As the economy prepares to swing into full gear, nonprofitsare anxious to make the most of their fundraising campaigns.Many tightened their belts during the recession and are nowslow to implement full-scale fundraising efforts. To make themost of their budgets, these fundraisers have dabbled in thearea of direct marketing integration. Direct mail has beencombined with e-mail broadcasts. Telemarketing has beencoupled with annual appeals. Yet with all of their thinking andplanning, few nonprofits have successfully managed to conductlarge-scale integration of their fundraising efforts. Much can bedone on the part of nonprofits to improve their success in thearea of integration. But it won’t be without some work.

There is no silver bullet in integration. Instead, there are anumber of items nonprofits will need to address simultaneouslyin order to reap the rewards of this tool. There is both goodnews and bad news with implementing this fundraisingapproach. The good news is the success can be huge.Nonprofits will be able to foster stronger relationships withconstituents and increase response rates and average gifts. Thebad news is that due to the complexity of this process, they maystruggle at first. Integration is a “big picture” process that willrequire a unified effort from several departments that may nothave continuously coordinated their efforts in the past.

Four Areas to Address

As nonprofits identify themes and activities around whichthey should integrate their efforts, there will be four major areasto address:

1. Using consistent branding

2. Coordinating the timing of marketing efforts

3. Pooling databases

4. Tracking results

Using Consistent Branding

When nonprofits place advertisements, conduct direct mailappeals, broadcast e-mails, and issue press releases, it is veryimportant that they use consistent branding. The name of theorganization and its logo need to be identical in every medium.The message about the specific fundraising event also needs tobe conveyed in each mechanism in a consistent manner.

ALSO IN THIS ISSUE

Letter from the Chair . . . . . . . . . . . . . . . . . . . 2

Beyond the Single Message:Running Effective E-Mail Campaigns. . . . . . . . 8

Book Review/Suggested Reading List . . . . . . . 10

Charity Begins at Home…Planning for the Future . . . . . . . . . . . . . . . . . 12

From Entitlement to Gratitude: Philanthropy at a Crossroads . . . . . . . . . . . . . 13

Five Tips for Raising Charitable Children . . . 15

Member Spotlight. . . . . . . . . . . . . . . . . . . 16-17

Public Policy Scorecard . . . . . . . . . . . . . . . . . 18

Building RelationshipsThrough the Mail . . . . . . . . . . . . . . . . . . . . . 19

Volume 7, Number 3 September 2004

JOURNALJOURNALO F T H E D M A N O N P R O F I T F E D E R A T I O N

Continued on Page 4

How Nonprofits Can Better ImplementIntegration of Their Fundraising ProgramsMichael Robinson, Director of IT and Special Projects, Creative Direct Response

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ChairPegg NadlerPegg Nadler Consulting

Vice ChairJack DoyleAmergent

MembersKelly BrowningAmerican Institute forCancer Research

Tim BurgessDomain Group

Phil ClaiborneElks Magazine

Christopher CleghornEaster Seals

Bobby DeanCal Farley’s Boys Ranchand Affiliates

Craig FloydNational LawEnforcement OfficersMemorial Fund

Lindy LitridesLitrides & Associates

Susan LothDisabled AmericanVeterans

Larry MayMay DevelopmentServices

Dennis MeyerMeyer Partners

Sherry MintonAmerican HeartAssociation

Angie MooreAmerican Cancer Society

Jo SullivanASPCA

Sue SwordChristian AppalachianProject, Inc.

Nick StavarzSynergy Direct MarketingSolutions

Joan WheatleySpecial OlympicsNorth America

Kevin WhortonCatholic Relief Services

StaffSenny Boone, Esq.Executive Director

Helen LeeOperations Manager

Jill MurphyMember ServicesManager

Dear DMANF Members:

What just happened in California over these past few weeksis a frightening example of how the legislative process can runamuck. California has a well-deserved reputation for producingthe most amazing — even stupefying — pieces of legislation inthe country.

It is a perfect example of what happens if we do not monitor,educate, and inform the public and elected officials of theramifications of their proposed regulations on the nonprofitcommunity.

It is not uncommon for legislators to issue proposed billswithout a full understanding of the impact their legislation willwreak. Fortunately, there is usually some time to present themwith your views before the legislative process begins to snowballout of control.

I am happy to report that we have just dodged a majorsnowball this year unveiled by California’s State Senator Sher, atthe behest of the CA Attorney General Bill Lockyer: theNonprofit Integrity Act of 2004. SB 1262 is intended to preventabuses in the wake of charity scandals — a noteworthy goal.

But the bill as originally introduced would have createdregulatory hurdles for nonprofits and their professionalfundraisers in new and inventive ways, such as requiring localsheriffs to keep records on nonprofits. It would have stoppedthe use of unrestricted funds by requiring charities to acceptonly those contributions for a charitable purpose that areexpressed in the solicitation for contributions. It would haverequired the retention of records for 10 years! The bill haddozens of provisions that would lead to greater costs for thelegitimate nonprofits that operate in California. At the sametime, it would do little to eradicate the handful of scofflawswhose behaviors had prompted the introduction of thislegislative overkill.

The Nonprofit Federation has said this many times: morelegislation and additional regulation only create new andexpensive burdens for those nonprofits already in compliance.This distracts charities from their core mission; it diverts needed

Letter from the ChairPegg Nadler, President, Pegg Nadler Consultingpegg@peggnadler.com

The 2004 – 2005 LeadershipFollowing are the members of the The DMA

Nonprofit Federation’s Advisory Council with leadership responsibilities:

resources, volunteers, andadministrations from meetingcompliance goals. It results in hard-earned dollars going to managingregulatory processes rather thanproviding needed programs to theunderserved. As more burdens areplaced upon legitimate nonprofits,they only serve to fill more file cabinetswith unread forms and documentation.Unfortunately, scofflaws will continueto operate and flourish while regulatorsspend time on compliance issues ratherthan on enforcement.

Thankfully, instead of receiving theusual legislative brush-off, the DMANonprofit Federation and others(including ADRFCO and theCalifornia Association of Nonprofits

that rallied in opposition to SB 1262)received a fair hearing from AttorneyGeneral Lockyer. Although there aresome lingering issues that should beresolved by the time you read thisletter, the California Attorney Generalchanged his bill to encompass most ofthe concerns we raised, and removedthe provisions most harmful tononprofit organizations.

