Newspapers are cutting out marginal circulation due to the rising cost of solicitation and delivery. Charities should take note.
An article in the New York Times caught my eye: Why Big Newspapers Applaud Some Declines in Circulation (Richard Pérez-Peña). It offered an astounding statistic that the cost of acquiring a new subscription had increased to $68 in 2006, which is more than double the cost just four years ago, according to the Newspaper Association of America (business league EIN 13-0433220 Form 990). The increase cost is due to do-not-call regulations and the fact that many individuals use cell phones, which telemarketers can't call.
Accordingly, newspapers are cutting back on promotions and allowing their circulation to drop. Advertisers are coming to accept that a smaller circulation can be better. The New York Times is holding relatively steady in circulation, but that's only because declines in New York City have been offset by increases in other cities, where the newspaper reaches a more affluent audience.
This is a legitimate strategy for a newspaper, which can derive revenue either from subscriptions or advertising. But for charities, the decline in effectiveness of direct response methods has a direct impact on fundraising that can't be so easily offset.
So are charities experiencing similar trends? There's not much in the way of direct reporting, but I think so. Last fall, the Chronicle of Philanthropy (Holly Hall) identified the same types of issues (The Vanishing Donor, 11/26/2006). Donor churn (from donors who give just once) is on the rise and the article offers evidence that traditional solicitation methods to encourage repeat donations are increasingly ineffective.
I also found an article from Professional Fundraising (UK) (but only via Google cache) reporting that fundraising by mail (in the UK) is showing declining response rates and offers a case study of an organization where direct mail has dropped from third to fifth as a method for attracting new donors.
Yet I wonder: if technological change (like widespread cellphone use) is having such a huge impact on commercial marketing, it seems that there should be a corresponding trend for charities in the US. I find the lack of reporting on this in the US to be curious.