Paper Weights

Last week I received a letter from a relatively large, international NGO. The letter, which was quite hefty, contained a pamphlet describing the work that the NGO was currently doing, a letter from the organization, a monthly newsletter and finally a donation card with a self addressed envelope. The first question that went through my mind was “how much did all of this cost?”

When we first started Haiti Innovation, one of the items we debated was how much information we wanted to disseminate through the internet and how much we wanted to send out through direct mailings. We quickly made the decision to be a completely web-based organization, so the question became moot. However, after receiving this letter last week, I thought back to our initial discussions and thought is there a better way for this organization to get their message across and collect donations in the process.

First, before I go any farther, I want to define what I mean by “better way”. Obviously the letter (package) I received was a tremendous piece of public relations and fund raising material. However, the key question any NGO must ask is “what type of return can be expected from each letter?” This requires that the total cost of the mailing be compared to the total expected donations. For example, if each letter cost the NGO $0.87 to produce, then it must take in at least that amount from each recipient. Only if this is accomplished does the direct mailing make sense. Now, it could be argued that ALL donations and benefits (future donations, word of mouth, etc,) must be considered when determining the effectiveness of direct mailing campaigns. However, the question is rarely asked if this could be accomplished through other means.

We at Haiti Innovation decided to stick with the internet as a means to distribute all of our information and donor material. This decision was made because we felt that the amount that we could save through internet mailings (and pass along to our development partners) was more than we could earn through direct mailings. The most popular argument for direct mailings is that they reach a percentage of the donor population that is unwilling or unable to donate (learn about NGO’s) using the Web. While there has been a drastic change toward internet strategies for a number of NGO’s, direct mailings are still an integrated part of most of their strategies. Do not misinterpret this as a diatribe against direct mailings. They, at times, serve an important and vital part of distributing information about an NGO, as well as raise funds for its operations. The points that I am trying to make are 1) how cost effective are direct mailing campaigns? and 2) are there more cost effective means of accomplishing the same goal?

For the majority of NGO’s I believe that direct mailing campaigns do a poor job at covering their costs, most of which could be better accomplished through other means (if anyone has evidence refuting this, please send it along to us). The demographics of donors are constantly changing, and with it the means in which they identify NGOs to fund. The first step for any NGO considering a direct mailing campaign is to determine the total cost of production (this includes development costs, copies, etc) and compare that to the total amount of donations expected from the mailings. If the total cost of production exceeds the total amount received than the mailing does not make financial sense for the NGO. We strongly believe that all NGO’s should examine what they can do through the Web and compare the costs and benefits of a direct mail campaign, and are committed to working with any NGO that wants to consider this transition. What it comes down to is the belief that as much of every dollar raised for Haiti must go to Haiti. The means through which we accomplish this should maximize the amount that goes to the people of Haiti.