This would not have been possiblewithout the ongoing involvement ofDMANF members. We were able toresolve these issues through thestrength of our representation of you.There were numerous nonprofitorganizations that testified at thehearings and worked behind the scenesto fix the bill. These groups include

Freedom from Hunger, the BradyCampaign, Easter Seals, Mal Warwick& Associates, and Disabled AmericanVeterans.

We all owe them a debt of gratitude,since this success would not have beenpossible without their work. Rarelydoes legislation reach this level ofconcern, but, we know that when itdoes, we can count on you to protectthe nonprofit community. Byremaining involved with the DMANF— especially in legislative matters —we have made a difference. We havelearned that legislators and regulatorsdo understand that legitimatenonprofits need to have input; we onlyhope that they reach out to us beforethey launch another snowball. ■

3

MARK YOUR CALENDAR!

Stay tuned for our Nonprofit Seminar SeriesCOMING NEXT SPRING!

WashingtonNonprofitConferenceFebruary 3-4, 2005Capital HiltonWashington, DC

Nonprofit RegionalConferenceMay/June 2005Denver, Colorado

New York NonprofitConferenceAugust 17-18, 2005Waldorf=AstoriaNew York, NY

Donors, volunteers, sponsors, andactivists will need to make theconnection between a fundraising event and the nonprofit. From theoutside, people should view thenonprofit’s fundraising efforts as a single entity with a common point ofcontact for additional information about their involvement.

A national nonprofit recently aired atelevision commercial promoting itsability to accept used cars as donations.While the nonprofit was consistent insome areas, the process fell apart inothers. The name of the nonprofit wasidentical in its direct mail package, on itsWWeb site, and in the commercial. Thelogo, however, was different in all threemediums. The colors were similar, butthe logos were not the same. Thisconveyed the potential of representingthree different organizations. Themessage was also inconsistent. Thenonprofit hyped its ability to accept usedcars as donations in two of the threemediums. The Web site had no referenceon its home page about this program. Iwonder how confused potential donorsmust have been when they went to theWeb site to find additional information,only to find a different logo and nothingabout the donation program? Consistentbranding of the nonprofit’s identity andits message needs to be improved.

Coordinating the Timing ofMarketing Efforts

Timing is everything. A well-executedfundraising event may fall flat if thetiming of various communications is not

coordinated. Fundraising events andactivities usually take a substantialamount of preparation. During theirdevelopment, plans should be made tocoordinate the execution of direct mailappeals, e-mail broadcasts, telemarketing(inbound and outbound), Web sitepromotions, and press releases aroundthe event. The timing of such activitieswill be critical. The different vehicles forcommunicating to the public shouldcrescendo just prior to the event andfoster a sense of enthusiasm or need thatcompels the donors to act. In otherwords, the prospective participants/donors should feel a growing sense of the importance of the nonprofit andits mission.

This task is not easy to implement.Direct mail packages will require asignificant amount of time to prepare —everything from reserving lists toapproving artwork. E-mail and Internetactivities may be handled by differentdepartments, which will require additionalcoordination. In order to addressintegration on a large-scale, it will benecessary to coordinate both thecommunication between the departments,and the materials sent to the public.

A sample approach would be todevelop the content on the Web site and broadcast e-mails, which then inturn could be followed up with directmail and then telemarketing. Adequatespacing between the execution of thedifferent mediums will drive the message(and theme) of the event into the minds and hearts of the donors withoutbeing overbearing.

A recent walk-a-thon by a largenonprofit executed this approach verywell. As participants received

information about the event, a buzz wascreated in the public, and as a result,groups of volunteers and donorsparticipated in the event. A form ofsocial fundraising of which people wereproud to be a part ensued.

Pooling Databases

Most direct mail databases were nevercreated to handle the type of informationthat is generated by volunteer activitiesand Internet fundraising. Databases thatfunction on the back end of a Web siteare very hard to de-dupe against housefiles. Direct mail databases and e-maildatabases will need to be integrated inorder for the nonprofit to time thedelivery of information to donors. Whileit may not be possible for one vendor tohouse the entire database, it is possible todesign the individual databases to operateas relational entities. Information uniqueto the sources can then be tied togetherby a common data element.

In order to pool the various lists ofdonors, many charities will need to gettheir data processing firms and Web hostproviders communicating with each other.Clear goals will need to be establishedaround who controls what pieces ofinformation and how new data will beshared between the various files. Databaseswill need to be modified to carry new dataelements, and global identifiers will needto be assigned to track individuals acrossthe various systems. Once a unifieddatabase system has been established, it isthen possible to identify the true history ofa donor’s habits.

Tracking Results

Individuals who donate to thenonprofit, participate in fundraising

4

How Nonprofits CanBetter Implement…Continued from Page 1

Continued on Page 6

6

events, and frequent the nonprofit’sWeb site are invaluable. They share themission and drive of the nonprofit.Unfortunately, it is difficult to identifythese types of people. In order toidentify the habits of donors, it will benecessary to track the results of yourintegrated marketing.

The universal database system makesit possible to identify which donorsrespond to which source — i.e., directmail piece, e-mail, telemarketing, etc.— and in what type of activities theybecome involved. It is hard to foster astrong relationship if the nonprofit doesnot understand the donor’s history andhabits of participation.

Reaping Rewards

Integrated marketing is by no meansan easy task. It requires not only rawmaterials for incorporation intocommunication vehicles, but alsotalented professionals to organize theprocess. The activities of a number ofpeople will need to be synchronized sothe distribution of fundraising materialsappears to the public as a coherenteffort. The end result will be the rewardsthat all nonprofits seek — regardless ofthe state of the economy. ■

Michael Robinson is the Director of ITand Special Projects for Creative DirectResponse (CDR) based in Crofton, MD.CDR is a direct marketing fundraiserthat works exclusively with nonprofitsusing a variety of media. He can be con-tacted at mrobinson@cdr-nfl.com.

How Nonprofits CanBetter Implement…Continued from Page 4

Please help us keepour records up-to-date!

