How the Data Revolution Has Impacted Caging and Lockbox Services
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Dennis Hoffman is the founder and CEO of Engage USA, a leading lockbox, database marketing, and analytics company specializing in nonprofit fundraising. In addition to serving as the founder and CEO of Engage USA, Dennis owns District East, a retail store specializing in rare, local, and hard-to-find beers.
Dennis has been featured on Good Morning America, The Wall Street Journal, and has helped two United States Presidents run successful fundraisers. He is also a member of the Baltimore Chapter of the Entrepreneurs’ Organization and serves as the Global Recruitment Subcommittee Chair.
Here’s a glimpse of what you’ll learn:
Dennis Hoffman discusses his past work with nonprofit agencies and what sparked his passion to provide accurate data and more profitable fundraising information
Dennis discusses the impact of his new company, how he started his lockbox business, and what that meant
Moving forward to 2005, Dennis speaks about the growth of his business at Engage USA and using OCR for accuracy
How does accurate data translate to a more effective fundraiser?
In this episode…
Are you looking to optimize efficiency and profitability fundraising? What if there was a way to reach clients quickly and accurately?
Getting the most out of your fundraiser is the goal. According to Dennis Hoffman, having the most transparent reporting in the industry, providing clients with customized reports, electronic processing, fast depositing, and clearer insight into your donor base is crucial for providing expert services and maximizing fundraising efforts.
In this episode of Greater Returns: A Fundraising Podcast, Dennis Hoffman, a fundraiser at heart and the Founder and CEO of Engage USA, talks with John Corcoran about what it means to deliver personalized and transparent expert caging and commercial lockbox services. His obsession with clean data has the biggest impact with providing expert client and donor services. Break out of your old cage and get the lockdown on running a more successful fundraiser. Stay tuned!
Resources Mentioned in this episode
Email the team at Engage USA: info@engageusa.com
Sponsor for this episode...
This episode is brought to you by Engage USA.
At Engage USA, we maximize direct mail fundraising efforts for nonprofit and charitable organizations by streamlining processes, providing obsessively accurate data, and delivering personalized and transparent expert caging and commercial lockbox services.
We pride ourselves on being quick to respond to customers. Our systems capture, verify, and balance data in real-time, allowing us to provide our clients with obsessively accurate data and deposits within 24 hours. At Engage USA, we help nonprofits, charities, and political campaigns run more successful fundraising efforts.
So what are you waiting for?
Visit engageusa.com to learn more about our work or contact us today!
Episode Transcript:
Intro 0:00
Welcome to the Greater Returns podcast, where we talk about nonprofit fundraising analytics and how to get better every day. Now, let's get started with the show.
Dennis Hoffman 0:14
Dennis Hoffman here, I'm the host of Greater Returns: A Fundraising Podcast, where I talk with nonprofit leaders about marketing, direct mail and analytics. I have John Corcoran with me from Rise25. John has done 1000s of interviews, interviews with successful entrepreneurs, investors and CEOs. we flipped the script today and he will be interviewing me.
John Corcoran 0:35
Alright, Dennis, thanks so much for having me. It's an honor to be here. And in this episode, we're going to be talking about the kind of the origin of the industry and expert caging and lockbox services and how access to data and greater availability of data and many different tools around that has has really allowed the industry to evolve and it has a big impact on fundraising. But first before we get into that this episode is brought to you by Engage USA and Engage USA provides extra caging and lockbox services to help organizations meet their unique fundraising needs and their proprietary systems capture, verify and balance data in real time allowing them to provide clients with obsessively accurate data and deposits within 24 hours state and national charities, advocacy organizations and political candidates count and Engage USA to help their fundraising campaigns become more successful. So what are you waiting for? Visit EngageUSA.com or you can also email, Engage info@engageusa.com to learn more. Alright, so Dennis, no, take us back to the late 1990s. You are running an agency, you're raising money for nonprofit organizations, data came not very frequently there's no cloud based software or anything like that, at this point in time. You know, you didn't have great access to the data. And you had kind of this pivotal moment, this turning point where you got some data for a client, you realized this needs to be solved. So take us back to that what happened?
