By Alan Sharpe, CFRE
Don’t listen to fundraising consultants like me who say you should never ask for a gift in a thank-you letter.
That’s what I used to say before I was hired by a non-profit that did ask for donations in its gift acknowledgement letters. I wanted to axe the practice. But then the director of finance showed me that including a reply device and business reply envelope with every thank-you letter raised over $150,000 annually for the charity. After that I wasn’t so quick to condemn the practice.
I still think thanking a donor and asking for a gift at the same time is crass. That’s what my gut says. And I agree with Penelope Burk, Michael Rosen and other fundraising practitioners when they say the practice is likely to drive away donors.
But does asking for a gift in a thank-you letter help or harm your charity? Test and find out.
Testing is the only way to settle this controversy. Those who advocate soliciting gifts in thank-you letters say it raises money. Those who deplore the practice say it drives donors away. Testing is the sure way to discover who is right.
Here’s one way to conduct your test.
1. Starting from today, assign every new donor you acquire, regardless of channel (phone, mail, face-to-face and so on) to Group A or Group B. Divide the new donors evenly between each group. For donors currently in your database, continue mailing them the kinds of thank-you letters you have been mailing up until today.
2. Mail Group A thank-you letters that ask for another gift. Make the ask explicit and obvious, easy to find in the letter. Include in a reply slip and business reply envelope. Do this for three years.
3. Mail Group B the same thank-you letters that you mail to Group A, except remove any requests for a donation. Simply thank the donors. Do not even hint at another gift. Do not include a reply slip and do not include a business reply envelope. Do this for three years.
4. After three years, measure the following for each group:
A. Second Gift Conversion Rate: Which group has the highest percentage of donors who made a second gift?
B. Number of Gifts Per Year: Which donors gave the most gifts per year, on average, those in Group A or those in Group B?
C. Gross Revenue: Which group generated the most money?
D. Gross Revenue Per Donor: Which group has the highest gross revenue per donor?
E. Attrition Rate: Which group has the highest percentage of donors who fell away each year?
F. Lifetime Value: Which group has the highest lifetime value per donor?
Run this test for three years and you’ll know for cash (literally) whether asking your donors for a gift in your thank-you letters hurts your charity or helps you. Then become a fundraising consultant. Everyone will listen to you.
Learn More
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The vast amount of small nonprofit organizations don’t have the time, resources or sheer volume of donors to test the practice of asking for a second gift in a thank you letter.
I concur with Lisa Sargent (https://www.sofii.org/node/270) that the practice is very short-term strategy. What’s more it’s crass. We’re looking to build long-term loyalty here, remember?
What I have found quite effective, for the small npo, is to include a “pass it along” packet with thank you letters. Something that the recipient can share with a friend, neighbor, or family member.
Why would you even risk using this strategy when donor attrition rates are so high?
I recommend a test to settle the matter. I am not encouraging organizations to increase their attrition rates. I’m recommending that they test to see if asking their donors for gifts in their thank-you letters harms or helps their organization. Each side on this issue feels strongly they are right. I dislike the practice of thanking and asking at the same time. I think it’s tacky. But I can’t say it’s harmful to donor retention or lifetime donor value for every charity all the time. That’s why I recommend each charity test.
I agree completely that you have to test to validate (or disprove) your beliefs. Thanks for laying out the process so simply! Long live fact-based decision making.
Alan, first let me thank you for including my name in the same sentence with Penelope Burk. It’s an honor. As you know, Penny and I are huge proponents of donor-centered fundraising. In keeping with that belief, I’d like to offer a suggestion: The default position of a nonprofit organization should be to NOT put an ask into a thank-you letter. The only time this should be violated in the short-term is to conduct a limited test, something along the lines of what you have suggested. In the long-term, an ask in a thank-you should not be used unless the test data justifies it. What do you think?
I agree with you. I dislike the practice of asking for gifts in thank-you letters. Always have. But I also dislike telephone fundraising, and it works well for many charities. If Zi had my way, no charity would ever ask for gifts in their than-you letters, and, if they did, no one would respond to these rude, ungrateful fundraisers. OK, time to dismount my hobby horse.
I dislike asking for an additional gift in a thank-you letter, as if the only time you correspond with a donor is to ask, ask, ask for more money! However, I have nothing against enclosing a business reply envelope and a form stating that an additional donation can be made In Honor or In Memory of someone and a notification sent. This would temper the additional ask and make it more palatable. M. M. Kramer