Name ________________________________________________

Organization __________________________________________

Title __________________________________________________

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Please fax back to 202.628.4383or mail to us at: DMA Nonprofit Federation

1111 19th St., NW, Suite 1180 • Washington, DC 20036

uncommonly

www.newportcreative.com

Today's fundraising climate requires a creative approach—not just in themessaging of your program—but in the way you build lasting relationshipswith your donors. Above all, you need to overcome obstacles to create ahealthy return on your investment.

Newport Creative has been producing high-performance direct responsefundraising programs since 1985. Innovative strategy. Award-winning creative. Insightful reporting and analysis. Cost-effective production. Weinvite you to check out our uncommon approach to unusually good results.

Contact Mike Walsh at 781.934.1415 or mikew@newportcreative.com

creative

With 71 percent of people in the United States using the Internet, more organizations aremoving communications with theirconstituents online for a variety ofpurposes: regularly schedulednewsletters, ad hoc or time-sensitiveupdates, and campaigns to drivefundraising, membership, or advocacy.But today’s Internet environment is notthe same as it was a year, or even sixmonths, ago.

As constituents become overloadedwith e-mail messages, organizationsmust plan and execute e-mailcampaigns with new approaches thataddress the challenges of today’s wiredworld to inspire the greatest responserates. From deciding how many e-mailsto send to whom, to determiningwhich messages will get the bestresponse, strategic e-mail campaignplanning and execution are key.

Here are a few techniques forensuring a more effective e-mailcampaign:

1. Design an Effective Campaign

An e-mail campaign is a unifiedseries of messages targeting a specificaudience to support a specific goal,such as:

• Recruiting new donors from apool of e-mail subscribers oractivists

• Renewing or upgrading currentmembers or donors

• Motivating advocates or e-mailsubscribers to respond to anadvocacy alert

• Encouraging donors to sign up asvolunteer fundraisers

As with direct mail, organizationstypically need to send more than onemessage to drive a response. After aninitial e-mail communication, however,it is important to suppress people fromthe mailing list who have alreadyresponded before sending follow-up e-mail messages.

For example, if an organization’s first e-mail targets 1,000 people andgenerates 50 responses (i.e., a five-percent response rate), then the next e-mail should be sent to the 950 people who did not respond.Continuing to ask the 50 respondentsto take action when they’ve alreadydone so runs the risk of annoying and alienating people who have already provided support. The best e-mail marketing software todayallows an organization to configure e-mail campaigns (versus individual e-mails) that automatically cullrespondents from the list so they do not receive additional e-mailappeals or calls-to-action for the same campaign.

2. Test the Message for Greater Response

Just as with postal mail, themessaging and presentation of e-mailscan affect response rates. Despiteemerging best practices in crafting e-mail campaign messages (e.g.,making a single ask in each e-mail),every organization still needs to test the effectiveness of its messaging, useof images, and subject line copy tooptimize response rates. One strategyto optimize response rates is to conductan A/B test.

A common (but sometimes cost-and time-prohibitive) practice in direct mail, A/B testing is thetechnique of creating two test e-mailswith a different single element — such as the message or subject line —in each one. Each message is sent todifferent “test cells,” or groups ofconstituents, made up of a randomsample from an organization’s targetlist. The message that gets the bestresponse is the one that should be used for distribution to a wideraudience. The latest e-mail marketingtools make it easy to run online A/Btests to enhance the performance of anonprofit’s e-mail campaigns.

3. Measure Results

Measuring campaign results iscritical to determining campaign

8

Beyond the Single Message: Running Effective E-Mail CampaignsVinay Bhagat, Founder and Chief Strategy Officer, Convio

effectiveness. An organization shouldlook not only at the response rate andother key metrics (e.g., e-mail openrates, click-through rates) for each e-mail in the campaign series, but alsoat the cumulative performance of thecampaign while it is underway and atits conclusion.

Continuing the example above, ifthe second e-mail sent to the revisedtarget list of 950 generates 30 responses(a 3.2 percent response rate), thecumulative response rate from thecampaign would be 80/1000 or eightpercent. Rather than averaging theresponse rates on each individual e-mail (showing a 4.1 percent responserate), the organization realizes that the

campaign has drawn eight percentresponse from the campaign after justtwo related e-mails.

Measuring results on the campaignas a unified series of communications,in addition to viewing each e-mailseparately, gives the organization amuch more accurate assessment of howthe campaign is working, and whatresults it can expect on futurecampaigns. Be sure to use e-mailmarketing software that automaticallytracks responses at a campaign level,making this type of analysis simpler.

With people and communicationsmoving online, e-mail campaigns todayrequire new approaches supported byadvanced e-mail marketing software.

As nonprofits grow their e-mail filesand continue to step up their use of e-mail marketing, expect to see morebest practices and analysis techniquesfrom the world of direct mail appliedto online direct response marketing. ■

Vinay Bhagat is founder, chairman,and chief strategy officer of Convio, Inc.,the leading provider of software and services to help nonprofit and individual-supported organizations use the Internet to become more effective at fundraising,mobilizing support, and managing constituent relationships. Before foundingConvio, Vinay was director of e-commerceat Trilogy Software. For more informa-tion, visit www.convio.com.

9

Stephen Hitchcock has written a bookthat deserves your attention as a directresponse fundraiser. It is a quick read,written in simple, crystallized offerings of

advice gleaned from years of experience.For those of you feeling impatient andundervalued, it will provide you with thesatisfaction of knowing that you are on

the right course, despite the length oftime it takes to build a strong donor base,or other frustrations you may be facing.

Hitchcock is president of MalWarwick and Associates, Inc., where hehas worked since 1986, providingconsulting services to regional andnational nonprofit organizations. Asmore attention is given to newerstrategies such as online fundraising,good old-fashioned snail mail hasreceived little recent review. This book,however, promises to give you a quick,yet thorough review of the basic elementsof effective direct mail fundraising lacedwith common-sense approaches tofundraising. As he writes in the sectionon the essentials of direct mailfundraising, “...I hope you won’t belooking for any hard-and-fast rules oreternal truths. They don’t exist. In fact,one of our guiding principles is that whatworks for one organization may notwork for another. That’s why we test andthen pay attention to actual results —not just to our intuitions or impressions.And why we experiment with newcontent and new formats — careful,calculated experiments, not foolishwholesale change.”

