What You Need to Know About Cashflow Right Now!

Cashflow is the lifeblood of fundraising programs.  Your programs are scheduled to maintain a certain amount of cashflow to be steadily coming in and making it possible to run your programs.  As you start to plan out your 2022 fundraising programs, we wanted to take a moment and draw attention to how the new first-class delivery standards could impact your cashflow expectations for the coming year.  

If you missed it, we published a great blog post on the new standards and how we will see them affect the mail.

As mailers we tend to look at how the mail is getting TO donors.  But today we are going to look at how the donations make their way back to you via the mail and what you can expect for the coming year.  Let’s start by asking a few questions and looking at the data:

• Where is your return mail being mailed to? (This may be your office or the caging company address)
• Where do your donors live? (Are there large concentrations of donors that live on the other side of the country from where your return mail is going?)
• What does your current response curve look like? (How many days do you currently expect it to take for donations to come in and how much cash are you expecting to be generated at each point in the curve?)

These three questions will help you determine the potential impact to your return mail and whether or not it will negatively affect your cashflow.  Once you know this, you can start to set your new cash flow expectations.  Let’s look at an example:

Let’s look at a nationwide mailer whose caging company is in Maryland.  While they have donors nationwide, there are 3 hot spots where there is a large density of donors: New York, Chicago and Los Angeles.  Based on the new delivery standards:

• New York mail should hit the caging company lockbox around the same time it has been – typically 1 – 3 days from the time the donor drops it in the mail.
• Chicago mail may hit the mailbox in a similar average number of days to New York, but you could see the average stretch to 2 – 4 days.
• Los Angeles mail will hit the caging company in the longest amount of time: averaging 4 – 5 days.

This means that a portion of your donations will come in a couple of days later than they have in past years.  How big of a portion will largely depend on the factors above: where your donors are located, where your return mail goes to, and how the USPS performs with the new standards.  If our caging company is in the middle of the country, donors from Florida, Maine, Southern California, and Washington may be in that outer band of deliveries.

What can you do now to be ready for this?

1. Plan for a longer than normal response curve. This may mean moving things out by a day or two to make sure that the current assumptions are being made (and if donations come in faster – even better!)
2. Move your mail dates up. If you are currently setting up your 2022 mail schedule, you can consider moving your maildates up by a day or two to combat any effects to your response curve.
3. Consider barcoding First Class reply mail. This helps the USPS process the mail with less additional handling!
4. One last option is to look at return mail tracking. Much like PS tracks your outgoing mail, we can also track incoming mail by adding a trackable barcode to the reply envelope.  This service will allow you to see approximate numbers of mailpieces that are coming to you as they come into the mail.