The Future of Direct Marketing, Part 3
Posted on Mon, Aug 15, 2011
By Jim Hussey, Chairman
Chapman Cubine Adams & Hussey
What lies in the future for direct marketing and nonprofit fundraising? In Part 1 of this series, I addressed the growing importance of multi-channel marketing. In Part 2, I explored the rumor that direct mail is dead.
In today’s final post, I will be discussing the greatest challenge we face now and in the future as marketers and fundraisers: the growing skepticism of donors.
Our Greatest Challenge
If you ask someone in the fundraising business what they believe will be our biggest challenges in the coming years, you will usually receive an answer about rising costs or the instability of the postal system, the diminishing number of hard phone lines in homes and the proliferation of spam. These are major challenges, but I believe the biggest challenge that we face today and increasingly in the future is the cynicism of potential donors.
When I started my career back in the 1980’s, potential donors would generally accept an organization and its message at face value. For example, if someone received a fundraising mail piece from an organization which fed hungry children, they generally accepted that this must be a legitimate group doing important work. And if the recipient was passionate about children’s issues, there was good chance they would respond.
Sadly, much has changed since those days. Today, the public is far more cynical.
Much of this cynicism is general in nature—there is greater skepticism about government, about corporations, about the stock market, about the media, and so much more. And unfortunately a cynicism towards nonprofit organizations has also developed over the years due to various scandals and controversies that have happened with a few “brand name” organizations. Toss in a few fraudulent telemarketing scams under the guise of charitable solicitations, fundraising emails from an “African Prince” raising investments for his small country and yes, donor skepticism is at an all-time high.
Several years ago scandals concerning the misuse of funds at the United Way, ethical lapses and controversy at other charities gained major attention. In the aftermath of 9/11, there were several well-publicized scandals concerning the use of funds raised to aid the victims of the terrorist attacks. Four years later, the possible misuse of funds raised after Hurricane Katrina were also leveled against several nonprofit organizations. And more recently, there has been a great deal of scrutiny about the funds raised to aid the victims of the earthquake in Haiti.
As a result, potential donors are far more cynical about nonprofit organizations today than at any time in the past. And this skepticism affects the industry as a whole, not just those few organizations involved in the scandals. We also must assume this cynicism will grow in the future as new scandals, scams and controversies are uncovered people try to make a quick buck. The American public has a long memory, and scandals remain on the nation’s collective memory for decades.
The growth of skepticism has dramatically affected response rates over the past few decades. Even though the traditional base of nonprofit supporters—older Americans who are 60 years or older—has grown with the aging of the Baby Boomers, response rates have dropped. Nothing else explains this except cynicism.
The nonprofit organizations that have survived and flourished during this period— and those that will continue onward—are those groups which have effectively demonstrated to donors their legitimacy and efficiency.
Years ago, success for a campaign required a powerful, personal story. In the case of my fictional children’s charity, such a message may address the hunger of a particular child in a third world nation. Today, while there is still a place for such personal messages, you are more likely to see one of the following in a successful package: a large chart outlining the efficiency of the organization, a third party endorsement, such as a favorable quote from a well-known publication or a respected authority figure or celebrity, positive ratings from Charity Navigator or other watchdog groups, and photographs illustrating the actual work financed by donors. Each of these tactics helps overcome the cynicism of a potential donor
Looking forward, what can we do to combat such skepticism?
Hopefully there will be fewer nonprofit scandals. Organizations must be much more careful about what they promise and how they spend their funds—especially those raised during crisis. And as marketers we must assure donors about the efficiency and effectiveness of the nonprofit organizations we serve.
Through these efforts, we can hopefully overcome the skepticism we face.
If you missed Jim’s first two blogs about the future of direct marketing, be sure to read them here:
Part 1: Multi-channel Marketing
Part 2: Is Direct Mail Dead?
