*Fundraisers See Demographic Shift, Higher Cost

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NEW YORK--Direct mail maintains its status as the most effective means of raising money for nonprofits, but costs are going up and the demographics of donors is shifting, according to the Greater New York Chapter of the National Society of Fundraising Executives which held its 20th annual conference on philanthropy here yesterday.

"Doing direct mail is becoming more expensive for nonprofits," said Sheila Stanford, president of the Stanford Group, New York, a full-service direct mail agency for nonprofits, and a member of the Greater New York Chapter. "In order to be effective, organizations need to be more competitive, conscientious of cost and of the most cost-effective ways to mail. There are simply more nonprofit groups in a person's mailbox now then there were a few years ago."

As a result of the growing competition and lower response rates, nonprofits are conducting analysis and segmentation upfront to better identify the best prospective donors. And that is changing. This past year not only were older people giving more because of the economy, but so were younger men and women and minorities.

"Organizations are trying very hard to pick who is going to best respond to mailings," she said. "Everyone is doing something different. Some groups are including a lot more text in their pieces while some are using less. Some groups are mailing a lot more than they did a number of years ago while some are mailing less."

According to Patricia Pollok, president of the Greater New York Chapter of the NSFRE, the fundraising industry as a whole has become more impersonal, mechanical and mercenary. But the amount of donations solicited has steadily increased. In 1998 the total amount of donations received by nonprofit organizations throughout the country was $175 billion, up from $158 billion in 1997.

Ann Kaplan, research director, at the American Association Fund Raising Council, said the increase in giving is being driven by major gifts.

"Years a go a $1 million gift was looked as a wonderful thing worthy of opening a bottle of champagne," Kaplan said. "Now it's still a wonderful thing, but it has become more common, even for mid-size organizations."

Kaplan said the increase in major gifts is a result of the economy, good stewardship by the nonprofit organizations and good leadership amongst the major contributors.

"No one used to train to be a professional fundraiser twenty years ago," Pollok said. "It's no longer someone's wife coming in three days a week to help write and send out mailings or make calls. It's the professionals, who go to school and train to be professionals, who are doing all of that stuff today."

As for direct e-mails and the Web, Stanford doesn't believe she will see them replace direct mail to solicit donations in her lifetime.

"Everyone has now realized that if you are not on the Web than you are going to get left behind," Pollok said. "I see the Web as being much more useful right now as an information source. It has not been terribly effective as a fundraising source up to this point. Maybe somewhere down the line, but I don't see it replacing direct mail just yet."

One of the reasons the Web is not entirely effective for soliciting donations she said is because most Web users are young males, who are not usually the most frequent donors to nonprofit groups.

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