfully co-branded by charitiesand used to promote the sponsoringorganization as the beneficiary of the“Share” portion. The boxes, which areessentially cardboard banks with threedivided sections that fold flat, can bepurchased and easily printed with the

charity’s logo. The charity is then able tomail the Moonjar to selected donorfamilies, providing parents with thisvaluable teaching aid.

Ties That Bind: DrawingParents and Children Into Your Organization

Family philanthropy initiatives canprovide organizations with a growingsource of revenue and can be bolstered,like all donor relationships, withadditional involvement with theorganization. The Web is an idealchannel for creating virtualcommunities online, connectingsupporting families with more mission-related information to deepen theircommitment. Magazine or otherpublications for families or childrencan also provide another outlet for

bonding them to the charity.

Charities with opportunities for fullfamily volunteering, like missions andfood banks, can truly engage parentsand children by allowing them tospend time together helping those inneed. Research conducted by theDaniel Yankelovitch Group (DYG) hasdeepened our understanding of whattoday’s — and tomorrow’s —volunteers are looking for in theorganizations with which they becomeinvolved. They want to believe theirvolunteer time is spent meaningfully,and that it reflects their own personalvalues and ethics. Further, DYGreports that volunteers increasingly saythey want to be regarded as “who theyare,” not just for “what they have.”

27


America’s youth, in particular,represent a significant opportunity for those organizations who cansuccessfully engage them as volunteers.The Independent Sector’s report,“Engaging Youth in Lifelong Service,”published November 2002, found thatthe practice of volunteering begins,many times, in early years. In fact,two-thirds of adult volunteers surveyedbegan giving their time as children. Inaddition, young volunteers are morelikely to contribute to charities whenthey get older, meaning organizationsestablishing relationships with youthand cultivating those relationships intoadulthood stand to substantially

benefit from the future generosity ofthese valuable constituents.

Over the last few decades, America’scharities have recruited millions ofvolunteers through fundraising specialevents. Many of these havesuccessfully focused on families orchildren as either the sole or primaryaudience, including the March ofDimes’ Walk America; ALSAC/St.Jude’s Math-a-thon; and Jump Ropefor Heart, brought to thousands ofschool children in the United States bythe American Heart Association.

Direct marketers can use thisvolunteer information as a springboard to continuing the donorrelationship by recognizing thecontribution of families, and engagingparents in an ongoing dialog about

their favorite subjects — their children!This type of customer relationshipmanagement approach can be used todevelop family philanthropy initiatives,utilizing direct marketing, to moreeffectively fundraise to Americanfamilies and to foster relationships withfuture donors. �

Kristin McCurry is a vice president,general manager in the FundraisingDirect Response Division of Epsilon. Inthis role, she is responsible for the strategicdirection and program management ofclients including Easter Seals, theSmithsonian Institution ContributingMembership, Save the Children, AARP,and March of Dimes. She can be reachedat [email protected].

28

Philanthropy and the FamilyContinued from Page 27

If you are in the business of raisingfunds for nonprofits and you read atitle like “Not all donors are createdequal...” you are tempted to completethe sentence in a variety of ways.

Those running cultivation programsmight say “not all donors are createdequal...and they shouldn’t be treated asequals either.” Those who developmajor gifts might say “Not all donorsare created equal...and their wealthindex should be analyzed for major gift potential.”

While these are both solid ways tocomplete this sentence I’d like to takethis discussion in a little differentdirection. For the sake of this articleI’d like to focus specifically on the twowords “created equal.” Let me explainvia a personal story.

Driving to a recent fundraising event for my children’s school. I was struck by a stark reality — thepopulace of their school was extraor-dinarily homogenous. A huge percentof the parents lived in one particularpart of town, owned homes notsignificantly different than others andin many cases even worked for thesame major corporation.

You would think this body of look-a-likes would generate a ratherflat donor pyramid, but surprisingly,this group’s donations produced agradation of gifts not unlike many

national nonprofits. A few large gifts atthe top, some medium sized gifts in themiddle, and a lot of smaller gifts at thebottom. The geographic, demographicand even sociographic composition ofthis group was almost identical. Sowhy the big divergence in giving?

Now fast-forward to another event— A group of major donors gather fora special event to launch a newprogram for a regional non-profit.These signif-icant donors are beinghonored for their generosity,specifically a minimum gift of $10,000to this cause. The brand newCommunications Director for thiscause had hired a photographer toproperly memorialize the event for herupcoming newsletter. Not only was shenew to this non-profit, but she was alsonew to non-profit work. This eventwas her first and she was lookingforward to meeting the toast of society.

After the event she looked back atthe photos in amazement at the varietyof characters represented in the room.Outside of their passion for the cause,these attendees were as varied inappearance and background as jellybeans in a jar. Why are thesesignificant donors so varied in theirmake up? What can we learn from this smorgasbord of donors who giveso faithfully and so significantly to our causes?

The title of this article is “not alldonors are created equal,” and whilethat is the answer to the questionsposed above, I’d like you to considerthis answer from a differentperspective. I’d like you to considerhow these donors were “created” in thefirst place.

How donors are “created” fall intotwo categories. First, life creates adonor and second, a non-profit createsa donor. To be more specific, life“creates” a donor and the nonprofit“births” and then “grows them up.”

By way of another analogy, let meunpack this statement. Think for amoment about a Harley Davidsonowner. Harley Davidson is now moreof a state of mind than a motorcycle.People who never rode motorcyclesbefore are buying Harley’s motorcycles,joining clubs and riding across thecountry in leather pants and bandanas.Life created these bikers, but Harleybirthed them. In much the same waylife creates a donor, people’sexperiences, parents, education,religious affiliation or lack thereof allcombine to create a state of mind thattranscends demographics.

A donor mentality, much like aHarley biker’s state of mind, growswithin an individual over time.Unfortunately, this mindset can’t

29

Not All Donors are Created Equal...Max Bunch Sr. Vice President, The Stratmark Group


be seen or detected without theintroduction of one critical factor…a crisis.

