Updated: March 26, 2004

Partner With a Professional Cager,
and Streamline Your Donation Processing

Every nonprofit organization has processed its donations with its own in-house system at one point in its history. Eventually, that in-house system can become overwhelmed by an influx of donations, or a direct mail manager becomes overwhelmed by the personnel issues that naturally arise from managing a large clerical staff. When that time comes, the organization must ask itself, "How can we streamline the process of getting our donations deposited into our bank accounts promptly, and ensure that our donors are thanked within a reasonable time?"

One way to address this problem is to hire a company that specializes in caging.

Caging, also known as cashiering or lockbox services, is so named because its employees used to work in cages for security purposes. Today, the term defines the process by which mail generated from a direct mail campaign is opened, and donations are processed and deposited.

Staying True to Your Mission
Does your nonprofit organization exist to be a personnel management organization? Certainly not! In all likelihood, it exists to advocate for a particular issue, cause, or group of people.

Increasingly higher volumes of outgoing direct mail will usually bring increasing volumes of donations. If you cage all your mail in-house, a large staff and a dedicated room will be needed to handle all the back-end processing. The hiring, training, and managing of this staff can be quite daunting for an organization.

Every minute spent focused on personnel issues is a minute that could have been dedicated to your organization's mission. Distractions like this can lead to postponed mailings and delayed thank-you letters to donors.

A caging company can bear the burden of myriad clerical and personnel matters, freeing nonprofit personnel up to focus more effectively on their mission.

Saving Your Organization's Resources
It is very rare for a nonprofit organization to solicit direct mail donations evenly throughout the year. It is more common for there to be large outgoing mail solicitations at certain months of the year, and no mailings during other months.

These peaks and valleys can make it very difficult to efficiently manage employees and their duties. How efficient is it for your organization to pay employees for overtime during part of the year, and pay them to sit idle at other times?

Caging companies have a variety of clients who all mail at different times of the year, thus ensuring a steady stream of mail flow to the cager for processing. The peaks and valleys so familiar to in-house processing are virtually non-existent in caging companies. They can accommodate your mailing schedule to fit your needs.

Providing an Unlimited Potential
The English author Samuel Johnson once said, "Our aspirations are our possibilities."

If you feel that a particularly large mailing would bring in a large amount of donations, don't let your aspirations be constrained knowing that your in-house processing staff can handle only a smaller number of returns in a timely manner. With a caging company, the sky's the limit in terms of mail volume.

Choosing a Caging Company
There are a number of attributes that a nonprofit organization should look for when choosing a professional caging company:

1. Ability to Handle 'Exception Mail' Unlike mailed payments to the gas or electric company, mailed donations to nonprofit organizations can have unusual traits. Envelopes often contain:

  • Letters (sometimes 10 pages or longer)
  • Cash and coins wrapped in paper, stapled, or taped
  • Donations with no source document
  • Handwritten requests written all over the source document
The caging of "exception mail" is quite labor-intensive. Typically, more than one experienced set of eyes will be needed to interpret the handwriting and the requests in a long letter. In addition, when cash is received with a document, the caging company must ensure that the donor is recognized. The company should have procedures in place to ensure that these pieces are treated with the same importance as a standard, uncomplicated donation.

2. Fast and Accurate Caging
It is important that you know how well every list is performing in each and every fundraising mailing. The cager should provide you this information as quickly as possible, so that you can track each mailing and make adjustments in the future. The cager must be able to distinguish between large gifts (using your definition of "large") and the smaller ones, so that you can appropriately acknowledge the donors.

The cager should process your mail the day it arrives in the post office box. Mail should never sit idle. Your donations should be promptly deposited as well.

3. Security
The cager should have internal controls and systems, such as video recording and special security processes, to ensure that all donation transactions can be traced. All persons who work with donations should be bonded.

Regarding information security, all data should be backed up daily and copies should be transferred to a secure off-site location.

4. Personalized Service and Specialization
What information do you want captured from a mailing? The cager should be flexible enough to change its systems and gather the information that you want. If more information is gathered from prospect mailings, later mailings to these individuals could yield larger gifts.

In addition, find out what other functions the caging company handles. Does the company just do caging as an aside? Can the company provide you the special attention that you need, or is it preoccupied with other functions? How much experience does the cager have in dealing with the unique qualities of nonprofit organizations?

Making the Decision
Partnering with a professional caging company will not be appropriate for every organization. Some organizations process a volume of mail that is manageable in-house.

But, for those nonprofit organizations that want to focus on their mission and not personnel issues, and have aspirations for larger mailings leading to a larger pool of donors, partnering with a professional caging company can be a smart step toward the future growth of the organization.

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