One point that is quickly made in this comparison is the cost (literally and environmentally) of creating and sending direct mail versus sending email: paper, postage, etc. But in a medium where a 0.1% increase in returns is considered good success, and where acquisition of new donors costs more than the corresponding donations we have to take a closer look at alternative methods of fundraising. In many cases nonprofits have shaped communications structures on their outreach methods versus the content, setting the cart before the horse. Introducing email fundraising using direct mail methods is a recipe for trouble.

Email fundraising response rates run at a similar rate to direct mail, around 0.12%. And while 2008, especially in the fourth quarter, was difficult all around, the number of gifts increased by 43% over the previous year. Email list growth, while again down from 2007, was up 17%.

While direct mail is still effective, especially with recipients who are move comfortable in that medium or otherwise take it more seriously than email appeals, it is clear that email appeals can be quite effective as well. As time goes on it is most likely that things will only improve on that front as recipients become more comfortable, lists improve, and organizations become more and more adept at crafting their message for this medium.

Nonprofit Online News: http://news.gilbert.org/DirectMailAddiction
NTEN eNonprofit benchmark study: http://www.nten.org/research/benchmarks
ROI (return on interest) calculator: http://www.emaillabs.com/tools/roi-calculator.html