Forgive my overuse of metaphors (thepeople I work with are tired of me doingthis), but I’m using the word “crisis” hereto describe the process of introducing anevent that demands a response. From thisresponse and the details that surround it,one can detect the varied levels ofindividual commitment.

For example, 50 men and women areon a bike trip through the country side.They pass an abandoned car. Twentybikers slow to investigate because the caris parked in an unusual manner. Tenbikers actually stop and confer about thesituation. Finally, three bikers actually getoff their bikes and walk through the grassto the car. The three bikers find a manwho has suffered a heart attack. Onebiker calls 911, one biker checks the pulseand one gives CPR.

Fifty bikers left the starting linelooking just alike. Twenty bikers evenslowed to notice the car, 10 stopped butonly three bikers donated their time andhelped. All fifty bikers crossed the finishline that day and it is your job, withouttalking to the bikers, to determine theidentity of the good-hearted donors.The task is pretty easy; you just have tofigure out the clues and have access to theright data.

The details imbedded in the response to this crisis show the level ofcommitment one can find in theseindividuals. For nonprofits, the crisis is a

carefully crafted acquisition and follow-up program that will yield enough detailsfrom which one can determine how thedonors were created.

It is the collection of as much data aspossible and the measurement of theresults that affords the nonprofit theability to predict which donor will betemporal and which donor will havelong-term value. Within this process are several factors that can help predictlong-term value.

Which message was used? Whatmedium showcased it? Did it come froma conference, a rented list, television,radio, the Internet or an event? Did thedonor respond to a premium, a magazine,a newsletter, an e-mail? Did the donoralso respond to a call to action, sign apetition or request material? Did they givetheir e-mail address, share a prayer requestor call a hotline?

These creation factors may seemsimple, but when combined with basicgiving history they become the DNA thathelps nonprofits evaluate importantinvestments in future donor relationships.While it is true the longer a donor is onyour file, the more you will know abouttheir long term value, there are still manyindicators that can help you determinedonor value, but only if the informationis properly harvested at the inception ofthe relationship.

The beginning of a relationship says alot about its long-term value. I havenothing against people who met in bars,but their chances of staying happilymarried for years to come are probablylower than those individuals introduced toeach other by caring friends. The friends

helped do the information gathering andhelped facilitate the process.

With that said, however, how can youexplain the countless people who havebeen married over 50 years and say thesame thing about their spouse, “I knewwe would get married after the firstdate.” How is that possible? How canyou predict something that importantand profound from just one date? Theanswer can be found in the mostcomplex computer known to man, thehuman mind.

Within the confines of that first date,the mind processed information aboutcompatibility and completeness that itpicked up from thousands ofinteractions happening in millisecondsof time. This happens at a level so deepwe are unable to express these keyindicators but the resulting comment isthe same, “I knew we would be marriedafter the first date.”

As direct marketers and specificallynonprofit direct marketers, our first date is the acquisition of the donor.Our job is to construct an acquisitionthat yields as much information aspossible to make our marriage successful.Yes, sometimes it helps to be introducedby close friends (donor lists or provenmedia) but the real predictor of therelationship will be found in theinformation that is purposefullystructured in the confines of receivingthat very first gift.

So, to complete the sentence started atthe beginning of this article, “Not alldonors are created equal,” make sure you have a proven process in place toevaluate their potential quickly . �

30

Not All Donors are Created EqualContinued from Page 29

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32

The Chesapeake Bay Foundation(CBF) was founded in 1967 with twoprincipal goals: to improve waterquality by reducing nitrogen pollution;and to train Chesapeake Bayconstituents to take an effective role inrestoration and protection of the area’snatural resources throughenvironmental education and advocacy.

CBF has 15 education centersthroughout the 64,000 square-milewatershed, with 116,700 active

members and an annual budget of$17M, of which 90 percent is privatelyraised. Overall, CBF environmentaleducation programs reach as many as200,000 people annually throughteacher trainings, classroom curricula,and restoration projects.

CBF utilizes e-mail marketing andthe Internet to communicate ourmission and demonstrate ourprograms. This helps us strengthenour connection to the public. Our

members help CBF conserve preciousresources through their onlineinteraction, which allows us to contactthem more efficiently about urgent Bayissues.

In the past two years, CBF hasincreased its e-mail address growth by116 percent, and the average length ofvisits to its Web site has increased fromless than 3 minutes per user to morethan 10 minutes. Online donations toCBF grew 315 percent from 2002 to

This issue, we recognize:

Chesapeake Bay Foundation

A feature highlighting Federation members

33

2003, and the average gift size grewfrom $54 to $85.

CBF is headquartered in Annapolis,Maryland, and has state offices inMaryland; Washington, DC; Virginia;and Pennsylvania. �

Headquarters:Philip Merrill Environmental Center6 Herndon AvenueAnnapolis, MD 21403Tel: 410.268.8816www.cbf.org

Would yourorganization liketo be featured inMember Spotlight?

Contact UsWe look forward to hearingfrom you about MemberSpotlight or about anythingthat will help us to betterserve our members andfriends in the nonprofit community.

1111 19th Street NW, Ste. 1180 Washington, DC 20036

Phone: 202.628.4380 [email protected]

Xenia “Senny” Boone, Esq.Executive [email protected]

Helen LeeConference [email protected]

Jill MurphyMember Services [email protected]

One of the important things TheDMA Nonprofit Federation(DMANF) does is influence othersabout nonprofit direct marketing.“Others” include our bosses and boardmembers; the press; local, state, andfederal legislators; governmentadministrators; the courts; and ofcourse, the public.

Last summer, I participated in aDMA Nonprofit Federation “Day onthe Hill” led by Senny Boone,DMANF executive director, and MarkMicali, DMA vice president ofgovernment affairs. Our group ofnonprofit direct marketers met withseveral senators and representatives toexpress our views on issues of the day,including postal reform, and the SenateFinance Committee hearing oncharitable oversight.

