THE NON-PROFIT SECTOR TODAY
According to a June, 2006 report by the non-profit resource group Independent Sector, there arecurrently over 1.9 million non-profit organizations in the United States. In an Association of Fundraising Professionals study, the main challenge named by charities was increased competition from too many nonprofit groups.

The great majority of non-profits use direct mail as a main fundraising strategy. As the amount of revenues raised lessens, you will find more charities initiating direct mail, while larger, well-funded charities further increase their existing campaigns. The result: more mailings – and more competition – directed to a diminishing group of givers.

In this environment, new approaches are necessary to reach those willing to give. One such approach is telemarketing.

TELEMARKETING VS. DIRECT MAIL
There is a commonly held belief that telemarketing is more expensive than direct mail. This is not always the case. Depending on your mission, lead database and goals, the phone call can be more cost-effective than the letter. The most relevant statistic is the “Net Return” – the income you receive after you pay all the costs associated with your marketing program. When the net results of phone and mail-based solicitations are compared, the true value of each can be assessed.

WHY USE TELEMARKETING
There are four primary reasons why you should use telemarketing:

1. The results are outstanding. Typical response rates with the telephone are 3-7 percent, while direct mail response is customarily .5-1.5 percent. Obviously this will differbased upon the lists used and the affinity of the potential respondent.
2. It is very efficient and productive. One person on one telephone in one hour canproduce as many as 6-12 completed calls and thus achieve a result of some sort.
3. It is an extremely personal medium. Telemarketing is interactive two-way communication that generates new income and fosters the organization/donor relationship.
4. It maintains the donor base. Telephone programs are excellent for renewing the support of donors who have stopped responding to traditional fundraising appeals. Instead of losing 20 percent or more of the donor base each year, a telephone program should renew approximately one-third of these donors and keep them active.

TYPES OF TELEMARKETING
There are three basic types of telemarketing:

Prospecting – Using the telephone to generate contributions from donors who have never contributed before. This is the most difficult and most expensive, because the individual solicited may not recognize the organization and its programs, and therefore may hesitate to contribute.

Lapsed Donor Renewals – Can be very successful. Utilized successfully by many organizations with a lapsed donors list.

Upgrading Active Donors – An excellent program that can be implemented to generate a second and higher contribution each year from active donors.

These can be implemented with a variety of marketing activities, such as membership drives, capital campaigns, endowment programs, special events, emergency appeals, annual funds and installment programs.

ADVANTAGES OF TELEMARKETING
The phone is a highly adaptable instrument. An often-overlooked benefit is that phone-based solicitation is an effective public relations and donor cultivation vehicle. Well-trained phone representatives field complaints, address donor concerns and overcome objections to supporting your cause and institution.

The reward comes in the form of developing donor loyalty, increasing average gift amounts, decreasing attrition and reactivating lapsed donors. Of equally great importance is that you will learn more about your constituents, thus helping define future marketing efforts and building relationships. In effect, besides raising money, you’re conducting a mini-survey, allowing you to tailor your appeal to your donors’ desires.

USING DIRECT MAIL AND TELEMARKETING SYNERGISTICALLY
Many non-profits find that 40-50 percent of current donors who put aside a direct mail appeal will change their mind and give something when contacted via telephone. It is not unusual that some 20 percent of those called overall make a pledge – and quite often the phone pledge and the average gift is higher than contributions generated from direct mail respondents.

The very best results occur when a mail piece precedes the phone call. In this case, the letter should not tell the entire story – it is important to pique the interest of the prospect. There has to be a sense of mystery and excitement for the prospect to take the telephone representative’s call. It is best to follow up a direct mail piece telephonically within 7-10 days of its receipt.

If you use direct mail only for new donor acquisition your response rate is probably between .5 and 1.5 percent. If you mail and then call your prospect your response rate should rise to 3-7 percent, depending upon the appeal, the list and the timing.

SUMMARY
Based upon the current economy and as things are shaping up, the ability to be agile and more creative is essential for the continued good health of your non-profit.

First and foremost, make sure that you are prospecting the “old gold”, namely your lapsed donors. It is far easier and far less costly to re-activate a former donor than it is to find a new one in this vast and increasingly competitive world of non-profit fundraising.

If you use direct mail, then continue using it and try to increase with even more. But this may well be the time to consider the synergy of direct mail and telemarketing. As time moves on, the fittest and the strongest will survive – while the weak will have to reduce their services as they face budgetary shortfalls.