Paralyzed Veterans of America Updates a Mature Direct Marketing ModelTwenty-six years ago, Paralyzed Veterans of America began a highly successful fundraising campaign based on direct mail with premiums. Now, the rising cost of materials, an aging donor base and greater competition in the nonprofit sector are causing PVA marketing executives to look for ways to update their direct mail program.
The PVA is trying to attract new donors with premiums that appeal to younger people, such as high-quality 8-inch-by-11-inch paper that can be used with computer printers and computer software that helps people keep track of material donations for tax purposes. A Lenox angel pin sent out over the holidays brought in an average donation of $17 and a 27 percent return rate.
The nonprofit is also improving its lists by identifying the characteristics of good donors -- age, sex and geographic location. And by consolidating lists and mailing premium pieces to both premium and nonpremium donors, PVA has improved its response rate by 50 percent, said Robert Hansen, director of direct marketing.
PVA fundraising was able to reach "critical mass" from the very beginning, Hansen said. This was particularly important to the PVA, because 90 percent to 95 percent of PVA activities -- research, sporting events, education, care and advocacy -- are supported by direct marketing; the organization gets no revenue from the federal government or membership dues.
PVA sends out about 68 million pieces of direct mail a year: 48 million premium pieces sent to donors; 10 million to 12 million premium pieces sent to prospective donors; and 10 million nonpremium pieces split evenly between donors and prospective donors.
"Our fundraising is based on a large number of modest gifts," Hansen said.
Premiums are typically address labels, greeting cards and whole stationery portfolios for high-value donors. These direct mail pieces cost from 40 to 70 cents to produce and bring in an average donation of $8 and a response rate from 8 percent to 30 percent.
PVA's direct marketing model has worked very well since its inception. Fundraising has gone from $10 million in the late 1970s to $106 million in 1998. But even with the economy of mass mailings, the rising price of postage and material is affecting PVA mailings, Hansen said.
The PVA has attempted to cut production costs by bidding out the process to multiple vendors, he said. The nonprofit is also turning to the Internet for cost-effective online donations through a partnership with charity portal GreaterGood.com and by creating its own Web site HYPERLINK "http://www.pva.org" www.pva.org and promoting it in 80 million of its direct mail pieces.
Competition is another problem. Since PVA began using address labels as premiums in the late '70s, "everyone and his brother is doing labels," Hansen said. Greeting cards are too expensive for many nonprofits that do not have the extensive database of PVA and cannot benefit from the economy of mass mailings, but the market for these cards is steadily dwindling.
The PVA relies largely on donors who have memories of World War II.
"Our average donors are women over 60 -- people who were sitting under the apple tree waiting for their husbands, brothers and sons," said Jeanne Harris, associate director of direct marketing.
"What happens 20 years from now is a fundraising and organizational problem we don't have the answer to yet," Hansen said. Two possible answers are improving lists and updating premiums.
The PVA uses two main groups of lists -- catalogers for premium mailings and fundraisers for nonpremium mailings. This reflects the psychology of the donors.
"Products help justify the gift," Hanson said. "People give because they want the product, and they want to benefit the organization. We blend the product and the fundraising mission. Nonpremium gifts are cause-driven and emotional. They generally promote advocacy and are based on who we are and what we do."
There are areas where change could prove counterproductive, however. "Ten greeting cards in a box is a workable formula," Hansen said. "Fewer cards make for a reduction in gifts."