I have trekked to the Hill before, as alone advocate and as part of a group.The process can be an emotionalrollercoaster, including the fear ofbeing exposed as a clodhopper-dimwit,(speaking only for myself ). But it alsobrings a rewarding feeling of steppingforward to represent nonprofits.Explaining how policy affects ourorganization through examples of dailywork can be exhilarating, although Iwould be remiss not to mention it isequally frustrating. Minutes aftermaking your point, you are back againin the halls of Congress wondering if

you said everything you came to say,and wondering what impact you willhave on the final outcome.

The experience reinforced my beliefthat practitioner-advocates (as I will callus) are critical to shaping legislation and regulation. Issues important tononprofits are in competition forattention, whether before the USCongress, state attorneys general, postal service officials, or your localcouncil members. Showing up matters.Writing a letter matters. It turns up our volume, and increases our relevanceas a group. That is why each of us must get involved.

I often wonder how the refinement ofthe person pitching an argumentcorrelates to the influence on thetargeted government official. There aresome qualifying distinctions, of course.Association executives, especially inWashington, are expected to have acertain bearing, intelligence, way withwords, and depth of understanding.That is not to deny there are many well-spoken practitioner-advocates among us.Kelly Browning of American Institutefor Cancer Research, for example, waswith us that day on the Hill, as wereseveral other members with poise and substance.

The rest of us — we practitioner-advocates — only require a basicawareness of the simple truth. Our

34

Answer the Call to Action!Phil Claiborne, Chair, DMANF Government Affairs Committee

COOPERATIVE MAIL RULE GUIDANCEPrudent Contracting with a

Professional Fundraiser

For a copy of thisimportant document, go to

www.nonprofitfederation.org

truth, explained by example, can beconvincing no matter how poorlyattempted. Even a poorly penned letterstill works, if from the heart. Thisshould encourage those among us whoare rather timid and concerned abouthow they come off — as I once was.

You do not have to abandon yourschedule to spend all day readinglegislative tomes to get involved. TheDMANF is providing timely analysis oflegislative and regulatory issues for you.You must only be vested in the effect ofthe policy, and aware of the generalimpact on your own organization, or theorganizations you serve (if a serviceprovider). It is not just your boss’s job; itis yours, too. Have faith that yourparticipation is important, and resistthinking someone else is doing the actualwork: they are not! Think of theDMANF leadership as a team coach.We, the players, must do our part.

I encourage new nonprofit fundraisersand administrators to get involved byjumping in feet first. You can be “the

expert” back at the office while askingnaive questions at a DMANF meeting,or approaching a speaker “offline”: Wewill not tell. Passion and motivation arekey. We can help with the rest. Forexample, here is your first nonprofitadvocacy letter.

Dear Representative Smith:

Today is my first day. I work in thefundraising department of ________, anonprofit charitable organization that helps________. I noticed right away there aremany regulations governing our activities.You should know I care about the success ofmy organization’s mission, and aboutfulfilling the various requirements upon us,assuming they have a valid, balanced impact.My organization is a member of The DirectMarketing Association Nonprofit Federationbecause we care about ethical fundraising.

I am writing for several reasons. First, weexist. We are important to this community.Second, because I care about legislationaffecting us, I intend to periodically provideyou a “boots on the ground” viewpoint.Third, I acknowledge that your vote affectsthe issues I care about, even if I am not fully aware of how policy is decided onCapitol Hill.

35


Participate in our MEMBERGET-A-MEMBER PROGRAM!It’s a win-win opportunity for any employee of a DMANF member organization who refers another organization for membership. When thatorganization joins,* the referring party receives:

A $150 discount to The DMANF Conference of your choice!

PLUS, Mal Warwick’s new book FREE!

Contact Member Services Manager, Jill Murphy at 202.861.2497 or [email protected] TODAY for more information.

*Dues must be received from the new member organization to obtain discount.

Please visit our Web site atwww.millard.com

or call us at 603-924-9262.

CRITICAL ISSUESCONFERENCEApril 14, 2005

Washington, DC

Register by March 10, 2005and Save!

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36

If you have a particular view of the work wedo in the nonprofit sector, I welcomehearing from you.

Sincerely,[your name]— a caring constituent.

Letters like this serve to develop anongoing relationship with yourrepresentative. Consider contacting thelegislator’s local office, too, where there isoften a better chance to spend moretime with the staff and possibly meetwith your representative personally.Respect the staffer. Work to establishtheir awareness of your organization. It can really help when somethingimportant needs doing.

Let them know you are a DMANFmember, so they know you are in touchwith the nonprofit sector as a whole.

This process works. For example,DMANF members participated insoftening the compliance requirementsof the Nonprofit Integrity Act of 2004in California. Had our membersremained silent, their ability toeffectively raise funds would have beendiminished. Challenges like this comefrom many directions with varyingmomentum — be they legislative,regulatory, or public opinion. ThisCalifornia law requires continuedmonitoring and reaction fromfundraisers in the state.

The DMANF’s ability to “ramp up” aconstituent response is based on yourpreparation and willingness to act. Theday may come when the DMANF callsfor you to ask others in your organizationor membership to join us in a grassrootseffort to support critical legislation suchas postal reform. Becoming an “activist”today will ready you. You will become a

participant, not a sideliner, andeverything else you do for yourorganization will have more meaning.

The DMANF vows to provideongoing content and encouragement foryour advocacy through the “NewsUpdate,” our electronic newsletter. (Ifyou are not receiving it, send an e-mailto [email protected]).For in-depth analysis on recent non-profit issues, go to The DMA Web siteand click the “Current Issues” tab. �

Visit the online DMA LegislativeAction Center by going to The DMA’shome page, and entering “Gov’t Affairs & Ethics/Laws and Policies AffectingMarketers/Write Your CongressionalRepresentative.” Select the Action Alerts to load a prepared message you can editand fax or e-mail to your representative or senator.

