During the mid-'80s to early '90s, the Bowery Mission in New York City was experiencing problems that most nonprofit agencies endure: a dwindling file of active donors and fewer donations.
But in 1992, the privately funded homeless shelter began a relationship with the Grizzard Direct Marketing Agency, Los Angeles, that helped it make a 180-degree turn and showed how a direct marketing agency and nonprofit organization can work together to conduct the proper donor research, analyze those results and help an organization get the most from its donors.
“It wasn't something that happened right away,” said Rod Malloy, director of development for the 118-year-old mission, referring to the turnaround. “It took about four years to get from that period of nervousness and concern over the future to seeing the significant increases we are now seeing every year. It was a gradual process.”
Those increases include a 20 percent rise in revenue from donations and direct response mailings over the last couple of years and an annual increase of nearly 100 percent in the mission's active donor file of nearly 50,000 people.
The Bowery Mission's problems began when officials tried to recruit donors through a telemarketing program, which saw donations drop by 60 percent to 70 percent.
At the same time, the mission was putting much of its efforts and money into a book club and magazine. It also was trying to open two new centers, the Bowery Mission Transitional Center and the Bowery Mission Women's Center, with its depleting funds. And, according to Malloy, its direct mailing agency didn't understand the mission's market.
Then, in 1992, the mission signed on with Grizzard.
“At first it was pretty rocky,” Malloy said. “We avoided a couple of near disasters with our software conversions, and eventually things got smoother.”
Randy Brewer, vice president at Grizzard, said the most important thing for any nonprofit organization to do when it begins working with a direct marketing agency is to be completely honest.
“Every organization is different, but I suggest that they always be honest with one another and ask a lot of tough questions of themselves,” he said. “They have to evaluate their current status and take a look at their numbers. They have to decide where it is they want to be. We can help them, but we can't answer those questions for them.”
The first step for Bowery Mission officials was to conduct market research, plan and strategize before making future investments. In what Malloy said was the most significant step in the process, Grizzard helped set up focus groups of donors and produced their demographic and psychographic profiles.
“It was something that the mission had never done before so there was some apprehension on their part to invest in the results,” Malloy said. “But most of the positive results that we have seen over the last couple of years were based on the application of the information we got from those focus group studies.”
“These groups will help you answer three important questions,” Brewer said. “Who are your donors, where is your target market and what is your key message?”
In the first year of the partnership, the mission saw less than a 50-cent return on each dollar spent. But because of what it learned from the group studies, its direct mail packages were more successful. The mission branched out into other areas of media, using newspaper inserts, space ads and advertisements on the subway.
The mission also realized that more public-awareness advertising was needed to define its position for its target market.
Grizzard changed the mission's mailing address for donations from White Plains, NY, to its location on Manhattan's Lower East Side.
“People are going to send donations to an address they relate to the cause, and that wasn't happening with a suburban mailing address,” Brewer said. “We also helped create a tag line for them when they previously had none, and we changed their logo.”
Brewer said positioning is one of the key aspects to being a successful nonprofit organization.
“We helped them in positioning themselves in the city as a credible and historical charity helping the needy,” Brewer said.
Malloy said the partnership helped him realize that for any organization to successfully operate it has to plan, analyze its planning and then plan from those results.
“A lot of organizations fall into the trap of going from one project to the next and not taking the time to look at what has worked and didn't work in the past,” Molloy said. “This is a successful relationship. They provided the expertise and the follow-through, and we played the pessimistic side in projecting numbers and goals that were achievable.”
Brewer agreed that the relationship had a rocky start, but he said that the Bowery Mission did the one thing that all nonprofit organizations should do when working with an agency.
“They stuck it out,” he said. “I want to encourage nonprofit organizations that when they have decided to work with a direct marketing agency that they don't keep jumping ship. They have to give them time to learn and then re-learn how to do business with you.”
