ROI

That would be "Return on Investment."
And we all care about it.
If I spend $500,000 on marketing and communication activities -- what do I get back?
For years Direct Marketing has given fund raisers the tools to track return on investment. We can identify the average gift, the median gift, rate of response and the direct ROI. We can understand the cost of acquiring a new donor through DRTV, DR Mail, phone and print advertising.
What's a little fuzzy is the auxiliary activities we do.
What impact does brand have on the response rate? What impact do loyalty materials make on long term donor value? What impact do regular reports make on increased giving?
Let me suggest that ROI is much more complicated than we may have thought. The impact of brand, word-of-mouth, the momentum of a great campaign are difficult to access and attribute dollar amounts to.
But we know, without a question, that they do contribute.
Last year, Ten Thousand Villages raised more than a million dollars through their Christmas gift program. The literal investment into marketing materials was minimal. But word of mouth, spontaneous national press coverage, the already well established brand identity and the customer recognition at a retail level all contributed to increased donations. Most of those costs were absorbed by other parts of the organization.
So what do we know?
First of all, national press coverage on a specific campaign increases overall donation levels. Rick Mercer raising money for mosquito nets and telling the whole country that on national television impacts donations. Well known media stars, television and film people and musicians raise the level of public engagement. People want to be involved in a reputable organization. The cost of that is often many years of doing good work, integrity in programming and relationship with the press.
Secondly, word of mouth can impact but is difficult to track. Operation Christmas Child is a North American tradition -- probably one of the most ubiquitous Christmas campaigns we have. The "shoe box" is synonymous with children who have needs. For many families, it's the one charitable activity they choose to do as a unit. I can't tell you how often I've heard: "I just picked up my shoe box (no explanation needed), have you got yours yet?"
Momentum is especially important for campaigns -- whether it's UNICEF's Hallowe'en program or World Vision's City campaigns, the hum of excitement helps drive increased donations. The investment to create that hum is high and requires diligent efforts to bring key influencers alongside.
The web may be the most difficult to track. While the data available from web stats is unlimited -- the actual increase to overall donations may not be able to be directly traced to the web. We had one charity that received a large major gift because someone was looking for a place to donate and they found their web site particularly informative. That is a one off. We are much more likely to see people going to the web site to check out the credibility of an organization when they have seen a marketing piece. They often respond through the marketing piece, but the web has clinched the deal -- we can't track that.
The challenge for fund raisers today is that our job is, in fact, more difficult. We have more and more avenues to use to get our message out (I haven't even touched on social media, another day!) We know that auxiliary activities increase overall giving -- we just can't always tell by how much. Our gut tells us that if we would drop the other stuff and just do direct response materials, we have have an overall drop in donations.
Many fund raisers are revamping their language and moving from "integrated" marketing to brand direct. Basically, there is agreement amongst savvy fund raisers that brand, loyalty materials, press coverage and other communication activities contribute to brand which contribute to overall growth.
So how do we evaluate success?
Make sure you step back a little and assess key markers: increase in overall revenue (if you increased your investment by 1% you should see a 3-6% increase in revenue); increase in number of donors who have given in the past 18 months; increase in number of monthly donors (not all organizations are actively acquiring monthly donors); increase in number of press hits. Look at your seasonal activity. Can you see any trends in increased donations and do they coincide with increased marketing and communication. We often see an increase of hits and donations on the web site when the marketing and communications material is increased.
Remember that it's all about cause and effect -- if nothing changes, well, it's quite likely that nothing will change. Increased ROI is a team effort of integrated activities.