Answer the Call to Action!Continued from Page 35

Direct Marketing PointersBrought to you by Lindy Litrides, Litrides & Associates

• Response tells you if your appeal was successful — not what management or volunteers think about it. • Donors “vote” on which organizations & appeals touch their hearts through their wallets. • Scrutinize acquisition list results in detail to find pockets of people who identify with your cause. • There are no bad times to raise money, only bad reasons.

Lindy LitridesLitrides & AssociatesP.O. Box 422178Atlanta, GA 30342Tel: 404-705-9567 • Fax: 404-705-9719E-Mail: [email protected]

Lindy Litrides is founder and principal of Litrides & Associates, a firm specializing in direct response fundraising and privacy-friendly marketing solutions for nonprofit organizations. The firm also provides analytical services and business operations consulting including developing procedures, policies and systems that help nonprofit organizations comply with ethical business practicesand privacy laws and regulations.

Nonprofit organizations of all sizes arefacing considerable challenges as theyreach out to members and supportersusing e-mail. The advantages of thiscommunication method — instant, low-to-no-cost access to an organization’saudience, with personalization andtracking capabilities unavailable viadirect mail or telemarketing — remaincompelling, but are rapidly beingundermined by spam. As the volume of unsolicited, objectionable andfraudulent spam increases, e-mailrecipients are understandably raisingmore barriers to delivery in order toprotect their inboxes. Brightmail, ananti-spam technology provider, predictsthat unsolicited messages will increase to65 percent of all e-mail in 2004. Fornonprofit mailers, this increase inunsolicited messages means increasinginbox competition, and proliferatingdeliverability barriers, as recipients adoptanti-spam measures to control the floodof unwanted commercial messaging.

Legitimate messaging by nonprofitscan get caught up in these anti-spamdelivery barriers, but this “collateraldamage” is often considered anacceptable cost of controlling the spamflood. Organizations need tounderstand how technical and legaltrends in spam controls will impact theoverall deliverability of their e-mailcommunications, and what they cando to ensure their messages reach theinbox. Strict adherence to bestpractices in regard to permission-based

list building and e-mailing will becritical if nonprofits want to continueto enjoy the benefits of this form ofcommunication.

Increasing Barriers to Delivery

Nonprofit e-mail publishers areincreasingly becoming aware thatdelivery of e-mail to their members orsubscribers is no longer assured.Organizations hear from memberscomplaining that they are not gettingrequested publications, or have to dealwith mail system administrators thathave “blacklisted” their e-mail domain.While undeliverable e-mail has alwaysbeen an issue because of address churn,the rapid adoption of anti-spamcontrols by e-mail providers andrecipients is raising significant newbarriers to delivery.

Messages may be blocked fromdelivery or filtered into junk folders.Current anti-spam controls haverelatively high false positive rates —inaccurately stigmatizing legitimate e-mail as spam and barring its delivery.New subscribers may never besuccessfully added to e-mail listsbecause of the barriers raised bychallenge-response systems. A recentstudy by Return Path, an e-mailperformance management company,demonstrates how serious thedeliverability challenge has become.Top ISPs vary widely in the proportionof opt-in e-mail that they deliver tosubscribers, with some major ISPs

blocking up to 38 percent of legitimatemail! Responding to delivery barriershas become a major challenge for e-mail publishers, because so manydifferent types of blocking and filteringsystems are in use.

Failed Legal Solution: The CAN-SPAM Act of 2003

The risk that the increasing flood ofspam poses to legitimate uses of e-mailhas not gone unnoticed in the politicalarena. After the federal CAN-SPAMAct came into effect on January 1,2004, many hoped that changing thelegal ground rules governing spamwould improve the situation. Whilethe law has provided some new toolsfor bringing the worst spammers tojustice, its impact overall has beennegative. Numerous studies havedemonstrated that the total volume ofunwanted e-mail has increased since itspassage, accelerating the adoption ofanti-spam controls by frustrated e-mailrecipients. CAN-SPAM preemptedstricter state laws regulating spam, andlegitimized sending unsolicitedcommercial e-mail, as long as themessage: 1) is not fraudulent orpornographic; 2) includes a validaddress for the sender and acommercial label; and 3) enablesrecipients to opt out of furthercommunications. CAN-SPAM’sadoption of an “opt-out” standard fore-mail messaging has, of course, not

37Continued on Page 38

E-Mail Deliverability in the Age of Spam:Navigating New Paths to the InboxBill Pease, Chief Technology Officer, GetActive Software

been accepted by major ISPs, whichrequire that publishers send e-mail onlyto subscribers who “opt in” to receivecommunications, and continue todeploy new delivery barriers weekly toblock unsolicited e-mail.

Searching for TechnicalSolutions

As legal efforts to control spam havefloundered, there has been increasingdemand for technical solutions. In themarketplace, this is reflected in thegrowing number of spam controlproducts, aimed variously at individualusers, enterprises and ISP’s. While e-mail recipients are gaining access totools that can effectively control spam,this actually increases deliverabilitychallenges for legitimate e-mailpublishers. You have probably alreadyencountered delivery barriers createdby ‘solutions’ that rely on “challenge-response,” “whitelists,” “blocklists,”content filters, distributed spamdetection networks, etc. Since barriersmay be raised at multiple points alongthe path an e-mail takes to the inbox, itis often quite difficult to ascertainexactly where or why your messaging isbeing blocked. Because few of thesystems in use are interoperable,solving a delivery problem associatedwith one product or recipient e-mailsystem does not necessarily help withthe next barrier.

