The American Cancer Society’s income from new donors fell by $11.3m (£7m) after the charity suspended its direct mail acquisition programme in 2013.
The cancer charity, which is based in Atlanta, Georgia, said at a conference in New York earlier this month that its new-donor numbers also fell by 11 per cent over the course of year.
Three ACS staff members shared the results as part of a presentation called Direct Mail Acquisition – Engine for Growth or Treadmill for Survival? at the Direct Marketing Association Nonprofit Federation’s Nonprofit Conference in New York this month.
They estimated that the charity would have lost $29.5m (£19m) in new-donor income if the ACS had continued without a direct mail programme over a five-year period and said the negative impact on planned gifts had not yet been determined, but was likely to be noticeable because direct mail-acquired donors had contributed $51m (£33m) to planned giving between 2002 and 2012.
The charity’s voluntary income fell from $885m (£572m) in 2013 to $840m (£543m) the following year, its accounts show.
Suspension of direct mail by the charity appeared to reduce income for ACS’s Relay for Life fundraising event: it raised $355m (£227m) from the event last year, $25m (£16m) less than in the previous year.
ACS suspended its direct mail acquisition programme between January 2013 and June 2014.
Karen Downs, vice-president of direct response marketing at ACS, told Third Sector the organisation made the decision based on return-on-investment analysis that looked at investments across the organisation. She said the decision coincided with, but was not directly related to, a three-year transformation strategy for the charity, which consolidated 13 separate divisions into one single entity.
Catharine Holihan, director of direct marketing at the ACS, said at the conference that the suspension of the programme, which was decided by the ACS leadership team in 2012, was a "strategic decision to orient our fundraising programmes to maximise revenue from existing donor audiences, grow into new ones and rethink how we were doing things".
She said the charity had understood immediately that direct mail acquisition revenue would decline. It soon also became apparent, she said, that the charity’s renewal programme had been affected.
Nevertheless, she said, it had greatly helped the charity to pause the programme for a time, because it allowed executives to "step back and look at programmes with fresh eyes", test different things and see what would work best for the organisation.
Downs said the charity decided to restart its direct mail acquisition programme in spring 2014 after seeing the impact that suspending the programme had had on ACS’s income. "We changed our investment strategy in order to stem that loss," she said.
According to the fundraiser Jeff Brooks, the ACS’s results are proof that fundraisers that stop using direct mail will immediately lose revenue, and their event revenue might also suffer. Writing in his blog this week, he said charities that do this would get fewer planned giving prospects and see their major donor programmes shrink.
"I think the ACS experiment teaches us something hugely important that every fundraiser should pay attention to: Direct mail (still) matters!" wrote Brooks, who is creative director of the US-based fundraising agency TrueSense Marketing, but writes the blog in a personal capacity.
"We've been hearing from a lot of sources for at least 10 years now that direct mail is dying. Or even already dead. Direct mail is not dead. You'd have to be a complete idiot to walk away from it."
Brooks said it would take years for the ACS to recover from the impact on its planned gifts and that the ACS had also effectively "throttled the pipeline" into its major donor programme because direct mail was where most major donors came from.