On Friday I was asked by a friend what I thought of direct mail letters from a nonprofit with a penny or two included. He explained that he recently received such a letter. I noted that I’d received such letters, and some have included a nickel, not just a penny or two.
There is evidence that including pennies and nickels will increase response rate, and thereby the number of gifts. My friend confirmed that he was not a particular supporter of the cause but had been thinking of donating to the group because of the two pennies sitting on his desk. The strategy plays to the dynamics being experienced by my fried. The appeal rests more upon appealing to the recipients’ sense of guilt more than a person’s commitment to the cause and a willingness to do something to support the cause. Many donors will give a small gift, just large enough to satisfy their sense of guilt. I noted that appealing to guilt is one of the reasons I’m not a fan of such letters for the organization for whom I work. My organization should appeal to the rightness of the cause, to the need to help people in need rather than play on a person’s sense guilt. It may be a technique that fits with some organizations and their ethos, but I think it is not appropriate for my organization which is faith based and should be above appealing to guilt in such a manner.
I noted to him that while the technique does bring in more new donors and gifts, there is a substantial increase in the number of small gifts in the $5 to $20 range. The costs of “servicing” these small donors (costs of thank you letters, data storage, sending subsequent letters, etc.) over the subsequent year will often consume much of the funds received from these small donors. Additionally, as they have given out of guilt more than support for the cause, a very high number of these donors will not give again without another appeal the includes a coin or some other appeal to their guilt, and rarely do they increase the level of the giving.
I’m not a fan of this type of technique as it can readily give the impression that the organization has money to waist. My organization is a poverty faith-based organization which prides itself with being efficient with its use of resources, and often speaks to cost efficiency in various newsletters and fundraising documents. It is my opinion that including a coin in a fundraising letter undermines that the organization is careful with how it spends funds. I noted to my friend that I would be unlikely to give to a cause that is not careful with its use of resources.
I hope that any direct mail vendor my organization utilizes understands about fiscal efficiency and organizational nature and thereby would not propose the use of such a strategy even if there is evidence that it works for some organizations.
Friday, when I got home, what did I have in the mail that day? A prospecting letter with a nickel enclosed. While noting not to give to the organization, and without a second thought or feeling of guilt, the nickel went into my pocket.