While no anti-spam solution appearspoised to dominate the market, it hasbecome apparent that e-mail abuses canbe controlled only if solutions can tap

into a common infrastructure thatsupports authentication of a sender’sidentity, construction of a publisher’sspam reputation, and certification of ane-mail list’s permission basis. Technicalefforts are proceeding rapidly on allthese fronts, and will soon begin toimpact e-mail publishers. As part of alarger effort to control online identitytheft, brand spoofing, and phishing, aninitial step toward sender authenticationis already being deployed. Sender PolicyFramework, or SPF, requires publishersto identify the mail servers that areauthorized to send e-mail in their nameas part of their DNS records. AOL was set to begin to use SPF in itswhitelisting and spam control programsin Fall 2004. Companies like Ironportare building public databases likesenderbase.org to track the mail volumeand spam complaint rates of all e-mailpublishers. Companies like TRUSTeare providing third-party certification ofthe opt-in status of e-mail lists tosupport various whitelisting programs.

What to Expect in 2005

Proliferating spam controls at multiple levels will make it harder toidentify and resolve deliverabilityproblems. In the past, being “whitelist-ed” by a major ISP has generallyensured your message gets to the inboxof your recipient. However, most ISPsare now responding to consumerdemand for more spam control tools byenabling recipients to operate their ownpersonalized blocklists, whitelists, andcontent filters.

As such controls proliferate, it willbecome harder to identify when andwhy messages are not delivered, orwhom to contact to resolve a deliver-

ability problem. Messages can beblocked by the recipient, their spamcontrol software provider, operators ofblocklists they rely on, or any combi-nation of these groups.

Organizations will increasingly beheld accountable for their own mail-ing practices. Generalized whitelistsare falling out of favor at ISPs becausethe list-building and messaging prac-tices of individual clients vary, andgeneralized whitelists allow “spam-mers” to hide among legitimate mailersto get unwanted mail delivered.Sender authentication and certificationschemes are actively being promoted:These will enable ISPs or recipients toaccept or reject messages based on eachpublisher’s mailing reputation.

Recipients will continue to be con-fused about the safe way to unsub-scribe from a list, and spam reportsby recipients will increasingly triggertransient blocks of your messaging.Use of the opt-out tools provided inresponsible permission-based e-mails is at an all-time low — with recipientswho want to leave a list using themless than 10 percent of the timebecause of widespread distrust thatsuch mechanisms are used by spam-mers to verify e-mail addresses.Distrusting the opt-out tools providedby publishers, recipients are reportingopt-in messages as “spam” to ISPs or blocklist services in order to get off a list.

Because existing systems do not dis-tinguish spam reports from unsub-scribe requests, many nonprofite-mailers are acquiring a reputationbased on these complaints, which thentriggers subsequent blocking action.

38

E-Mail Deliverability inthe Age of SpamContinued from Page 37

What Should You Do?

Adhere strictly to permission-basedmessaging. Don’t be tempted byCAN-SPAM’s legitimization of unsolicited messaging and opt-out.Nothing in the new federal lawrequires ISPs to deliver e-mail to recipients, and ISPs are simply raisingmore barriers to block unwanted mail.The anti-spam community continuesto object to opt-out, and insists thatonly double opt-in demonstrates arecipient has granted permission formessaging. Strong consent-based inboxcontrol systems are being adopted rap-idly (e.g., address book-based whitelist-ing, challenge-response). The bestdefense against blocklisting and publicstigmatization of your organization as aspammer remains strict adherence toopt-in list-building practices. This maymean changing current list-buildingpractices that focus on acquiring e-mailaddresses and overlook permission,such as co-registration, list sharing, etc.

Pay attention to all spam com-plaints. Don’t ignore complaints fromrecipients that your messaging isunwanted. Complaints are a potentialindicator of problems in your organiza-tion’s list-building practices: You maynot be acquiring explicit permission tocommunicate via e-mail. More andmore complaints are being fed intosophisticated, distributed spam identifi-cation networks, which are then used toguide further spam control efforts.AOL, for example, keeps a daily reportcard on the number of complaints thatmessages from your domain generates,and then utilizes these complaint rates todetermine whether to raise additionaldelivery barriers. Even a few abuse complaints can generate serious conse-

quences, as systems like SpamCop cantrigger blocklisting based on very lowcomplaint thresholds (on the order ofone complaint in one million messages!).

Partner with an e-mail providerwho understands the landscape. It isimportant to partner with an e-mailmessaging provider who has strong rela-tionships with ISPs, and who has a thor-ough understanding of how to complywith ongoing legal and technical devel-opments in spam control. Thesechanges, combined with the prolifera-tion of a variety of anti-spam products,leave organizations facing considerablechallenges to ensure that e-mails theysend reach the inbox. Your e-mailprovider must be a partner in helpingyou navigate the shifting landscape thatgoverns mass e-mail communications.Without careful attention and planning,you risk having valuable communica-tions blocked based on their origin, orfiltered directly into bulk mail folders.

An e-mail provider’s topdeliverability objectives should be toensure the successful distribution ofyour mail, and to help protect yourreputation (i.e., not being labeled as a

spammer). Providers should havespecific measures in place to ensure thatboth industry standards and clientexpectations for e-mail deliverability aremet. These measures should include:

• “Whitelist” status at ISPs.Whitelisting is a designation thatallows high-reputation mailers toautomatically bypass ISP filters andblocks, and to avoid content controlsthat mangle HTML messaging (e.g.,refusing to display images, makinghyperlinks non-working). It is, inessence, a spot on the VIP list to aparty that is becoming increasinglycrowded and difficult to get into.

As a much sought-after invitation,whitelisting requires compliance with avariety of ISP policies (e.g., propermanagement of soft and hard bounces,adherence to opt-in standards,complaint-based feedback loops), andrequires diligent attention from your e-mail provider in order to maintainwhitelist status. Without this whiteliststatus, it would be extremely challengingfor an e-mail provider to maximizedeliverability of outbound messages.

39

Legitimate messaging by nonprofits can get caught up in these anti-spam

delivery barriers, but this “collateral damage” is often considered

an acceptable cost of controlling the spam flood.


