Though they’ve used the Web to raise money for the victims of catastrophes like Hurricane Mitch, nonprofit charities see even more promise in it as a customer service vehicle.
Take the Arthritis Foundation, which has a growing membership and a strong retention rate.
Early next year the Atlanta-based organization will unveil a redesigned Web site that can both solicit funds and make it easier for users to find needed information, according to vice president of direct marketing Angie Moore.
As part of its effort to improve retention rates, earlier this year the foundation began testing postcard correspondence with major donors and others just to acknowledge contributions. The cards, which do not ask for money, are sent to donors in general, without any particular database segmentation. It’s too early to tell how they are working, Moore notes. The foundation wants to raise its retention rates (already consistent with normal nonprofit rates of 35% to 40% the first year and 50% to 65% in subsequent years) to the higher levels of, say, consumer magazines. The group, which has experienced double-digit growth every year for the past decade, sends out eight mailings annually for acquisition and renewal, a total of 26 million pieces.
“We’re doing a lot of customer retention, as we always have, but even more is needed as the program matures,” says Lindy Litrides, senior vice president of relationship marketing. Customers are defined not only as mail donors but as government agencies and corporations that work with the foundation on event marketing and other activities.
The foundation has had a Web site (www.arthritis.org) for several years, using it mostly as a vehicle to disseminate information. When the revamped site debuts, users will find it easier to locate the information they need, says Moore. Also, she notes, “the site is going to include bigger opportunities for giving.” To that end, there will be a mechanism for direct, secure credit card donations, something the site now lacks.
“Everybody is moving in this direction now,” Moore adds.
Similarly, the American Institute for Cancer Research has had a site (www.aicr.org) for about four years, using it primarily for information and customer service (for example, visitors can download articles about cancer). It also offers books and videos, but buyers must dial a toll-free number to order, says executive vice president Kelly Browning. Next month, the AICR will launch a reworked site featuring a greater number of downloadable articles on the four most common cancers: lung, breast, colon and prostate.
For the moment, the AICR is staying away from both active (e-mail) and passive (Web) fundraising; the institute’s average 66-year-old constituents still have problems with giving their credit card numbers over the phone, Browning explains.
Moreover, the AICR plans to refrain from active online fundraising until issues like privacy protection are resolved. It’s still not clear whether the group will expand traditional programs (like its 5-year-old 800-number service, where staffers answer questions about the disease).
How well can the AICR measure retention from these efforts? Not very well, Browning admits. Not that it has to worry – growth has been strong over the past few years, and the group has an active database of 2.2 million names.
Some groups, like the Save the Children Foundation (STC), are using the Web more for fundraising than for donor retention.
Last year, the Westport, CT group raised $40,000 via the Web to help victims of Hurricane Mitch in Central America and more recently for refugees in Kosovo, says Carolyn Miles, assistant vice president. Miles feels the Web will play a big role in its fundraising in the years to come. Next year, the charity may start using e-mail tocommunicate with sponsors (individuals who pay $24 per month to support a child in an impoverished foreign country).
Meanwhile, the group pursues retention mostly through traditional channels. It’s seeking to improve sponsor retention by 15%.
To do this, it has increased the number of mail packages it sends. The packages contain letter-writing tools for sponsors and those being sponsored, and videos demonstrating STC’s work in the many regions of the world where sponsors’ children are located.
Save the Children conducts most of its direct response fundraising through DR cable television efforts on family oriented networks like the Family Channel and Animal Planet, and on more general channels like CNN. The charity gets 60% of its $130 million annual revenue from the U.S. government and 40% from private sources. Its donor base numbers less than 1 million.
The e-mail issue remains controversial. The Nature Conservancy, which already does Web-based fundraising, shies away from e-mail. “We’ve been reluctant to send [them] out,” says Kevin Moran, associate membership marketing director at the Arlington, VA group. “That’s exactly what our members don’t want. The best way to lose a member is to send an e-mail.”
The conservancy, which has about a million 12-month donors, is in the second phase of a Web development project started in 1997. It hopes to get people to donate online, and to integrate the Web into its fundraising and membership communications. The group receives 80% of revenue from individuals via mail and telemarketing and has annual income of more than $565 million. Moran wants to raise online donations from their current percentage of less than 1% to maybe 10%. Many of the group’s most dedicated contributors donate through the site (www.tnc.org). But “it’s going to be more difficult to convince the public that the Web is the safest way to donate,” he adds.
Nick Allen, a consultant at Mal Warwick & Associates, Berkeley, CA, warns that large-scale e-mail for nonprofits may not be here just yet. “There probably aren’t many good donor names on the customer list from a big computer cataloger,” he says. “But I think e-mail will happen.”
Just recently a number of nonprofits have hooked up with a new style of Web site that gives customers of its commercial affiliates the chance to donate to charities by splitting affiliation fees with the merchants it carries.
Seattle-based GreaterGood.com, which was launched earlier this year, hosts online merchants like Amazon.com and OfficeMax. It’s been able to help fund about 16 member charities, both large and small, at no cost or risk to the charities, says executive sales and marketing vice president Katherine James Schuitemaker.
Working Assets Long Distance, the San Francisco-based phone company, has also started a Web site (www.shopforchange.com). The firm, which has been raising money for progressive causes since 1985, put up the site in June after noting results of a customer survey in which 50% of respondents said they shopped on the Web, says chief financial officer Larry Litvak.
Working Assets expects to attract $5 million in donations this year through the site. In its first week shopforchange.com drew about 5,000 visitors, with 400,000 anticipated by the end of 1999.
One of Working Assets’ staple customer contact strategies has consisted of promoting and funding a “cause of the month” through bills and other correspondence. It will publicize shopforchange.com the same way, and through e-mails to customers, says marketing vice president Robin Greiner. Following the same model as GreaterGood.com, the site is carrying online merchants like Amazon.com, CDNow and J. Crew and splitting affiliation fees with them.
Will charities be able to move away from their tried and true (and often very costly) direct mail communications to both new and existing donors? Not anytime soon, conventional wisdom says.
“Nonprofits have been doing good customer service at least since the mid-1980s,” says Larry May, president of list company May Development Co. in Greenwich, CT.
“They always spend a lot of time answering their mail.”
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