Dennis Hoffman 2:06
Absolutely. John, I own an agency that work with small nonprofit organizations. And we worked with a large national database group that's still around, some of these people watching this podcast, probably worked with them. And I never seen the data data came on these big things called mag tapes. And they you know, and there's a story about richard viguerie, it was a pioneer in this industry, holding a mag tape up to the light and trying to read it. He couldn't see anything. It was kind of like like you holding a CD up to the light, you can read that in 1999. I, the technologies, the point where I could open and one of our files on my Macintosh computer. And I and I did I opened it up. I don't know whether it was Excel or you said maybe Lotus 123. I don't know what program I used it was. But I opened it up and I looked at the data. And I was mortified. We had well my analysis. And I didn't have the tools to a good analysis. But I found eight and a half percent duplicates on that list. I found people whose names were obviously spelled wrong, I found errors in street names do some one lady was on the list 11 times. And that was a list that was getting she was getting their clients fundraising mailings that way. So So I call it the computer house we worked with and said, I can't believe this, you should look at this. And I was alerting them to an issue that I thought would upset them as much as they sent me. I mean, they were professionals, right, just like I expected they would care about what they did. And the young woman we worked with said, Dennis, eight and a half percent isn't that bad. I mean, industry standard is 5%.
John Corcoran 3:55
Incredibly, was incredibly frustrating for you. I mean, here, you're trying to do your best for your clients. You're trying to help them to raise money, you know, you're doing your best to squeeze out, you know, little differences impacts, which could have a big impact for these for these nonprofits. And to see the that kind of massive differential was it incredibly frustrating for you.
Dennis Hoffman 4:19
So, so John fund, fundraising is expensive. And we work really hard to make it less expensive. But the truth is the the the profits for fundraising campaign, the money that actually runs a nonprofit is, is what's left over after the cost of fundraising. And when I looked at the fact that in industry standard, we were spending an extra that we were spending an extra 5% on wasted wasted mailings. And more than that, you can guess the people who got two or three or 11 mailings. Also, in addition to not initially wasted money in that mailing, we're less likely to give too The first million they got. So the amount that it was costing my clients was was ridiculous. And I decided that I could probably have a bigger impact on my clients fundraising by fixing their data problems than I could by tweaking their fundraising packages, which is what I had spent most of my career until that point, Joey. And I decided to, to make a change. First, I tried to find out the data house that would work with small nonprofits and do it well. And at that point, it was the late 90s, technology was getting a lot better there were there. And I was convinced I could find somebody but my clients was small enough that they couldn't make the minimum set at most agencies and most, most data houses. So I decided to start my own. And I ordered a class on CDs, I would come in and I would sit and watch the CD and learn how to write some code. And I would write the code, I used FileMaker for our original database. And, and I slowly built a small data warehouse and brought my first client into it. And
John Corcoran 6:22
I'm impacted, you start to see when you started to manage it in house, so to speak with this new business.
Dennis Hoffman 6:29
It was really kind of shocking. So we had no analytics, we I mean, I was doing analytics in a more primitive way than I had ever had before. Because my you know, because I was I was a programmer, I didn't know how to write MC report. I didn't know how to do anything. But what I did know how to do is pay attention to detail and pay attention and make sure that that that that donors were well cared for that we went in with that their addresses were right, their names, right, and that they there were no, there were no duplicates. And that and and what that meant is my clients saw an increase in response rate right away. The big issue I had is we were still working with outside lockboxes, the people who captured the data was still sending me bad data and I was spending at this point, I did it all by hand myself and I was spending huge amounts of time cleaning their data. So if I correct your name once and it comes in wrong again, and I then I have to then I'm going to have to make that correction again before I merge the records. Right. And I decided I wanted to control the data capture, you realize you had to kind of go upstream. I want Yep, one of the and that's how we got into the lockbox business and the lockbox business for us has grown into something that I'm pretty proud of.
John Corcoran 7:56
So you start to Engage you say launches about 2000, you had four business partners initially in 2005, you realise it was time to you weren't full time, but you decided to go full time to talk a little bit about what, you know, what was the aha moment? Was it that technology had evolved at that point that it was better, but what led to that decision to go full time?
