New sources of direct mail donors

Every healthcare organization needs a constant flow of new donors, even if it’s just to make up for the 25% – 35% attrition in long-standing donors each year. New donors can come from in-house sources like event attendees and former patients, and from external sources like response lists, online sources and increasingly from enhanced cooperative databases.

Enhanced cooperative databases, or “coops,” have several advantages over single-sourced response lists.

A coop is the result of dozens or even hundreds of mailers pooling donor data into a single database. Some coop databases contain input only from other nonprofits; others contain customer data from mail-order firms, subscribers to magazines, etc. Most are also enhanced with demographic data such as credit, age and income.

The result: high-value lists of households in the U.S. who are distributing their discretionary income in a variety of ways. These households are available to you to use for highly targeted new donor acquisition.

Your fundraising agency (hopefully Amergent) can help you:

  • Compare your donors to the names in a coop and then rent from the coop names with similar characteristics to your donors.
  • Achieve a high average gift amount from coop names, using their model for high value.
  • Achieve a high response, using their model for response.
  • Overlap their models to achieve the best results, but to a more limited universe.

With each model, the names are ranked according to how well they match your best donors. Generally, names are grouped in five tiers: Tier I will contain the 20% of the database that matches most closely (and therefore should perform the best); Tier II will contain the next 20% of coop names that matched the next most closely. We generally recommend testing from within Tiers I and II to start.

Another advantage, according to Amergent Senior Vice President Mary Bogucki, is that “the models get around the imposed gift limit of donor organizations (most only give out their <$50 donors). They find the higher-value philanthropic donors that are not included on donor rental/exchange lists.”

In the four examples below, the new donors from coops had average gift amounts similar to those from response lists, but the percentage of new donors with gifts of over $100 is greater – up to 23% greater – than the response lists in the same mailing.

Coop_100plus_chart

With all of their advantages, you might expect these coop prospect names to cost more than response lists. In reality, they usually cost less. Most coop database managers will run the comparison against your donor file without charge if you agree to rent some Tier I or II names for acquisition. Not only is the actual cost per 1,000 names lower than it is for response lists, some coops will even supply names on a “net” basis after the merge-purge. The result, according to Amergent Account Manager Deb Cedrone, “across the board, the cost per net name is almost 50% lower for coop names compared to the overall campaign average.” See her numbers below, for a medium-sized food bank:

Coop_cpd_chart

One more advantage: when you rent response lists, some donors will appear on 2, 3 or more lists, and you have to pay for them each time. If you can replace your least-effective five or 10 response lists with coop names, you’re only getting those names once.

There are other uses for coop names, in screening new donors to see who’s worth more effort, and reactivating lapsed donors. We’ll explore those another day.

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