How Smart Nonprofits Increase Donations by Using Gift Strings - By: Daniel ODonnell

First, just to clarify my terminology for this article, a "gift string" is the series of dollar amounts asked for in a nonprofit, direct mail fundraising letter. You've probably seen typical direct response devices that ask for a gift string of $25 - $50 or $100. It's easy to see that they provide options to the donor, but did you know there are many ways for nonprofit organizations to select the amounts that will enhance the donor's likelihood of increasing their donation amount?

The Psychology Behind Gift Strings
Gift strings work to increase donations because they play on people's resistance to being in the lowest category. None of us like to be at the bottom of anything. We all have a natural tendency to want to move our status up. When given a choice among three items, many of us would like to be in the middle or above. We don't want to feel guilty about being in the lowest choice.

Be careful about selecting the dollar amounts. Simply wanting to be in the middle or top category won't force people to select a higher gift amount if the higher amounts are too high. Finding the right balance of how much more to ask for in each category will nudge a percentage of the donor file up without offending those who can't or won't move up. Asking for too much can turn people off and make them unlikely to give at all. They may react with an internal thought "They want HOW MUCH? Are they crazy?" Then they throw away your mail piece and forget about it.

Keep in mind that gift strings only affect a portion of the donors. Many people simply aren't going to change their giving level. The good new is that gift strings will move a portion of the donors up. There's a good chance that you'll get 20% of your donors to increase their donation by 25% or more. Make that happen and you will have acquired more income without having to find new donors.

Setting the Dollar Amount when a Prior Giving History is Known
One very common gift string technique is based on prior giving history. It assumes you have a donor file with known gift amounts for each individual from a previous fundraising campaign. Using gift strings in this way also assumes you are producing your direct mail campaign with a personalized response device such as a tear-off coupon on the bottom of a letter or a personalized response card. A mail house programmer is usually needed to automate the gift string functions, but they can be done manually by novice spreadsheet users on small lists (under 10,000 or so).

When you supply your donor list to the mail house, include the last donation amount for each donor. Instruct the mail house to fill the gift string amounts based on this formula: the first amount is 1x the previous gift, the second option is 1.5x the prior gift, and the last amount is 2x the prior gift. To keep the gift amounts from becoming unusual amounts with pennies, tell the mail house programmer to round all numbers up to the nearest $5.

As an example, we'll assume one of your donors (Donor A) has a prior giving history of a $25 donation and another donor (Donor B) has a previous gift of $100. There are 3 checkboxes with gift string options on your response device.

With the above formula, Donor A will receive your campaign with this gift string:
$25 - $40 - $50

With the above formula, Donor B will receive your campaign with this gift string:
$100 - $150 - $200

Asking for more than 2x the original gift will certainly offend many donors, it's too much to reasonably expect. If you think there will be resistance to the formula above, I would suggest that you can try lower gift string multiples of 1x, 1.25x and 1.5x the original gift.

Once you've completed the mailing and you've determined that you've received the majority of donations, measure your returns to see if you've increased your average donation and your total donations.

Use an "Add-on" formula
If you don't like the multiplication formula, try this Add-on technique. For the first gift string amount use 1x the previous gift, the second amount can be 1x the previous donation plus $10, and the third gift amount can be 1x the previous amount plus $20. Using our Donors above the resulting gift strings would be:
Donor A will receive your campaign with this gift string:
$25 - $35 - $45

With the above formula, Donor B will receive your campaign with this gift string:
$100 - $110 - $120

Apply a Different Formula to Each Segment of Your List
If you have segmented your donor file into High Level Donors and Low Donors, it can be advantageous to vary the formulas for each group. Low donors can get the Add-on formula and High donors can get the 1x, 1.5x and 2x formula.

Try all of the above to increase your returns without having to increase the number of donors on your list. Mix and match the formulas to get optimum results.

A note of caution - The multiplication formula will not work on donor files with $25 or less in their previous giving history. Always use the Add-on technique or a "hard-coded" gift string for this group. A hard-coded gift string is a predetermined series of numbers for an entire segment of a list. An example would be to segment all donors who gave less than $25 and to apply the same gift string of $20 - $30 - $50 to all donors in the segment.

Setting the Dollar Amount when there is NO Previous Giving History
Use a hard-coded gift string, as described above, when you don't know the amounts given to you by your donors. This style of gift string works for prospects too since you don't have any history of donations from them.

Try gift strings on your next mailing - good luck on increased donations!

About the Author

Dan ODonnell is Creative Director and Owner of Direct Axis, a 4-member design/communications agency. Direct Axis specializes in nonprofits, manufacturers and higher education.
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