Does including a business reply or pre-stamped envelope in your appeal letter improve direct mail fundraising results?
Most donors still like to send checks rather than give online
According to our data, the percentage of donors writing checks and returning them in the mail versus going online to make the donation exceeds 75%.
This is likely because the average donor is in their mid-sixties, and almost all donors are older than 40. (You can check out the distribution of donor ages in another one of our articles: Typography Best Practice for Fundraising.)
Another reason is that, since the largest percentage of charitable donations come in response to direct mail, the process of learning about the need and deciding to make a donation is already paper-based.
These folks have checkbooks, and they almost always have some stamps handy. Writing a check isn’t an inconvenience and has that satisfying physical feel to it.
So, a question sometimes asked by fundraisers is:
“Should we provide the donor with a business reply envelope so they don’t have to put a stamp on the reply envelope?”
What is a BRE?
As you may know:
A Business Reply Envelope (BRE), in addition to your organization’s return address, has a special bar code and permit pre-printed on it. This tells the post office that you, the nonprofit, will pay the postage for that return envelope. To use a BRE, you have to pay to have a BRE account with the post office and they send you a postage bill for the ones that donors returned in the mail. If you are interested in learning more about this, you can do so on the USPS BRE web page.
A Courtesy Reply Envelope (CRE) just has your return address on it, and typically a “please put stamp here” box in the upper right corner.Due to the cost involved, few nonprofits use a BRE in fundraising appeals.
But, what if donors were more likely to return a gift if they didn’t have to put a stamp on the reply envelope? Wouldn’t including a BRE rather than a CRE be a smart move?
Research shows a BRE doesn’t raise more money
I’m happy to share that direct mail guru Mal Warwick reports on 12 tests of BRE versus CRE in his book about testing direct mail.*
In only two out of the twelve tests, the response rate showed an improvement, reaching confidence levels of 90% and 92% - just on the edge of statistical significance. But the difference in amount raised was minimal, making the extra cost of paying for the return postage an unnecessary expense.
So, our view is, it isn’t worth doing and isn’t even worth testing.
What about adding a live stamp to the reply envelope?
One other question that comes up at time:
“Should we put a live stamp on the reply envelope so the donor doesn’t have to? Will that increase the return rate? Will the donor feel a little more obligated to return a gift because we spent the money to add a stamp?”
Here are three reasons why you shouldn’t do this:
We’ve reported above that providing the donor with a BRE doesn’t increase response rates. So, ask yourself – why would a stamp work?
The typical response rate to a donor renewal mailing is in the 5% range. This means you have to provide 20 stamps for every reply envelope that gets returned, or around $16 per reply. For an acquisition mailing with much lower response rates the cost would increase by 5 to 10 times. The donations you get will be eaten up by the costs of the stamps.
Mal Warwick refers to only one live stamp test in his book and the response rate did improve. But the cost still outweighed the additional amount raised.
Maybe a live stamp on the reply envelope is a good idea for larger donors?
Jeff Brooks, another direct mail guru we often cite, confirms that “[…]BREs and CREs perform about the same.” On the other hand, Jeff reports that “[by] putting first-class stamps on the return envelope, you increase response [but] it’s an expensive thing to do. […]For upper-end donors, it’s a no-brainer…but for the rest of your donors, that cost outweighs the improvement in response.” Jeff recommends adding a live stamp for appeals to $100 plus donors; you can find more of his thoughts in the blog post, Use Postage to Maximize Impact in Direct Mail Fundraising.
But putting stamps on some and not other reply envelopes – because it changes the production steps – turns one mailing into two mailings, increasing the overall cost of processing in addition to the supplementary stamp costs. For most non-profits, mailing numbers are far smaller than for the large organizations Warwick and Brooks tested, and the cost would far outweigh the improvement in dollars raised.
Letters with personal notes might be the exception
We often prepare appeal letters that we return to the client’s office for personal signatures and notes, which are then mailed from the client’s office. (We refer to these as RTC, or Return to Client, segments).
Most organizations have found those personal notes make a difference in response. Maybe adding a stamp to the reply envelope would improve the response to the RTC just a little bit more? These RTC mailings are always small, usually a little more than 100 letters – too small to run an A/B test.
For 100 letters, the cost for those stamps would be $66.00. If the convenience of not having to find a stamp meant one more donor out of 100 returned a gift, that would more than pay for the stamp cost, since the average gift in response to these mailings with personal notes is over $500 **. So maybe Jeff is right, and it is worth trying.
*Warwick, Mal, Testing, Testing, 1,2,3: Raise More Money with Direct Mail Tests, Jossey-Bass, 2003
**See the table Appeal Letter Mailing First Class With Handwritten Notes in our blog post Insights from Mailing Analysis will Improve Your Fundraising Results
