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To Rent, or Exchange – That Is the Question

As list brokers and list managers, we are faced with this dilemma on a daily basis. And to answer this question, we need to start with the most important and influential list to your direct mail program: your donor file.

Your file is not just a list of names and addresses of people who support your organization. It can give insight into the giving behavior and attributes of your donor or member. Do donors tend to come from a specific geographic area, are they responding to a particular package, or do they typically give during a certain time of year? These details come from tracking your donors’ responses and how they engage with your organization. When you know your donors on this detailed level, your file becomes an asset of knowledge to your organization. Understanding, utilizing, and protecting your file is key to your fundraising success. So, why should you share these names?

 

To Exchange

Depending on the economics of your program, exchanging or renting lists can make or break your mail plan. A list exchange is an agreement between two mailers to make their lists available to each other on an even-trade basis at no cost. This is the largest perk of exchange relationships. For example:

If you are running an acquisition program mailing 100,000 and you must rent all those names, you’re looking at a potential cost of $11,500. This assumes you:

  • mail all the names you receive
  • don’t have to over order per the merge purge
  • aren’t paying select fees
  • only order from 10 files
  • pay $90/m base, $50/f shipping, and $20/m non-reciprocal fee on each file received (a non-reciprocal fee is the penalty for not having a reciprocal file on the market)

That’s a lot of assumptions, we know. And, if you’re able to meet your monthly campaign goals by utilizing only exchange files and exclude the nominal exchange fee typically associated with the broker exchanging for the client, that’s an annual savings of $138,000! Imagine how many more prospects you could reach if you hadn’t spent all that money on renting mail files.

This savings will lower your cost to acquire and free up funds to possibly test other packages or mail more.

List exchanges also offer an opportunity to create a reciprocal relationship with other local organizations in your community or within your vertical. These relationships can be specific to your target geographic area or with national nonprofits, selecting zip codes, SCFs, or states based on your mail plan. Many nonprofit organizations prefer to only exchange their file, so these relationships may provide a new universe of names you wouldn’t have been able to access on rental. Your list broker understands that the importance of a list exchange goes beyond whether we’re approved or denied, it’s about being a representative of your organization and building long-term partnerships.

 

To Rent

If you determine exchange relationships aren’t in the best interest of your fundraising program or you want to create an additional revenue stream, a secondary option is to make your file available for rental. While you will not receive the perk of lower acquisition costs through rental, there is the opportunity to increase the revenue you’re bringing to your organization.

To begin the process of renting your donor or member file, it’s important to take the pulse of the vertical your organization is in so you can properly price your file. Generally, most fundraising files are on the market for a base rate of $85–$95 per thousand names.

  • The list owner typically receives 70% of the base rate cost (20% to the list broker and 10% to the list manager), so if your file receives an order quantity of 100,000 names per year, you’ve increased your annual revenue by about $6,000. Your list manager will market your file through email promotions and make the datacard accessible through an online list database, so your revenue will only go up!

If you’ve kept a clean database (a topic we will follow up on in a later blog post), you might also be able to offer the option of geographic or demographic selections. These “selects” can range from $5 per thousand to $25 per thousand, which would be in addition to the base rate.

Similar to putting your names on the marketplace for exchange, there is a certain level of visibility you’ll now have. This is a double-edged sword—it’s great because you’re adding an income source by renting your file, but you’ll also want to make sure the list continues to perform for the mailers using your file. This means maintaining the integrity of your file through regular contribution updates, NCOA, and DMA pander of the names you’re offering. Once your names stop working for mailers, it becomes increasingly harder to convince them to come back in to use your file. It’s also important to protect your file, so your donors and members continue to give and engage with your organization. You can do this through blocking out mail dates that are vital to your fundraising program and denying an organization that has a similar package or is too competitive.

 

So, what to do?

And the answer is: Do what is in the best interest of your organization.

Maybe you still have some questions about whether exchanging or renting is best for your organization or if opening your donor file for exchange is the right thing to do. You might be thinking that your donors are unique to your organization or that you’ll dilute the effectiveness of your own appeals by sharing your names with others. According to Blackbaud’s Cooperative Profile Report, the average donor gives to 7.3 different nonprofits, so we know these donors are getting mail from a variety of organizations. Since these names are already on the market, you can only benefit from exchanging or renting your current donor file. In our experience, exchanging or renting your list doesn’t hurt your promotional efforts—it helps. If it was detrimental, then no one would do it. 

 

With the understanding of what an organization stands to gain from putting their donor or member file on the market, what’s stopping you? If you’d like to start a dialogue about best practices for managing exchange or rental files, feel free to reach out to dhardy@nflists.com and one of our dedicated team members will be in touch shortly