Hitchcock points out the mantra thatthe key ingredients in successfulfundraising are patience and persistence.

Book Review

OPEN Immediately, Straight Talk on Direct Mail Fundraising:

What Works, What Doesn’t and WhyStephen Hitchcock, Emerson & Church, Publishers($24.95. To order, call 508.359.0019, or visit www.contributionsmagazine.com)

Senny Boone, Executive Director, DMANF

DMANF Suggested Reading List

CPR for Nonprofits: Creative Strategies for Successful Fundraising, Marketing, Communications and Managementby Alvin H. Reiss; Paperback: 240 pagesPublisher: Jossey-Bass; (October 2000)ISBN: 0787952419

Disaster Recovery Planning for Nonprofitsby Michael K. Robinson; Paperback: 112 pages Publisher: Rowman & Littlefield; (November 1, 2003) ISBN: 0761826602

OPEN Immediately, Straight Talk on Direct Mail FundraisingWhat Works, What Doesn’t, and Whyby Stephen Hitchcock; Paperback: 259 pagesPublisher: Emerson & Church; (2004)ISBN: 1889102121

Revolution in the Mailbox : Your Guide to Successful Direct Mail Fundraisingby Mal Warwick; Hardcover: 352 pages Publisher: Jossey-Bass; 1st edition (January 23, 2004) ISBN: 0787964298

Testing, Testing 1, 2, 3: Raise More Money withDirect Mail Testsby Mal Warwick; Paperback: 272 pagesPublisher: Jossey-Bass; (March 7, 2003) ISBN: 0787967122

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“Direct mail works because it is anactivity that is repeated again and againover long periods of time. It is a presentinvestment that pays dividends in thefuture — months from now and evenyears from now.” He begins byproviding you with what he calls the top10 truths about direct mail fundraisingtaken from his years of reviewinghundreds of fundraising programs. Forexample, Number 8: “Very, very fewdonors upgrade their giving. The firstgift you receive from an individual islikely to be the amount written onsubsequent checks. And a significantminority of donors decrease the amountof their gifts.”

He advocates scheduling rather thanperfection. “The key to success in direct

mail fundraising is making sure you havea schedule that includes enough mailingsto give your donors, and prospectivedonors, sufficient opportunities tosupport your organization. If you’respending all of your time trying to makeeach mailing perfect, you won’t be able toget out all your mailings.”

He offers numerous tidbits that willsave you time and energy, such as thechapter entitled, “Seven Deadly Sins ofLetter Writing.” He says a mostcrippling flaw is the tendency to “writeessays, rather than personal letters.When I’m drafting a letter, I’m alwaysimagining a single donor or prospectivedonor, often someone I actually knowI try to “talk” with that person —

carry on, if you will, an imaginaryconversation — about why they mightwant to make a gift.” When he gets tothe last of the deadly sins, he says,“The seventh sin is in many ways themost deadly — the lack of gratitude.Perhaps fundraisers feel they work sohard that they forget their donors areextraordinary individuals in their ownright.” Well said!

This book captures the essence ofdirect mail fundraising in captivatinglanguage that every level of fundraisershould be able to benefit from. It’s aneasy read of 257 pages, good to take ontrips, or if you need to curl up with abook after work. It is good homeworkfor all. ■

11

12

Being a new parent, chairing the com-munity outreach committee of a start-upchildren’s museum, and, of course, a staffmember of the DMANF has recently ledme to ponder the question: How do wemake the children of today, tomorrow’sdonors? As we all know, children arebombarded each day with literally thou-sands of messages from television andradio, e-mail and pop-up ads, billboardsand buses, and all of the print media.How does the charitable community gettheir message through all of that clutter?

As I thought about my charitablework over the years, I went back to myupbringing. During my childhood, mymom was a 4-H leader and a homeroommother, and my dad helped run theannual fund drive at church, andbelonged to the local Lions Club.Eventually it became easier for them togive money instead of their time, butover the years, their dedication helpedme realize that charitable giving begins athome. With that thought in mind, Idecided to look for information aboutchildren’s charitable habits — and foundvery little. What I did find was informa-tion about volunteerism. For instance:

• People with children under the age of 18 in the home volunteered at a rate of 36.5% versus 23.7% forthose without children under the ageof 18 in the home

• For children ages 16-24, thoseenrolled in school volunteered at arate of 28.8% versus 15.0% of thosenot enrolled in school

• Women with children under the ageof 18 were most likely to volunteer for

educational youth services (at 45.9%),and religious activities (at 30.5%)

• Men with children under the age of18 were most likely to volunteer foreducational youth services (37.9%)and religious activities (32.5%)

• Most women with children under the age of 18 became involved withtheir main volunteer organization bybeing approached by the organiza-tion (39.5%), and were asked bysomeone within that organization orby a school (30.8%)

• Most men with children under theage of 18 became involved with theirmain volunteer organization bybeing approached by the organiza-tion (38.2%), and were asked bysomeone within that organization orby a school (28.0%)

However, this was minimal informa-tion, and I felt we needed more. So, withthe help of other DMA staff, and withDMANF member input, I created a shortsurvey to find out what is going on outthere to make today’s children, tomorrow’sdonors. Our December issue will providea complete detailed breakdown and analy-sis of our survey results. In this issue wepresent two articles: “Five Tips forRaising Charitable Children,” and “FromEntitlement to Gratitude: Philanthropyat a Crossroads” as food for thought aboutyour future donors. ■

Statistics obtained from the Bureau of Labor and Statistics Monthly LaborReview, August 2003. Available athttp://www.bls.gov/opub/mlr/2003/08/art1full.pdf

Charity Begins at Home...Planning for the Future: Your Next Generation of Donors

Jill Murphy, Member Services Manager, DMA Nonprofit Federation

For further information on DMANFmembership, the Corporate PartnerProgram or Friend of the FederationProgram contact:

Jill Murphy, Member ServicesManager, Tel.: 202.861.2497

13

As soon as I posed the question to thefourth grade class in suburbanPhiladelphia, the surge of energy waspalpable as their minds spun with theoverwhelming number of possibleanswers. “If someone gave you $100 withno strings attached, how would you useit?” My objective: to see how theirfinancial habits (i.e., how they share, save,and spend money) were taking shape. Asthey worked to complete the five-minuteassignment, the 31 sheets of paper werequickly filled with words and picturesthat might foreshadow the future ofphilanthropy.

