A Veteran Direct-Marketing Fund Raiser's Bright View of the Future

When Max Hart began work at the Disabled American Veterans in 1969, the organization was best known for the gifts it included in its mailed fund-raising appeals -- miniature license plates for motorists' key rings that were personalized to match the tags on each recipient's car.

The I-dento Tags, as the trinkets were called, had been helping the Cold Spring, Ky., organization bring in the money it needed for nearly 20 years. But by the end of the 1960s, donations were starting to slip. A growing number of states allowed motorists to keep the same plate numbers year after year, which made getting a new I-dento Tag each year a less appealing offer. Also, notes Mr. Hart -- who retired as head of the group's direct-mail fund-raising efforts in December -- Disabled American Veterans wasn't doing much to build loyalty among previous donors. The organization wasn't even keeping track of people who gave money, he says.

"They'd make the mailing, and then simply shred the list," says Mr. Hart, 70. "Year after year they just were blindly sending out millions of I-dento Tags."

During Mr. Hart's tenure of more than 30 years at Disabled American Veterans, that changed.

By 1975, the group had given up I-dento Tags altogether, in favor of incentives that were aimed at specific types of likely donors and were cheaper to produce. Mr. Hart and his colleagues kept detailed donor files, regularly tested all kinds of mailings, and assiduously studied what appeals produced the most-generous donations.

Mr. Hart oversaw a direct-mail operation during his years at the organization that garnered more than $1.8-billion in donations from millions of donors, accounting for nearly all of the gifts the group received each year. Along the way, he helped introduce his organization and other nonprofit groups around the country to the increasingly sophisticated world of direct marketing.

Among the many awards and distinctions he earned throughout his career, Mr. Hart treasures one the most: his induction into the Direct Marketing Association's Hall of Fame, in 2000. Of the hall's 80 members, such as Leon L. (L.L.) Bean, Lillian Vernon, and Aaron Montgomery Ward, Mr. Hart is the only person who has plied the direct-marketing trade at a nonprofit organization.

Disabled American Veterans, founded in 1920, provides services and support to the nation's more than two million disabled veterans and their families. The organization offers benefits counseling, for example, and free transportation to health-care facilities. The group also lobbies for legislation beneficial to disabled veterans.

Mr. Hart, who served two years in the United States Army, and then after college worked 11 years for two for-profit companies, says he wasn't sure at first if working at a charity was a good fit for him. He spent his first year at Disabled American Veterans looking for a new job, he says, before finally settling in. He says he found that "direct mail was direct mail no matter where you are," and that he deeply appreciated the organization's mission.

In an interview, Mr. Hart spoke about Disabled American Veterans and the direct-mail industry.

Why does Disabled American Veterans rely on direct mail?

We've never been able to make anything else work. We've taken stabs at things over the years. Back in the early days, before my time, they tried door-to-door. Telemarketing, by choice, we've never done. We have a strong negative bias against it, don't like it, and I think that policy of not having telemarketing has served us well over the years.

We've never solicited government money. We don't want it. We wouldn't take it if they offered, because there are just too many strings to it, and we don't want to be obligated to the federal government because in some ways we are in an adversarial position when it comes to benefits for disabled veterans and health care for the disabled veterans and their dependents.

What's the biggest challenge the direct-marketing industry will face in the near future?

I've always thought, going back years and years, that privacy is the greatest challenge we face, and will continue to face. It is an area that could literally put us out of business.

What is the privacy issue all about?

The crux of the issue is that if the direct-marketing industry were required to obtain positive consent from the individual in order to mail them -- what is known as opt-in -- it would just kill us. If we had to obtain permission to solicit the individual or to provide their name to other organizations, most people would not opt-in. It would be like saying, Do you want more fund raising? And naturally the answer to that would be No. Donor files, which are our most-productive lists, would quickly dry up, and as those universes dried up, attrition would take our files down, and we would not have the new donor input to maintain the levels we have today, and that would very quickly put us out of business.

How has the industry responded to the threat of this kind of requirement?

Up through the '80s, there was no question that nonprofits were operating in such a way that many of us feared there would be legislation. But more recently, in part due to the focus on privacy because of the Internet and telemarketing, more and more nonprofits have been doing business differently to address privacy concerns. They have disclosure policies and statements that let donors know that they can ask not to be solicited or to have their names taken off lists.

Is direct marketing all about statistics?

The data, and the statistics, and the models let you get very close to knowing what is going to happen with a mailing. There's no question you have to understand the numbers. But the statistics and the information reports need to be an extension of your mind and body. You have to have a feel for what is going to work.

What do you see as the future of direct-mail appeals?

Direct-mail fund raising continues to have a bright future. For DAV, it has to, since it's the only medium we have to sustain our service programs. But I'm optimistic about direct-mail fund raising in general, too. The down period we have seen in recent years, in 2001 especially, came about because of the economy, not because there was anything wrong with direct mail as a viable fund-raising vehicle. As the economy comes back, as consumer confidence improves, as expendable and discretionary income increases, direct-mail fund raising will continue on the upswing. Naturally, you will have blips, but direct-mail fund raising works, and it will continue to.

Will online solicitations take the place of postal mail one day?

During the dot-com explosion, until the Internet economy tanked, we all -- the nonprofits -- were very optimistic about online fund raising. We thought it would be this great panacea, and we all struggled to find out how to make it work. We found out that it wasn't going to be the answer to our funding needs, at least not yet.

How much does the veterans' group get from online donations?

We see about a quarter of a million a year. I had hoped early on that it would be in the millions. At this point, though, our direct mail actually drives our results on the Internet. If we have mail out there, Internet contributions are up. If there was no direct mail, we'd be doing even less on the Internet. There is some marginal additional revenue we never would have gained in that quarter million, but not the kind of money we had hoped the Internet would bring.

ABOUT MAX HART, OUTGOING DIRECT-MAILFUND RAISER, DISABLED AMERICAN VETERANS

Education: Earned bachelor's degree in business administration at Ohio State University.

Previous work experience: Before his 34 years at Disabled American Veterans, Mr. Hart worked for two years in marketing at Procter & Gamble, and for nine years in administrative and management positions at R.L. Polk & Company, a consumer-marketing company that specializes in the car industry.

What he's reading: After recently giving away all his books about direct marketing, Mr. Hart says he's now reading Bill O'Reilly's, Who's Looking Out for You?

Alternative profession he might have chosen: Airline pilot.