In a world where production costs are rising, nonprofits face a growing challenge: maintaining strong donor relationships while cutting back on the expense of paper and postage. As discussed in our previous blog here, minimizing the volume of mail without hurting net revenue is crucial for cost management and fundraising ratios.
But the question remains: Can you continue engaging donors without flooding their mailboxes?
Over the past few years, Masterworks has conducted numerous longitudinal studies to answer this question. Specifically, we’ve explored the effectiveness of reducing direct mail to online-acquired donors and the impact of various types of communications.
What we’ve learned could be game-changing for nonprofits looking to cut costs without losing donor engagement.
The First Two Phases: What We Learned
In the first two iterations of our studies, we focused on reducing direct mail to online-acquired donors who had never given via direct mail.
Here are the key takeaways from those initial studies:
- Online-Acquired Donors Don’t Require as Much Mail: Both iterations confirmed that online-acquired donors are significantly less reliant on direct mail than their direct mail-acquired counterparts.
- Content Type Didn’t Make a Big Difference: Whether the communication was an appeal or a newsletter didn’t have a significant impact on donor behavior. What mattered most was the nature of the message itself. Matching gifts, urgent offers, and high-value proposals mattered more.
These insights were crucial in helping us refine our strategies. However, they also raised more questions: What happens when donors transition from giving through direct mail to online exclusively? Do they follow the same pattern, or do they require different engagement tactics?
Phase Three: Examining Online-Transitioned Donors
In this study, we looked at a different subset of donors — those who had originally given through direct mail but had transitioned exclusively to online giving over the past two years. This group, which we’ll call online-transitioned donors, represents a unique hybrid of both direct mail and digital behaviors. We put these donors into the reduced mail cadence of the online donors (roughly 75% less mail than the traditional program).
For the clients that we ran this test on, the control (all the direct mail) won on net revenue - even though these donors were unlikely to give through the mail — their overall giving to the organization was reduced when mail was cut that dramatically.
Next Phases
Our recent findings have raised more intriguing questions, which we aim to address in the next phases of testing. Here’s a glimpse into what’s coming:
- No-Mail Test for New Online-Acquired Donors
One of the key questions these tests have surfaced is whether online-transitioned donors continue to engage with direct mail because they prefer it — or because we’ve trained them to expect it. To explore this, we are launching a no-mail test for new online-acquired donors who have never been part of the direct mail stream. This test will help us determine whether direct mail is a necessity for these donors or merely a learned behavior. Additionally, it will provide valuable insights into the future role that direct mail may play in donor cultivation, especially for donors who initially engage with your nonprofit online. - Fine-Tuning Mail for Online-Transitioned Donors
Another aspect we’re investigating is whether online-transitioned donors truly require more mail than online-acquired donors — but perhaps not as much as those still actively giving through direct mail. Was a 75% reduction too aggressive for this donor type? We will continue to adjust the balance of mail to digital communications to see what works best for these hybrid donors, helping us optimize future campaigns and train future models. - Exploring Cost-Effective Mail Solutions
While reducing the frequency of mail is one strategy, we’re also exploring less expensive mailing options. Our tests have shown that high-end mailings, such as prospectus-style packages, can perform well with certain donors, but we’re now experimenting with removing elements like the reply device and reply envelope to cut costs further. Additionally, we tried forcing credit card donors to use an online form to eliminate return postage and reduce the risk of mail fraud. However, this test led to an increase in donor complaints and a noticeable decline in giving.
These tests underscore the importance of balancing cost-saving measures with donor satisfaction.
Practical Implications for Nonprofits
What does this mean for your nonprofit’s direct mail strategy? Here are a few practical takeaways:
- Segment Your Donor Base and Reduce Mail Where It Makes Sense: Not all donors are the same, and your communications strategy shouldn’t be either. Segmenting online-acquired from direct mail-acquired donors allows you to tailor your mail program more effectively.
- Focus on Urgency in Your Messaging: As our studies have shown, urgency drives action. Whether in your direct mail or digital campaigns, make sure your messaging emphasizes the timeliness and importance of your cause.
- Invest in Digital: If these studies have shown anything, it’s that digital engagement is not only viable but often more efficient. Reducing your reliance on direct mail and increasing your focus on digital channels can help you reach donors more cost-efficiently.
The Future of Mail and Donor Engagement
As nonprofits continue to navigate rising production costs and shifting donor behaviors, it’s clear that reducing direct mail doesn’t have to mean sacrificing donor engagement. By leveraging the insights from our longitudinal studies, you can refine your mail strategy to fit the needs of today’s digital donors, focusing on urgency and personalization while cutting unnecessary costs.
The bottom line? You can mail less and impact more with the right data and strategy.
