THE IMPACT OF MAIL ORDER ON SUBSEQUENT DONATIONS: AN EXPERIMENT Pierre Desmet* INTRODUCTION The charity sector is characterised by non profit organisations (associations or foundations), by a field of activity (such as international cooperation, a social objective, or medical research) and by non-commercial funding (contributions, donations, subsidies, dues) (Ralet, 1994). The Foundation of France has estimated the funding level to be at 14.3 billion FF ($2.4 billion US) for this country in 1993, an increase of more than 50% from 1990 to 1993. To fulfill their mission, charities traditionally function with a group of volunteers (inside base), who are either performing a job related to the mission (education, medicine) or they are collecting money from donors (outside base) on canvassing or event campaigns, while usually being donors themselves. Charitable organisations have to deal with two tendencies: first, development implied by the success of the mission increases financial needs; second, there is a decrease in volunteers for door-to-door canvassing. This then requires more and more public fund raising and leads to the necessity, reinforced by public action, of having more professional workers taking the place of volunteers inside the organisation and results in a more rigorous managerial approach. The use of professional management and marketing approaches has profoundly changed this area over the past ten years (Shapiro, 1973). For marketing purposes, professional directors have intensively used relationship marketing to manage their program for large contributors, in addition to database marketing to identify small donors and enlist their loyalty (Cermak, File and Prince, 1994). These direct marketing techniques, often combined with professional services, are being provided by mail order companies. As a consequence, another tendency is the increasing difficulty in raising more money by direct marketing and decreasing returns due to a more competitive marketplace, paralleled by a decrease in the average amount per contribution. So, naturally, managers not only use direct mail but also tend to use other mail order techniques, such as mail order catalogues. Other means Financial Accountability & Management,14(3), August 1998, 0267-4424 ßBlackwell Publishers Ltd. 1998, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA. 203 * The author is a Professor at the University of Paris IX-Dauphine and ESSEC. Address for correspondence: Pierre Desmet 20, Les clairie© res rouges, 95000 Cergy-Pontoise, France. e-mail: desmet@dauphine.fr/p_desmet@edu.essec.fr