Released in May, this all-Canadian report unpacks how direct mail fundraising programs performed last year, thanks to the amazing charities who share their results with us! If you’ve been wondering how your fundraising measures up against other charities in the nonprofit sector, this is the report for you. Use it to show off your success, identify key areas to shore up, and set brand-new targets for your planning!
The first DM Benchmarks report was conducted back in 2018, making this our sixth report! And what did we uncover in this year’s data mining?
2024 is direct mail’s new normal
Direct mail fundraising has seen a whole lot of upheaval in the past few years. Long considered a steady, stable source of unrestricted revenue, direct mail became a fundraising darling in 2020 and even 2021, bringing in record revenues as fundraising events and face-to-face channels got hit hard by the pandemic. In 2022, as the world more fully re-opened, results took a (pretty predictable!) nose dive.
Or, more accurately, they evened back out after a two-year, unprecedented-times-driven, high. And this year, after all those big swings, we see very limited movement between most benchmarks in 2022 and 2023. The numbers stayed stable, with only one or two really meaningful shifts.
What does that mean for fundraisers? Well, you have a new normal. It’s been hard to plan confidently since 2020, with results being so pandemic-influenced. But now, we see stability that lets us feel certain that we can project safely, using 2023’s results as a launchpad for growth.
Integration has never been more important to fundraising
Our analysis this year found that direct mail revenue fell by 14% year-over-year for our participant charities. But other revenue, which includes digital revenue, rose by the exact same proportion,
When we combined revenue sources together, gross revenue was functionally flat (falling $2,358 in 2023, for those of you who want the specifics).
This finding tracks with what we, and many other charities and nonprofits, have been seeing – revenue shifting away from the mail and towards digital. But is it, really? We don’t think so. Our 2022 research uncovered that 61% of donations that are triggered by the mail, get made online. People open the envelope and read the letter – then scan a QR code or Google your org to give. It’s not that digital is more effective than mail. It’s that the mail and digital are working together to bring in a donation: the persuasive power of direct mail, the hyper-convenience of online giving.
The giving experience is multi-channel. And, our reporting and tracking needs to be as well. When multiple channels are working together to secure a donation, it’s vital that we look beyond ‘mail revenue’ and ‘digital revenue’ and so forth, and start to take a more integrated approach to results.
We know that hard costs are going to continue to impact the mail – cost per dollar raised rose $0.03 this year, after all. The temptation may be to see a more expensive channel that looks like it’s raising less money, and cut. But that totally misses the multi-channel experience at play, and will likely have a substantial revenue implication.
Direct mail acquisition is a multi-step process
It cost nonprofits more to acquire a new donor through the mail this year, as cost to acquire rose 16% year-over-year, to $161.
On average, first-time donors give $60, and once you’ve moved them to a second- and third-gift, donors give an average of $83 through the mail. That means you need a solid three gifts from a new donor before they’re breaking even.
At the top of the funnel, this means maximizing the quality of the donors you bring in. This year, for the first time, we’ve published benchmarks for acquisition source. We found that the best response rates came from rented lists (1.1%) and traded lists (1.9%). But those sources also had the lowest average gift ($69 and $42, respectively). Those sources will bring in more donors, but those donors might take longer to break even, depending on how efficiently you renew and upgrade.
Meanwhile, ex-patients responded at 0.65%, while unaddressed prospecting responded at 0.25%. But, those donors gave much more generously, with first-time ex-patient donors giving an average of $117, and first-time unaddressed folks giving a whopping $155 (might this be because of postal code targeting in wealthy neighbourhoods? We can’t say for sure, but it’s possible.)
And on top of choosing (or likelier, mixing) acquisition sources, you then need to renew those folks! And there’s a silver lining here, which is that renewal rates were steady this year, dropping just 1% to 64%. The higher you can lift this benchmark, the less your acquisition efforts will go to backfilling churn, and the more net growth you’ll power!
Hospital foundation fundraising benchmarks stand alone
This year, hospital foundations results were so markedly different from other causes that we chose to separate them out, to paint a clearer benchmarks picture.
Hospital foundation donors responded to the mail at 5.1% in 2023, almost a full 2% lower than the 6.9% response rate from other causes.
This was offset, though by the immense generosity of hospital foundation donors. Perhaps driven by a strong personal connection to the cause through receiving healthcare, or having a loved one receive healthcare, these donors gave an average gift of $174, more than double the $78 given by non-hospital foundation donors. This means that hospital foundations had a cost per dollar raised of just $0.15, compared to the $0.28 of other causes.
Interestingly, this generosity doesn’t necessarily translate to loyalty. Gift frequency to hospital foundations was 1.1 while other causes clocked in at 1.5. And hospital foundations renewed 55% of their donors on average, while other causes yielded renewal rates on average of 64%.
From an acquisition perspective, we see a similar trend regarding response rates and average gift, with response rates tracking behind (0.6% vs. 1.0%) and average gift charging ahead ($125 vs. $56) of non-hospitals. It all evens out, as cost to acquire a new donor is just $7 different between org types. Download the Direct Mail Benchmarks 2024 Report to learn more.
What’s coming up for direct mail in 2025?
Want to be a part of the next Benchmarks report? We invite any Canadian charity with a mail program to apply – and as a special thank-you, you’ll get your very own benchmarks report (plus early access to the overall report!). Curious to know more? Sign-up now, and you’ll be on the list to hear from us with data details in early 2025.