Since 1990, I have asked the abovequestion of thousands of young peopleacross the country. And with each passingyear, I am more convinced thatphilanthropy is headed for a swift andsignificant decline unless we stem the tideof hypnotic consumption.

Consider the following:

1. There are nearly 80 million young people under age 25 in the U.S. — almost one-third of our population. (AmericanDemographics)

2. They spend and influence thespending of more than $1 trillion dollars a year in our $10 trillion dollar economy.(Prodigal Sons & Material Girls)

3. Young people spend five times more money than theirparents did at the same age —adjusted for inflation. (KGA Communications)

4. The average 21-year-old has beenthe recipient of more than 23million ad impressions (i.e., spendmessages) during their lifetime; that’sroughly 3000 a day. (AmericanDemographics)

Young people are being “taught” to spend and influence householdspending before they can form completesentences. With a lifetime of purchases infront of them, the competition is fiercefor shaping the financial habits ofAmerica’s young people. In fact, manyconsumer product companies frequentlywork with ad agencies and childpsychologists to formulate strategies thatexploit children’s emotional vulnerabilitiesall in the name of triggering a spendingbehavior.

A generation ago, the Federal Trade Commission considered restrictingadvertising aimed at children, but in1980, Congress passed a law preventingsuch action. Since then, the amount of money spent by advertisers to reachchildren has increased by a factor of 150 — from $100 million to over $15 billion a year. Children have become the hottest targets of today’smarketing dollars.

From Entitlement to Gratitude: Philanthropy at a CrossroadsNathan Dungan, President and Founder, Share-Save-Spend, LLC

Our society is working overtime toaddict young people to spending, and thesocial and economic fall-out could bestaggering. For an indication of what liesahead, consider the financial habits ofyoung adults in this mammothdemographic group:

1. The average college student has threecredit cards and $2,500 of creditcard debt. (Nellie Mae)

2. 20 percent of college students have$3,000 to $7,000 of credit card debt— an increase of 60 percent in thelast three years. (Nellie Mae)

3. Young people under 25 are one of the fastest growing age groupsfiling for bankruptcy in America.(Harvard University)

4. Bi-annual research of high schoolseniors shows the overwhelmingmajority are financially illiterate.(Jumpstart Coalition for PersonalFinancial Literacy)

Note that I have not yet mentioned the other two critical financial habits —sharing and saving —that are essential lifeskills for young people and for our society.That is because unless a young person has the good fortune of being taught thosevalues in the home, those habits will likelysuffer from extreme malnutrition.

We can do more. Young people need the village — families, nonprofits,educational institutions, thegovernment and businesses — to stand up and take notice that everybody wins when they have abalanced diet of healthy financial habits. I call it the Share-Save-Spend system.

Continued on Page 14

Curiously, the approach is not new.My grandmother who just celebrated her95th birthday has been living thephilosophy her entire life — Share, Save,and then Spend. For her and others Ihave met, the success comes in theprioritization and in the routine. It’s not aphilosophy they use when it isconvenient; rather, it is a lifestyle thatdefines the role money and things play intheir life.

And for families today that haveadopted the — dare I say —countercultural approach, the success hasbeen significant. Young people who couldn’t keep two quarters in theirpocket and repeatedly fell prey to theentitlement mantra are now managingtheir money and sharing their resourceswith great success and satisfaction.

The following are a few ideas that might help jumpstart yourconversations for talking and teaching about money:

The Share-Save-Spend System for Developing Healthy Financial Habits

1. Lead With Sharing — By sensitiz-ing children to the needs of others, youwill teach them gratitude for the thingsthey already have.

2. Set Saving Goals — Use goal set-ting to counter the “I wants.” If yourchild wants something, let them save forit. The patience and discipline instilledwill be invaluable when saving for big-ticket items like a car, a home, and retire-ment later in life.

3. Raise Their Marketing IQ:Consumer product companies are playing for keeps in shaping children’sfinancial habits. Spend time together analyzing the techniques companies useto trigger spending behavior.

4. Walk the Walk — Your financialhabits will shape how your children use money for decades. Periodicallyreview that your habits — Share-Save-Spend — match your desired outcome.

After 15 years and thousands ofconversations with young people andtheir parents, I have learned that theywill rise to the occasion when informedabout needs and, more specifically, askedto contribute. Two quick examples fromorganizations I volunteer for will helpillustrate my point.

In early 2003, the Alumni Board ofSt. Olaf College challenged a group ofsenior class leaders and in turn the entireclass of ‘03 to participate in the annualsenior giving campaign. The result: a 52-percent participation rate. A remarkable41-percent increase over the class of2002 — which held the previous recordfor senior class participation. To date,pledge fulfillment has been ahead of thegoal. In addition, 22 students from theclass of ‘03 signed up to fulfill theirpledge via electronic funds transfer — atrend the school hopes to build on.

Youth CARE (Cultural AppreciationRacial Equality) is a small nonprofitbased in the Twin Cities that servesurban youth of low-to-moderate incomefamilies from racially and culturallydiverse backgrounds. One of theiraward-winning programs is a camp onthe scenic St. Croix River. This pastsummer (week two of camp), I spent amorning with eight junior counselors

14

From Entitlement to Gratitude…Continued from Page 13

DID YOU MISS the recentRegional Conference in Chicago?

Limited quantities of the conference

resource book are available FREE to

nonprofit federation members and for a

$5.00 charge to others. Call JillMurphy at 202.861.2497.

(also former campers) talking aboutmoney and how financial habits areformed. Not only was it their firstpaying job, but for most, the moneyearned would be used for needs, notwants. At the end of our session, I askedthem to consider pooling some of theirmoney at the end of the summer toshare with the camp. On the final day of camp (week 10), with more than 200people in attendance, the juniorcounselors made a surprise presentationto the Camp Director of $135. She and the 200+ visitors were overwhelmedwith their demonstration of gratitudeand generosity.