Dennis Hoffman 8:18
Sure. So in 2005, I sold my show the agency to my employees, and my business partner, and I came over to Engage, Engage full time, my business partner Kathleen Clem was here at that point, and she is still my partner. And and what what happened is it is I all the things that I believed about getting about taking data seriously. Were working. And I looked at this business and I said, I'm I found that a whole lot more exciting than the business that I've been in for 15 years at that point.
John Corcoran 8:59
Hmm. And so talk a little about that, that app for that point going forward. 2005 what sorts of impacts you started to see for clients, especially as new you know, tools came online and as you know, the internet started to evolve and there was access to greater amounts of data.
Dennis Hoffman 9:23
So when I when I came to Engage full time, we had so 40,000 square feet of paper storage. We had an n rows and rows of people kind of like in a school opening, opening mail. The and it it was a it was a time intensive, slow, painful business. And a lot of lockboxes are still still like that. What we did over the years is, is adopt technology. The way it works now is we have high speed scanners, we have high speed extractors and open the mail presented to an operator who drops onto a scan scan bed. And it goes through a high speed scanner. And then we use OCR to, to read the read the optical character compare optical Yeah. So OCR will, will agree to read the client's data and look for two comparison points. So we're gonna, if we find your name is John, we're going to make sure we find your name is John twice, so that we know it's right. If we don't, if we don't find it, find that information twice, then we're gonna have have a present to a person to key that information to verify it. But we, our systems verify, verify people's information two times before they before they accept it. And what that means is we're processing our clients data in real time. And because of that, we're able to, we're able to verify it, make sure the data is accurate, and provide our clients with their data and their deposit within 24 hours.
John Corcoran 11:23
And talk a little bit about you know, you've seen this industry evolve so dramatically, but talk a little bit about what kind of an impact that that's had for clients being able to see their data within 24 hours now compared to where it was, you know, even 10 15 years ago. Well,
Dennis Hoffman 11:39
so I'm a fundraiser at heart. And one of the and one of the things that I talk about all the time is speed and speed of speed of sending thank yous to the donor, and speed of asking donor for another donation, those things, those things have radically affect response, just like with any lead, if you were doing lead generation for your business, john, you would you know that the amount of time that passes between the first difference between the time that you've captured the lead, and the time you've talked to them as the longer that passes, the worse it's going to do direct mail fundraising works the same way. And so when when our when we have clients who come to us who say, Well, you know, normally would take normally take 14 days or 16 days for us to us between the time that we received the donation, the time that was updated to our date, our database, that's radically lowering their chance of getting a second donation from that, that donor. So our so what we our clients see overall is when they begin working with us their conversion rate, the number of donors who become multi donors and give to the organization, again, again, goes up.
John Corcoran 12:51
So really, then it becomes more of an advisory type of thing, taking the data and then turning it into actionable changes and practices for your clients talk a little bit more about it any other ways in which you help the clients to make better decisions or to shift their focus in order to have more effective fundraising campaigns, once they have that data in place in there, and they have access to it quicker. Sure.
Dennis Hoffman 13:21
So so we manage the data and do nail analytics for a lot of our clients, but have them do it themselves too. There are amazing tools out there that allow them to do it or, or they'll work with, with other data houses. What the, the the biggest difference, the biggest difference of having accurate data means that your your better analysis is right. If if you have if you have dirty data, doesn't matter how much analysis or how much money is spent in analysis, it's going to be wrong. And that's so so our obsession with clean data is has the biggest impact for impact for clients, whether they whether they work with us for analytics or with somebody else. Mm hmm.
John Corcoran 14:04
That's great. Dennis, it's been great reminder, or tell everyone where they can go to learn more about you learn more about Engage USA connect with you. Where can people go?
Dennis Hoffman 14:16
Sure, our website is EngageUSA.com we can email info@engageusa.com and I look forward to hearing from you.
John Corcoran 14:27
Excellent. Alright, thanks so much, Dennis.
Outro 14:31
Thanks for listening to the Greater Returns podcast. We'll see you again next time. And be sure to click subscribe to get future episodes.