Steve Thomas is Chairman and Executive Creative Director of the company he founded in 1980, Stephen Thomas Ltd. A fundraiser for over 40 years, he is often described as the ‘Guru’ of Canadian direct response fundraising. His firm was Canada’s first direct response fundraising agency working exclusively in the not-for-profit sector.
For a few years, beginning in 1989, KMA’s Larry Matthews wrote direct mail packages for STA on a freelance basis and came to respect the professionalism and commitment to excellence of the company and Stephen’s passion for social justice and human rights.
LM: In the past, direct response raised substantial sums of money. Is the way we measure success changing in direct response?
Stephen: Well direct mail is still big for charities. Direct mail is still important for a lot of our clients. But the traditional direct mail donor is getting awfully long in the tooth. My 96-year-old dad still gives through direct mail.
The greatest thing that direct mail did was begin moving people to monthly giving-- monthly giving is now paramount and produces the greatest amount of net money. And many monthly donors came through mail and telephone.
LM: Your work has been entirely about getting people to act – I think of you as Canada’s original “call-to-action” figure. What moves donors now? Have donors’ motivations changed over the last 30 years?
Stephen: All the research says that they have. My parents’ generation figured that the Canadian Cancer Society was there to beat cancer, and so you supported it.
Younger people are a bit more skeptical, and don't automatically give to traditional organizations that are considered “good” like The Canadian Cancer Society or the Heart and Stroke Foundation. And quite often young people want to be more involved, which presents new challenges.
Today, donors are still interested in beating cancer, but there's much more choice for the donor – now there are many different cancer charities which means more competition for each charity.
LM: There are also new channels for giving. How do you integrate them for the donor?
Stephen: The donors are already integrated. I'll use an example from my own life that isn't fundraising. I buy clothes from the Lands End catalog. They send me a paper catalogue and I go through it when I want to buy some clothes. On occasion I have also looked at the web site, because the web has a greater range of choices. But when it comes time to order, I still phone. The paper catalog, the website and telemarketing are all involved in getting my sale.
Neil Gallaiford (President and CEO of Stephen Thomas Ltd.) did a big study on this for MSF (Médecins Sans Frontières/Doctors Without Borders). Even among people that came to MSF online first, when sent direct mail, a certain percentage responded by mail. There used to be this idea that you were a digital donor, a direct mail donor, a telemarketing donor etc., but that's not really believed any more .
LM: A donor doesn’t belong to a medium?
Stephen: No. But a donor may have a preference.
We did a lot of research with MSF about responses to appeals during the Haiti earthquake and we found that when the disaster occurred, a group of donors, who ostensibly were “direct mail donors,” went online and made a special donation. But later they migrated back to direct mail for their annual donations.
LM: Were they asked by MSF to make a donation and so went online?
Stephen: There were several days when they hadn't been asked yet and they still made online donations. Of their own volition, in the first 72 hours they went to the website before MSF had a chance to approach them.
LM: So they saw online giving as more immediate, more responsive?
Stephen: Yes. We know from MSF that every time we sent out a mailing we would drive a bunch of people to the website. Younger people aren't so comfortable writing out cheques but a piece of information that lands on their doorstep is still harder to ignore than an email.
LM: What’s happening with average gift sizes? Does online giving make any difference?
Stephen: Well the general trend is that gift sizes are larger. But it depends on the client. I mean a client like MSF, through direct mail, gets a $105 average, but online it may be $200 or something like that. Whereas cancer appeals still generate $35 - $40.
LM: What about mobile giving? Are people using mobile platforms to make donations?
Stephen: No, because of the regulations here in Canada. In Australia and Europe it's fantastic. But here you can't get the names and that's what you want - you want to establish a relationship. There's a group of high-profile fundraisers working on this issue to try to get things changed in Canada because, well, even I use this old BlackBerry to go online more and look up things.
LM: Do you have a sense of how well charities are doing relating to say the younger, particularly the under-35 donor? It seems to be a bit of a mystery of how to engage people.
Stephen: I think the way to engage people, for the most part, is to get them involved.
LM: What do you mean by involvement?
Stephen: In events. For 15 years, a woman that used to work here – she now works at a hospital in Hamilton - has walked in the MS walk because it affected a family member, and she raises a couple thousand dollars each year. She's really proud of this.
I asked her once if she ever made direct mail donations to MS and she said no. “I do the walk. That’s how I help.” In the past, so much time was spent trying to convert people like her into direct mail donors or monthly donors. That’s been shown to be a waste of time. She has a relationship: her relationship is going on that walk and raising a substantial amount of money. She's raising $2,000 or more every year. Why trade that for a $20 or $30 monthly donation?
Back when I started we’d say that special events were a waste of time except maybe for morale and so on but now (with digital and web based engagement) the ability to draw in others has gone to a whole new level.
LM: Two years ago you published a book, a 30-year retrospective of your company’s world called “30 Letters that Changed the World.”
Stephen: For the 30th year, rather than just write a history of the company, "we did this, we did this, we did this..." I decided to write about 30 different packages, 30 different clients.
LM: It’s a pretty interesting read – lots of glimpses of various years and inside campaigns and organizations. But there’s a lot more to your company now than mail.
Stephen: Well, direct mail is still a pretty big part of what we do, but now we also do digital fundraising, branding, consulting, social marketing, data work. We do some work that's not fundraising at all. For the Arthritis Society, we did a big online campaign that was trying to get people to learn more about sugar, how detrimental sugar is.
LM: And charities are not making the same long-term commitments to their suppliers.
Stephen: In the past we signed a contract for a number of years, and carried out a direct mail program. That still happens with organizations like MSF but we do an awful lot more of single jobs. We did the planned giving website for the Salvation Army. We did the digital newsletter for SickKids. You have to be more nimble now.
In the book I concentrated exclusively on direct mail because that was the history of the firm. If Neil writes a book down the road, it will be much different.
LM: You seemed to have pulled off a successful transition in the business – you’re heavily involved but Neil is CEO.
Stephen: I think my wife Mary (Attfield) and I managed the transition really well. It took us about five years to persuade Neil to come and be involved with us and take over as President. He came with the mandate to change the firm; to make it work with the times. He’s done a great job for the seven years since and because of that we continue to do good work for all sorts of good organizations. And that makes me happy.