• Flexible software functionality to meetchanging industry requirements.Knowing the importance of keepingup with policies implemented bymajor ISPs, it is critical that your e-mail provider have the ability toadapt their technology to meetevolving industry requirements. Youwant to ensure that deliverability ofyour e-mails isn’t compromised whenthe rules change. For example, theability to define different levels of opt-in (e.g., single opt-in, single opt-inconfirm, double opt-in), as well as theability to automatically unsubscribeindividuals with a single click arevaluable features to have within youre-mail technology.

You also want to ensure that yoursystem handles e-mail bouncesaccording to ISP industry standards.As of this Fall, your e-mail vendor alsoneeds to comply with the senderauthentication requirements ofdifferent ISPs. �

Bill Pease is the chief technology officerof GetActive Software. He has spent hisprofessional life working for community-based and public-interest organizations,and has become one of the leadingInternet strategists for the nonprofit com-munity. Bill founded GetActive Softwareafter building several award-winning Web services for Environmental Defense,including ActionNetwork.org andScorecard.org. Bill specializes in the designof Web applications that are critical tononprofit business practices.

40

Recent Data Shows Decline in NonprofitEmployment, EarningsBy John S. Irons and Gary Bass; Reprinted with permission from OMB WatcherAugust 23, 2004, Vol.5, No.17:

On August 19, 2004, OMB Watch released a new report, “Recent Trends inNonprofit Employment and Earnings: 1990-2004,” which examines the recent histo-ry of employment and compensation trends in the nonprofit sector. It found thatwhile growth in nonprofit employment continued during the 2001 recession andimmediately after, it stalled over the past year, with significant declines in averagehours worked, weekly earnings, and hourly wages. Data on individual states reflectthis nationwide pattern.

According to government data, employment in the nonprofit sector has grown byonly about 0.5 percent in the year ending July 2004 — which is well below its aver-age rate of 2.4 percent annual growth over the past 15 years. Average weekly earn-ings dropped significantly over the past year, indicating a weak labor market. Thiswas due in part to declines in both hourly compensation and the average number ofhours worked weekly, which had been stable through early 2003.

In the year ending June 2004, real (inflation-adjusted) weekly earnings fell by 5.2percent. Also during this time period real hourly earnings fell by 3.9 percent. Thenonprofit sector of the economy is traditionally asked to help support the nation intimes of economic weakness, and is currently expected to make up for reductionsin publicly provided government services. The current data indicate that the sectoris being asked to do more with less labor input.

Why does this matter?

The nonprofit sector is a large part of the economy, employing millions of people(nearly 11 million in 1998, according to Independent Sector) and supporting the volunteering efforts of millions more. A downturn in this important sector is harmfulfor the overall economy.

Nonprofit organizations are also asked to perform a wide variety of public services,such as sheltering the homeless, providing support for the elderly, protecting theenvironment, promoting children’s welfare, building parks, promoting the arts, andso on. A downturn in this area has consequences that extend far beyond the non-profit organizations themselves.

Finally, cutbacks in government services as a result of Bush administration policiesand state budget crises will place even more demands on the nonprofit sector,which is being asked to do more with fewer resources. While many organizationswill be able to struggle to get by, the current situation cannot continue without seri-ously harming nonprofits, the issues they care about, and the people they serve. �

The full report may be downloaded at http://www.ombwatch.org/article/articleview/2347/

Gary Irons, Ph.D., is the founder and executive director of OMB Watch. John S. Irons, Ph.D.,

is senior economic research and policy analyst and staff economist at OMB Watch.

©2004 OMB Watch1742 Connecticut Avenue, N.W.Washington, DC 20009 [email protected]

E-Mail Deliverability inthe Age of SpamContinued from Page 39

As a financial consultant fornonprofit organizations, all too often,I run into situations in which theconcern for managing assets isovershadowed by efforts to procurefunding. Once funding has occurred,however, the next important step is to start looking to the future andformulating a plan, or investmentpolicy. The purpose of the investmentpolicy is to ensure that every penny of funding is responsibly allocatedaccording to plan and in a manner thatcommunicates the organization’sobjectives.

Although an investment policyshould clearly articulate anorganization’s expectations to afinancial consultant or manager, itshould remain flexible enough to allowfor change. This change can take theform of capitalizing on opportunitiesin the market, or responding tointernal factors such as an increase ordecrease in funding.

An investment policy should reflectthe character of the organization. Forexample, an organization devoted tofair labor practices may not wish toinvest in the securities of an industryimplicated in sweatshops. Similarly, anenvironmental nonprofit might notwish to see securities of knownpolluters in their portfolio.

Finally, any investment policy shouldprovide realistic risk parameters to guidemanagers toward reaching long-termreturn objectives. Once established, the

investment policy should set standardsfor evaluating investment performancethat include procedures for policy andperformance review.

The investment policy statementshould be adhered to and annuallyreviewed by an Investment Committeeto be appointed by the Board ofDirectors. This committee should alsoprovide oversight for budget, payouts,and yearly auditing activities.

Finding a Manager

With more than 20,000 investmentmanagement firms in the country, theprocess for finding a money managerwho is the best fit for the organizationcan be daunting. One option is for theDirector of Finance to choose toconduct a direct search for a manager

based on the predetermined criteria setforth in the investment policy. Withthe direct approach, the Director ofFinance retains the fiduciaryresponsibility of monitoring themanager’s investment discipline, andpersonnel and business practices.Another consideration to approachinga manager directly is that theorganization may encounter highminimum investment restrictions. Foran organization with limited funds,these prohibitive minimums can be animpediment to structuring the multi-manager approach necessary fordiversification.

If, on the other hand, anorganization decides to approach afinancial consultant, it is the

41

Investing Tips for Nonprofits: The Investment PolicyWalter J. Ammerman, Legg Mason

Target Asset Mix Table

Asset Class MinWt. Target Wt. Max Wt.

