Faced with declining response rates, fundraisers at Disabled American Veterans have decided once again to put return postage stamps on envelopes included in acquisition mailings. The organization had terminated the practice in 1992, 14 months after initiating it.
Last fall, the nonprofit, which provides services and advocacy for disabled veterans, tested 25,000 packages with stamped return envelopes against 25,000 without stamps, said Susan Loth, assistant director of fundraising. Response rates on the packages with stamped envelopes increased from 5 percent to 8 percent.
Though stamped envelopes raise the cost of the packages considerably, the better response rates will allow DAV to send fewer packages, so the return on investment is much improved.
Traditionally, DAV sends 30 million acquisition packages a year, or 3 million every month except June and October. The nonprofit plans to send only 18 million of the new packages yearly, on a monthly schedule yet to be determined.
Loth expects to drop the first packages as early as July but no later than September.
“Given the possibility of increases in postal rates, the situation is volatile,” she said.
The package consists of several letters, labels, flag decals, and a return form and envelope. The letter suggests donations based on pennies a day over the course of a year. The check-off boxes on the tear-off reply form suggest donation amounts, for example, of $7.30 (2 cents a day) and $18.25 (5 cents a day). DAV uses lists of mail-order buyers, and the typical donor is older than age 60.
In the late 1960s, house-file testing of envelopes with different combinations of stamps on return envelopes showed that “the greater the number of stamps, the higher the response rate,” Loth said.
Until the mid-1980s, acquisition mailings made money or broke even without stamps on return envelopes. Then results began to change. In 1990, DAV tested return postage stamps on acquisition mailings, and the response rate went from 7 percent to 12 percent.
DAV stamped its acquisition packages from August 1991 to October 1992, when increased postal rates lowered the ROI to the point of unprofitability.
But when response rates, typically 7 percent, began dropping in 1995 to as low as 2 percent, DAV fundraisers started to consider returning to the 1991-92 model.
For now, Loth plans to “continue to evaluate the use of multiple stamps on return envelopes, especially with looming postage increases for 2002.”