In both instances, the formula forsuccess was quite simple: engage theaudience, ask questions, shareknowledge, establish a common vision,and create a plan. While one person maynot be able to counteract the enormityof Madison Avenue, if everyone doestheir part to help young people developand maintain healthy financial habits,their world, our world, and the futurewill be much, much brighter. ■

Nathan Dungan is the president andfounder of Share-Save-Spend, LLC, anorganization that helps people of all agesdevelop and maintain healthy financialhabits. His first book, Prodigal Sons andMaterial Girls: How Not to Be YourChild’s ATM (John Wiley) was writtento help parents shape their children’s finan-cial habits. Prior to founding Share-Save-Spend, Nathan was a top-performingfinancial advisor and vice president ofmarketing for a Fortune 500 financialservices company. For more information,visit www.sharesavespend.com

15

Five Tips for Raising Charitable Children:Teach Kids to Care About Their Local and Global Neighbors Courtesy of ARA Content

Every day, American children are inundated with messages about must-have toys, computer games, designer-label apparel, and more. In a ‘me-centered” culture, it can be quite a challenge to educate children aboutthe needs of the less fortunate in our neighborhoods and around the world.

Making charitable giving a priority can bring children a new awareness of the world and their place in it, and can instill a sense of gratitude andappreciation for what they have. World Vision, a humanitarian organizationserving the world’s poorest children and families in 100 countries, including the United States, offers these five recommendations for raisingcharitable children:

1. Expect your children to give. Set the giving standard and see if theydon’t rise up to meet it. Children of all ages typically respond well to rea-sonable yet challenging expectations.

2. Show them what and where you give. Some people will find this difficultbecause we were taught from a young age to be very private about our giv-ing. However, mentoring means modeling. Show your children what yougive and where. Talk about why you give and how you chose the organiza-tions. By introducing children to good charities and by sharing examples ofgiving, you will encourage trust and a sense of team spirit.

3. Match their giving. When you match your children’s giving, you begin tounderstand what touches their hearts, and they discover that you valuethese things. But training children to give away your money effectively isnot the same as encouraging them to be givers themselves. They will ulti-mately make personal giving decisions for themselves.

4. Take them with you on visits to charities. You may be surprised howmuch children learn just from being with you in any visits you make to char-ities. Being exposed to the work can open up a variety of ideas and conver-sations, and give children experiences to think about for weeks to come. Intime, they will want to go on their own, and they will know what to watchand ask for.

5. Celebrate their giving. Find ways to catch children in the act of giving.Let them know you notice and approve of their giving. Keep a light attitudeand an accepting countenance. Remind them that cheerful giving is one oflife’s great pleasures.

“It’s important to talk with children about making giving a habit rather thanan isolated holiday activity. By making it an ongoing habit, even if only insmall ways, you are moving from a model of ‘giving in order to receive’ to acompassionate way of life that they will carry with them,” says Dan Rice,national director of gift planning for World Vision. ■

16

Catholic Relief Services (CRS) wasfounded in 1943 by the U.S. Conferenceof Catholic Bishops. The initial purposeof CRS was to provide relief in Europeduring and following WWII, then inAsia during the Korean War. Over time,CRS’ role expanded to working withlocal partners in 95 countries with amuch wider range of programssupporting sustainable development:agriculture, water, education,microfinance, health, HIV/AIDS, andpeace building/civil society.

CRS’ primary purpose is to protectand preserve the human dignity of thepoor worldwide. As the officialinternational agency of the U.S.Catholic community, CRS is one-halfof Caritas America, part of aconfederation of 162 agenciesworldwide who fund and implementprograms for the poor and oppressedworldwide. (Catholic Charities[CCUSA] is CRS’ counterpart thatprovides social services within theUnited States.) CRS works without

regard to creed, race, gender, orethnicity.

Among its recent accomplishmentsare:

• Reaching the 60-million mark intotal direct and indirect beneficiariesserved by CRS programs annually,and passing $500 million in totalprogram revenue for the first time inits history.

• Serving actively in emergency reliefefforts in Iraq, Afghanistan, India,Haiti/Dominican Republic, Chad,and Madagascar.

• Receiving a grant from the Centersfor Disease Control for its work inHIV/AIDS, which will allow a CRS-led consortium to deliver anti-retroviral therapy. This initial $25million grant represents a five-yearcommitment of over $330 million.

• Recent recognition of CRS PresidentKen Hackett by President Bush,naming him to the Board ofDirectors of the MillenniumChallenge Corporation.

This issue, we recognize:

Catholic Relief Services

A feature highlighting Federation members

CRS national staff assemble in a Guatemalan village baing served by CRSagricultural technical assistance.

17

CRS has been able over the yearsto combine public sources of aid with private revenues, so thatindividual donations are leveraged to do far more than they wouldotherwise. In 2003, only 5.8% of CRS expenses were for fundraising and administration. ■

Key ContactCRS World Headquarters209 W Fayette StreetBaltimore MD 20201Phone: 888/277-7575.Web sites:www.catholicrelief.org;educational site:www.myglobalvillage.org;catalog site: www.crsgifts.org.

CRS coordinates delivery of grain to refugees in Chad, who have fled theSudanese region of Darfur.

A group of refugee children gather for a photograph by a CRS stafferworking in the Chad camps

Would yourorganization liketo be featured inMember Spotlight?

Contact UsWe look forward to hearingfrom you about MemberSpotlight or about anythingthat will help us to betterserve our members andfriends in the nonprofit community.

1111 19th Street NW, Ste. 1180 Washington, DC 20036

Phone: 202.628.4380 nonprofitfederation@the-dma.org

Xenia “Senny” Boone, Esq.Executive Director202.861.2498sboone@the-dma.org

Helen LeeOperations Manager202.861.2496hlee@the-dma.org

Jill MurphyMember Services Manager202.861.2497jmurphy@the-dma.org

The following lists top issues for DMANonprofit Federation members in thecoming months. To get involved in publicpolicy efforts on behalf of the nonprofitcommunity, please contact DMANFExecutive Director Senny Boone at202.861.2498, or via e-mail atsboone@the-dma.org.