Large Capitalization Equities 00% 00% 00%

Mid Capitalization Equities 00% 00% 00%

Small Capitalization Equities 00% 00% 00%

International Equities 00% 00% 00%

Fixed Income 00% 00% 00%

Cash & Equivalents 00% 00% 00%


consultant who will conduct the searchfor an appropriate manager. Thissearch carefully takes into account theorganization’s investment policy, andshould attempt to look beyond simplenumerical returns to factor in the riskand consistency associated withachieving investment goals.

In this situation, it is theresponsibility of the financialconsultant to oversee the individualmanagers. As a result, the Director ofFinance has assistance with thefiduciary responsibility associated withmonitoring and reporting.

Furthermore, because the financialconsultant retains many organizationsas clients, managers will often reducetheir customary minimums in order toseek a greater volume of business. Thisallows the nonprofit more options inchoosing from potential managers, as

well as the ability to diversify morewith fewer funds.

The following outline is intended toprovide a list of considerations thatshould be relevant to most nonprofits.While not addressing specific concerns,it provides the framework that willfacilitate the due diligence for a Directorof Finance or Board of Directorsassigned with fiduciary oversight.

Sample Investment Policy

Objectives — It is always a goodidea to prioritize the objectives of thefund. For example, is safety of princi-pal or return on investment the firstconcern? Is there a need for the port-folio to generate income? Does theportfolio need to be liquid enough tomeet any anticipated distributionrequirements? Is return on investmenta priority, and, if so, what indicatorswill be used as a measure?

The objective of the organizationshould be pursued as a long-term goaldesigned to maximize return and

minimize risk. That being said, bytheir very nature, securities marketsfluctuate, and any mention ofmaximizing long-term appreciationshould stress the importance ofconsistent returns. Recognizing thatshorter-term market fluctuationscause variations in accountperformance, objectives over the 5- to10-year moving time period should beexpressed in terms of an expectedpercentage return after fees and/or acomparison to a universe (top 50thpercentile) of managers with similarinvestment objectives.

Asset Allocation — As previouslystated, the manager’s priority shouldbe long-term appreciation coupledwith consistency of returns. Any assetallocation considerations shouldtherefore be made in accordance withthis objective. The asset allocation is designed to achieve an optimalreturn within the nonprofit’s statedrisk tolerance.

Rebalancing Assets — Rebalancingshould be reviewed by an InvestmentCommittee whenever an asset doesexceed the maximum weight, and/orafter an annual review. The targetasset mix table lets the market dictatewhen the portfolio should be rebal-anced, and takes the emotion out ofinvesting.

Selecting a Manager — Selecting amanager can be involved, and theprocess by which a manager is chosenshould be addressed in the InvestmentPolicy.

The first step is the gathering ofinformation, which can include any orall of the following items:

42

Investing Tips for NonprofitsContinued from Page 41


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• A description of the investmentstyle of a manager

• A description of the investmentprocess to be followed by themanager

• The identity, experience, andqualifications of the professionalswho will be involved in handlingthe organizations

• Whether any litigation has beeninitiated against the manager

• The performance record of the manager

The second step in the process is toinsure that inquiries be made to theSecretary of the State of Incorporationsas well as the Securities and ExchangeCommission at to whether anyenforcement actions have been initiatedagainst the manager, and/or any relatedpersonnel who would have responsibilityfor the organization’s funds.

Terminating a Manager

If guidelines are to be set to chooseinvestment managers that areappropriate for the organization, thereshould also be a standard by which todetermine when to terminate a manager.

The following is a list of red flagsthat should signal InvestmentCommittee concerns:

1. Loss by the manager of any seniorinvestment personnel

2. Any change in basic investmentphilosophy and investmentprocess by a manager

3. Failure to observe security qualityrestrictions

4. Underperformance that results inthe failure to attain a (60 percent)vote of confidence by theInvestment Committee

Communication and Reporting

The investment committee willreceive quarterly reports outlining theperformance of the portfolio.Managers or the Investment Consultantwith the responsibility for manageroversight should make themselvesavailable to an Investment Committeeat regular intervals. In addition, theorganization may wish a manager orinvestment consultant to present to theBoard periodically for updates onperformance, market conditions, andthe outlook of future returns.

Additionally, any Investment Policyshould stipulate that it is the role of themanager to report — in writing — anypertinent changes or adverse regulatorydevelopments (SEC deficiency letters)regarding the manager’s firm orpersonnel to the InvestmentCommittee and the investmentconsultant. This would include thedisability, incapacity, departure, ordeath of any of the manager’s seniorinvestment personnel.

Monitoring Managers

Any process for monitoringmanagers should, at a minimum,include the following:

• A quarterly review of the portfolioto determine compliance withinvestment guidelines

• A quarterly assessment of the rateof return for each investment

44

Investing Tips for NonprofitsContinued from Page 42

How to save your organization from a 15% postal rate hike

in 2006! If you count on mail for your

donations, you need toTAKE ACTION NOW!

Read this postal reform update on current legislative action needed at

www.nonprofitfederation.org.

45

manager, both on an overall basisas well as by asset class

• A quarterly comparison ofmanager investment results withappropriate benchmarks

• An annual meeting to reviewperformance and any significantchanges (professional staff,investment style, corporatestructure) with the manager

In conclusion, establishing anInvestment Policy is not an end in itself,but should be considered the first stepin a process that must remain flexibleenough to accommodate unforeseencircumstances. These circumstances canbe specific to the organization — suchas a change of funding that would eitherincrease or decrease available investmentalternatives — or a change in theeconomic environment. Without anInvestment Policy, on the other hand,

any Director of Finance with theresponsibility for funds faces limitedalternatives. On the one hand, thatindividual can opt for the safety of CDswith the knowledge that both principaland interest are secure. The downsideto this approach is, of course, that CDreturns are in the low single digits. Thiscompares poorly with stock marketreturns (according to Bloomberg, theS&P 500 returned 11.05 percent withdividends reinvested in the 10 yearsbetween 12/31/93 and 12/31/03), evenfactoring in recent lackluster equitymarket returns.

