HPM in the Press & News

Get Fundraising Costs in Line with Results - 1185948900

Times are tough for professional fundraisers. Development officers at most colleges and universities are feeling the squeeze from rising costs and declining budgets.

To make matters worse, the reality of nonprofit fundraising is dwarfed by its poor image. Many alumni resist affiliation with their alma maters, hoping to duck appeals for money. Those that are open to giving want their generosity to benefit students directly, not pay for additional fundraising.

That usually isn’t the case with traditional direct-mail campaigns, in which the initial appeal is a loss leader serving merely to identify willing donors who can be approached again and again.

Zeroing In for Less

Finding those motivated donors – ones known to be interested in supporting your institution – is the key to lowering the cost of fundraising.

Thus, it makes more sense to adopt a strategy that starts with a low, stable cost to identify each motivated donor. Per-inquiry advertising (PI) – also known as cost-per-lead, pay-per-lead or cost-per-action – is a form of direct response marketing in which the advertiser receives free ad time and space and pays only for results. In return, the advertiser gives up control of where and when the ads will run.

Agencies that offer PI have relationships with media outlets – radio, television, print, Internet, movie screens and billboards – and access to their unsold inventory of ad time and space. The agency acquires the rights to the unsold time and/or space and places clients’ ads as it becomes available.

The advertisers pay only for qualified responses. What constitutes a response is negotiated between client and PI advertising agency. Packages can be structured for a variety of results: per inquiry (any response), per lead (name and contact information) – even per donation. The agency also can manage the plethora of toll-free numbers and dedicated Web addresses that make responses trackable.

PI appeals to organizations that would benefit from receiving qualified leads and want to establish stable costs per lead within their business plans. A PI agency can give them rock-solid numbers they can count on for lead generation in exchange for the flexibility in when and where the ads run. This approach is particularly suited to large, public institutions with high percentages of unaffiliated or loosely affiliated alumni within certain media markets.

Personal History

It was a nonprofit client that spurred my own interest in PI advertising. I was helping the group run radio advertising campaigns in the Southwest, buying local airtime in the traditional manner. The regional director was so pleased with the results we produced that he referred me to their national marketing manager, who offered me the chance to place national advertising but asked to pay per lead. The media companies we worked with were willing partners, accepting this client’s advertising on a pay-per-lead basis. The model has been so successful that we’ve applied it, with similar results, to several other nonprofit clients.

I’ve come to believe that colleges and universities really can benefit from pay-per-lead advertising. If an institution is going to spend money to generate donations, PI would be an ideal way for it to generate revenue with absolute certainty that it would not overspend to get the results.