✓ California Charitable SolicitationOverhaul: California StateAttorney General Bill Lockyer sent abill (SB 1262) to the legislature tooverhaul the state’s charitable solici-tation laws that would require:nonprofits to accept contributionsonly for the charitable purpose thatis expressed in the solicitation; tele-phone fundraisers to provide infor-mation that is impossible to provide(a per-hour, per-call fee arrangementwould have to be converted into an

accurate percentage of the grossbefore a campaign is conducted);retention for 10 years of donorrecords by both nonprofits andfundraisers; and nonprofits to estab-lish auditing committees, amongother items. After the DMANFand other groups rallied against thebill, Lockyer agreed to manychanges. (See Chair Letter, pg. 2).The bill is expected to pass theCalifornia Assembly and then go tothe Governor.

✓ Postal Rates: A postal rate case willbe filed at the end of 2004/early2005 with a rate hike that couldrange from 5 to 14.5 percent unlessa legislative solution is provided forthe Civil Service Retirement Systemescrow cost and the Postal Service’smilitary pension obligations. Postal

reform legislation to address thisissue as well as several other impor-tant reform measures (rate stability,rate regulation, worksharing dis-counts, flexibility for the PostalService in competitive productofferings) is moving in both theHouse (HR 4341 introduced byRepresentative John McHugh, 60cosponsors) and Senate (S 2468,introduced by Senator SusanCollins, 11 cosponsors). Both bills were reported out of theirrespective committees, and awaitfloor action that may be delayeduntil September due to a limitedsession calendar.

✓ Use of Personalization inNonprofit Standard Mail: ThePostal Service issued a proposed ruleto create what it terms a “bright linetest” to determine when a mail pieceshould be going at the higher FirstClass rate rather than the Standardmail rate because of the increasinguse of personalization. The testwould allow use of personalizationin Standard mail when advertisingor solicitation of donors is the“exclusive purpose” of the mailpiece, among other changes. TheDMANF filed comments seeking a change to the proposal since charities offer dual-purpose mailingsthat go beyond a mere solicitationto educate and advocate about theirmission. The DMANF argues thatthe rule could force most nonprofitsto pay the higher First Class rate. A rule change is expected soon; we believe the Postal Service did not intend the rule to impact non-profit fundraising. ■

18

Public Policy Scorecard

Nonprofit Public Policy IssuesSenny Boone, Esq., Executive Director, DMA Nonprofit Federation

Participate in our MEMBERGET-A-MEMBER PROGRAM!It’s a win-win opportunity for any employee of a DMANF member organization who refers another organization for membership. When thatorganization joins,* the referring party receives:

A $150 discount to The DMANF Conference of your choice!

PLUS, Mal Warwick’s new book FREE!

Contact Member Services Manager, Jill Murphy at 202.861.2497 or jmurphy@the-dma.org TODAY for more information.

*Dues must be received from the new member organization to obtain discount.

19

This is Part Two of a two-part serieson increasing donor response. Part One, The Quickest Way to a Donor’s Heart:Appreciation, appeared in the June 2004 issue.

There are four stages in a donor’slife. They can be viewed in terms ofthe Four Phases of Fundraising, or theFour I’s:

• Identify — This is the acquisitionstage. You identify prospective donorsfrom among countless “suspects,” and,once you approach them, a certainnumber raise their hands to expressinterest in your cause or institution. Inother words, they identify themselves.Naturally, what you do in response tothis expression of interest is critical. Ifyou fail to show appreciation for adonor’s first gift, and promptly so, he’svery likely to lose interest.

• Involve — If the average directmail donor in North America supports14 organizations per year, as myresearches have shown, is it reasonableto assume that she will continue tosupport all 14 nonprofits year afteryear? No — because other researchfindings make it clear that donors fre-quently switch loyalties. (Thedeplorable statistics on donor attritionalone are enough to prove that point!)To lessen attrition and increase thechances that a donor will stick withyou for years to come, you need toinvolve her in your organization —and that process begins with a well-

crafted welcome package. Involvementmight consist of volunteer work, ifyour organization offers volunteeropportunities; it might include somesort of activist participation — in agrassroots lobbying campaign, forexample; it could entail visits to youroffice or field projects, briefings, tours,informal gatherings with staff, or tele-phone conference calls to updatedonors on your work; or include dedi-cated members-only or donors-onlypages on your Web site; or anythingelse your imagination devises. Aninvolved donor is immeasurably lesslikely to become a lapsed donor.

• Inform — In simpler days, beforethe advent of electronic communica-tions, the average person wasn’t sub-jected to a seemingly endless stream ofso-called information (most of it’sundigested data, really) on a dailybasis. (Imagine, there was even a timein human history when a single indi-vidual could hope to read every singlebook printed in the world during hislifetime!) Nowadays, an educated per-son can be pressured to read tens ofthousands of words a day, including e-mail messages, electronic newsletters,Web site postings, letters, memos,magazines, newspapers, and whateverelse might impinge on his world —not to mention books. Is it any won-der, then, that the fundraiser’s basictool to keep donors informed — thequarterly or bimonthly newsletter —

Building Relationships Through the MailPart Two of a two-part series first featured in the June 2004 issue

Mal Warwick, Writer

Don’t miss your opportunity to advertise

in the next edition ofThe DMA NonprofitFederation Journal

For ad rates, please call 202.861.2497.

Continued on Page 20

Please visit our Web site atwww.millard.com

or call us at 603-924-9262.

doesn’t work as well as it used to?Please understand: I’m not suggestingthat you eliminate your newsletter. Infact, testing conducted by my clientssuggests that a strong donor newslettercan substantially lift renewal rates andaverage gifts. What I am suggesting isthat a simple newsletter may not beenough. To ensure that your donorsare kept fully up to date, you mayneed to be more creative — usingsome of the involvement techniques Icited immediately above, and not rely-ing solely on your newsletter and the

information in your special appeals.For example, a free electronic newslet-ter and an informative Web site areessential for most nonprofit organiza-tions today. But you may have to go toeven greater lengths to ensure thatyour donors are well-informed, usingone or more varieties of cultivationmailings. (See Table 2 below, for a guideto some common types of donor cultiva-tion mailings.)

• Invest — The ultimate gift for anynonprofit organization is a legacy gift.Such a gift represents an investment bya donor in the future of your organiza-tion. At the same time, in a well-man-aged nonprofit, it also represents thereturn on an investment in cultivating

and informing the donor — and ininspiring her to leave a legacy.

