Why Going Digital Might Not Save Your Annual Report

In February 2011, The Chronicle of Philanthropy published a story that tracked the nascent rise of the digital annual report.

The Salvation Army (USA) had found that “about half” its printed annual reports went wasted: found no audience; were literally never opened. So “it decided to scrap the hard-copy version, moving to an all-digital one.”

You can almost hear the conclusion at headquarters: “Print isn’t working. Let’s go with digital instead.” And a digital version certainly has advantages:

• It’s conveniently available at the click of a mouse, 24 hours a day.
• It can offer lively entertainment. In this one, videos, professionally shot and edited, take the viewer on a journey into the actual neighborhoods where the Salvation Army does its difficult work.
• And even the messages from the director and board chair (customarily, the “Death Valley equivalent” in printed annual reports) are compelling when spoken on-screen, under dramatic lighting, with a musical soundtrack and Hollywood production values. Imagine your executive director acting in The Da Vinci Code; that’s what it looks and sounds like.

I wonder, though. Is this merely a “half empty/half full” conundrum?

If half the annual reports were never opened, then half WERE opened, after all.

And, unlike online video, you never know where a physical copy of your annual report might end up.

Let me tell you a real-life story. A couple of years ago, an attorney phoned this community foundation I know. He had very good news: the foundation would soon receive a multi-million-dollar gift from a man who had died without heirs.

Of course, the foundation was delighted. But puzzled, too: they’d never heard of their benefactor.

“How did he even know us?” the gift officer asked. The attorney replied, “Well, I happened to have your annual report on the coffee table in my reception area. He came in for an appointment and got to reading.”

So I have two questions for The Salvation Army (USA). One: Was it really print that failed? Two: Is it really an either/or situation?

One of the first seriously wrong conclusions about donor communications I ever heard was this: “We tried direct mail,” said the executive director of a small nonprofit. “And it didn’t work for us.” I accepted her assessment. Back then, I didn’t know any better. But as I armored up with training over the years, I learned to be more analytical:

• Was her direct mail piece any good to begin with? No, probably not.
• Was her mailing list well selected to begin with? No, probably not.
• Were the results, therefore, lousy? Yes, predictably so. Direct mail fundraising is a gladiatorial arena where only the well-trained survive.

Lesson learned: If you know nothing about direct mail, do not expect to succeed in that particular hard-to-get-right, easy-to-get-wrong medium.

Lesson extended: If your annual report isn’t getting read, don’t necessarily blame the reader or the medium. Look in the mirror first: Are you doing this well?

Even smart organizations (and the Salvation Army USA is a very smart organization when it hires donor communications vendors for things like direct mail) get clumsy when it comes time to do a printed annual report.

Takeaway

Boring and risk-free simply do NOT work in marketing. Ever. There are neuroscience reasons why that is, but I won’t get into those today.

Just keep this in mind: fundraising is a type of marketing. Fundraising must obey the very same psychological principles of persuasion that marketing must obey. Brains are brains. Being a donor may grant you an honorary halo, but it does not change your neural network.

What boring is is safe. Choosing to be safe is the professional equivalent of throwing in the towel. Safe donor communications will NOT raise as much money. But then no one above you is likely to know that’s the case. So if you do choose to be safe, this is one of those spanking great times when the ignorance of your boss and board (re: how donor communications really work) will help you. They also like — oh, come on: they love — safe, too.

Even though it doesn’t work. Guaranteed.

This post originally appeared in the Ahern Donor Communications newsletter.

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