Furthermore, it bears mentioningthat investing during periods of poorperformance can bring impressive long-term returns.

Of course, the other alternative is toignore the need for an Investment Policyin the process of choosing a manager.

Notwithstanding the assumption offiduciary responsibility on the part ofany individual with the responsibility offinancial oversight, this approach simplyamounts to investing without a plan andhoping for the best.

The good news for any 501(c)3 in the process of writing an investmentpolicy is that the process can besimplified. There are reputable financialorganizations with years of experience in handling the assets of associations, foundations,endowments, and Taft Hartley Plans.Most of these organizations will work closely with a nonprofit, writing an Investment Policy with no obligation.�

Walter Ammerman is a financial consultant in the Washington, DC office of Legg Mason.

DO YOU HAVE THE LATEST COPY OF THE DMA’S PRIVACY PROMISE?

The Privacy Promise requires that all DMA members:

• Notify donors, contributors, customers, and members of the right to choose NOT to have contact information rented, sold, or exchanged, and send follow-up notices at least annually.

• Honor all requests to opt out of rental, sale, or exchange of contact information.

• Suppress the contact information, on in-house lists, of anyone requesting no future contact.

• Use the DMA Mail or Telephone or e-mail Preference Services on all prospecting programs, to delete the names of those who have requested that they not be contacted.

• Comply with all relevant federal and state laws relating to privacy.

For more information about the DMA Privacy Promise visit www.the-dma.org/privacy/privacypromise.shtml or contact the Ethics and Consumer Affairs Department at 202.861.2445 or [email protected]

The DMA Ethical Guidelines mostrelevant to DMANF members are:

• Solicitations for contributions, andoffers of products and/or services,must state facts which are clear,honest, and verifiable.

• Essential points in solicitations andoffers must be accurate andconsistent, without contradictionby individual statements ordisclaimers.

• Representations must be clear andsimple to understand.

• Descriptions, promises, and claimsmust represent actual conditions,

situations, and circumstances existingat the time of the presentation.

• Photos and artwork mustaccurately portray the subjects theyrepresent.

Communications related to causerelated-marketing arrangementsbetween nonprofits and commercialorganizations must disclose the nameof sponsor(s), and must discussrelevant specifics of the arrangements(e.g. percentage or amount of salesprice that the nonprofit will receive.)

Solicitations and offers (not monthlygiving programs) must avoid any

confusion as to the author/sender, andnever imply that they are either invoices orsent by a government agency.

If postage, shipping, or handlingcharges are involved, the charges mustbear a reasonable relationship to the costsincurred.

For advance consent programs,contributions, subscriptions, ormemberships, the sponsoring organizationmust have verifiable advance consent, andoffer regular opportunity to cancel.

Solicitations and offers to children mustbe in appropriate taste, and give parentsthe opportunity to review and cancelfurther communications.

Price comparisons must be realisticand verifiable.

46

A Review of The DMA Ethical Guidelines:Those Most Relevant to DMANF Members

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• Guarantees and warrantees mustclearly state all terms andrestrictions.

• Survey data and testimonials mustbe valid, authorized, and verifiable.

Nonprofits and their suppliers mustadhere to all federal and state laws andregulations relating to the promotion ofsweepstakes.

Upon request, charities, fundraisers,and solicitors should provide relevantfinancial information related to use offunds.

While nonprofits are exempt fromsome state and federal laws regulatingDo-Not-Call lists, and the DMANFbelieves that nonprofits may notconstitutionally be prevented fromcontacting anyone, DMANF membersare cautioned to ensure that they andtheir vendors adhere to all laws andregulations not found to beunconstitutional.

Additional Ethics information andthe DMAíss Ethical Guidelines may befound at www.the-dma.org/guidelines

Complaints to the DMACommittee on Ethical BusinessPractice are handled confidentially. Ifpossible, complaints are resolved bymodifying the offending documents orprocedures, which the Committeereviews before closing the case. If aknown violation continues, theCommittee will publicize its findings,including the name of the violator andthe facts of the case. Where a law mayhave been violated, it forwards the caseto the appropriate law enforcementagency, and publicizes the referral. �

47

A Review of The Donor Bill of RightsThe Donor Bill of Rights was created by the American Associationof Fund Raising Counsel (AAFRC), Association for HealthcarePhilanthropy (AHP), the Association of Fundraising Professionals(AFP), and the Council for Advancement and Support of Education(CASE). It has been endorsed by numerous organizations.

The Donor Bill of Rights

• Philanthropy is based on voluntary action for the common good.It is a tradition of giving and sharing that is primary to the qualityof life. To ensure that philanthropy merits the respect and trust ofthe general public, and that donors and prospective donors canhave full confidence in the nonprofit organizations and causesthey are asked to support, we declare that all donors have theserights:

• To be informed of the organizationíss mission, of the way theorganization intends to use donated resources, and of its capaci-ty to use donations effectively for their intended purposes;

• To be informed of the identity of those serving on the organiza-tioníss governing board, and to expect the board to exercise pru-dent judgment in its stewardship responsibilities;

• To have access to the organizationíss most recent financial statements;

• To be assured their gifts will be used for the purposes for whichthey were given;

• To receive appropriate acknowledgement and recognition;

• To be assured that information about their donation is handledwith respect and with confidentiality to the extent provided by law;

• To expect that all relationships with individuals representingorganizations of interest to the donor will be professionalin nature;

• To be informed whether those seeking donations are volunteers,employees of the organization or hired solicitors;

• To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share, and;

• To feel free to ask questions when making a donation and toreceive prompt, truthful and forthright answers. �

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Journal of the DMANF | Volume 7, Number 4 | December 2004 · rates or errors during registration....

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