Through all four phases of the donordevelopment process, direct mail is anindispensable tool. The mail is mostfrequently used to recruit new donors;it’s an excellent way to promoteinvolvement opportunities; it’s essentialas a way to deliver printed informationabout an organization’s work; and it’sequally useful (in combination withefforts through other channels) topromote legacy giving. Thus, regardlessof the stage of a donor’s relationshipwith your organization, and regardlessof the level of his giving, direct mail willserve you well in helping you develop amutually satisfying relationship.

20

Building RelationshipsThrough The MailContinued from Page 19

21

Donor-Centered Fundraising

The craft of direct mail fundraisinggrew out of what used to be called“direct mail marketing,” best known tothe general public as junk mail. Junk— because, all too often, it advertisesgoods or services the recipient hasabsolutely no interest in. Junk —because, more often than not, it’scheaply and obviously mass-produced.Junk - because, in its blatantcommercialism and gaudy use of colorand graphics, it’s frequently tasteless.

Most direct mail fundraisers (likedirect marketers in general) bridle atthe mention of junk mail. The truth is,however, many direct mail fundraisingappeals still richly deserve to be

described as junk mail. The names andaddresses of the intended recipients areoften misspelled or long out of date.The criteria used to select prospects arefrequently fanciful, at best. Themessages are poorly crafted. Theappeals reek of commercialism,dominated by cheap and frequentlyinappropriate premiums. Anyresemblance between direct mailappeals like these and the pursuit ofphilanthropy is strictly coincidental.

That’s why I believe it’s important todistinguish between the marketer’sapproach to direct mail fundraisingand the fundraiser’s. The marketertends to think in terms of positioning— of broadcasting messages — of the

organization’s needs — of statistics —of market share and marketpenetration. The fundraiser, bycontrast, focuses on buildingrelationships with donors. (See Table 3, below.)

In reality, of course, my colleaguesand I blend both approaches. Thediscipline of marketing has producedan accumulation of shrewdobservations and insights about humanbehavior, and it offers useful guidancein analyzing results. We would be foolsto reject all that. Direct mail is, afterall, a form of marketing that hasproven itself so useful because (a) itenables us to communicate with lots of

Continued on Page 22

people at the same time, and (b) many of its results are measurable.What is distinctive about the approachthat we (and some other direct mailfundraisers) pursue is that we seek to put the donor at the center of our universe.

This perspective requires what KenBurnett, the celebrated author ofRelationship Fundraising and itssequels, calls the “90-degree shift.” Heis fond of drawing an analogy betweenfundraising and marketing, citing thedifference between the brand manager’schallenge and that of the customerrelationship manager. The brandmanager at The Kellogg Company —the cornflakes people — must sell asmany boxes of Frosted Flakes as hepossibly can to meet his monthly orquarterly target. By contrast, thecustomer relationship manager’s goal is to increase Kellogg’s share of the 11,000 boxes of dry cereal you may buy in your lifetime. The difference reflects a 90-degreeshift in perspective-and that representsthe difference between what I referto as the marketer’s and the fundraiser’s approaches.

The Five Assumptions

In my view, the concept ofRelationship Fundraising popularizedby Ken Burnett is based on fiveassumptions:

1. Most donors are generous andcaring people. They want to help,and the fundraiser’s job is to

inspire them to avail themselvesof opportunities to do so.

2. Most donors are also intelligent.They usually know when they’rebeing taken advantage of, andthey don’t like it.

3. Most donors expect to be treatedcourteously and are offendedwhen they’re not.

4. Donors are as varied in theirinterests and habits as people ingeneral. Some of them demandopportunities to express theirindividual preferences and to betreated as the individuals they are.All of them appreciate suchtreatment.

5. We are missing a huge number ofopportunities if we don’t operate adonor-centered approach,particularly if we persist insending people what we wantthem to have rather than whatthey want to receive (which is notat all the same thing!).

Burnett’s individual perspectivesaside, these five points form the basisof my thinking about fundraising.They help explain why I:

• Insist on placing such emphasison thank-you letters and welcome packages

• Employ personalization as often as possible in appeals tocurrent donors

• Feel it’s critical to build appealsaround the benefits to the donorrather than the needs of theorganization

22

Building RelationshipsThrough The MailContinued from Page 21

COOPERATIVE MAIL RULE GUIDANCEPrudent Contracting with a

Professional Fundraiser

For a copy of thisimportant document, go to

www.nonprofitfederation.org

23

Think Holistically

If you accept the five assumptions,then you’ll think about yourdevelopment program in a holisticfashion, taking into account all the communications from yourorganization to your donors — not just those appeals your owndepartment produces. The bimonthlynewsletter counts, too. So do thequarterly magazine, the annual report,the legacy marketing materials fromthe planned giving department, theinvitations to special events, andwhatever else might be included in thecommunications stream your donorsmay receive in the course of a year. Ifyou want to put the donor at thecenter of your universe, you’ll analyzethis stream of messages, research whichitems donors want to receive and

which ones they don’t, and revise thefundraising and communicationprogram accordingly.

But it’s not enough to break down thevertical barriers separating yourdepartment from all the other officesthat independently communicate withyour donors. You’ll also need toeliminate the horizontal barriers that, inso many nonprofit organizations, rigidlyseparate donors by giving level. Suchdivisions are well-intended. For example,by segregating upper-level donors in a“major gifts office,” extra-special donorsare guaranteed extra-special treatment.However, all too often, this treatmentmeans that these donors are excludedfrom the benefit of the messages youhave crafted so carefully to inspire themto give. I have seen countless cases in

which major donors — defined as thosewhose individual gifts reach the $1,000,$5,000, or $10,000 level — are removedfrom the direct mail or membership rollsand stop receiving most of the printedmaterials that succeeded so brilliantly ininspiring them to become major donors.If you truly subscribe to the concept ofdonor-centered fundraising, you’ll nevermake such a mistake. ■

Excerpted from Revolution in theMailbox, Revised Edition, by MalWarwick (Jossey-Bass, 2004). Copyright2004 by Mal Warwick. All rights reserved.DMA Nonprofit Federation members mayobtain a 20% discount on copies of thisbook at www.malwarwick.com. The author may be reached at mal@malwarwick.com.

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