Where to Find the Elusive Monthly Donor
As the one-time donor (dator unum) becomes an increasingly endangered species, organizations have correctly gone in search of recurring donors (dator magnus).
In the past two years, sustaining gifts have gone from 20% to 30% of (median) organizational revenue. Much of the search for recurring donors has been centered on trying to get one-time donors, especially frequent ones, to convert to this new type of giving.
It’s clearly a worthwhile endeavor. But it’s not how organizations are getting most of their recurring givers today. Looking at Blackbaud’s DonorCentrics data, two-thirds of new recurring givers were acquired directly for recurring giving with only one-third coming from the ranks of single-gift donors. Again, this isn’t a reason to give up on conversion – unless your donor file has one-third of the country in it, a random person from your file is more likely to become a sustaining donor than a random person outside of it.
It does mean, however, that any serious effort to grow the ranks of sustaining donors must include direct-to-monthly acquisition.
So where are organizations getting these sustainers? On average, 56% of sustaining revenue comes from three places: digital, face-to-face, and DRTV. This number will only grow, as these three sources were responsible for almost all the new donors coming in as sustainers. And digital also converted almost half of the donors who were converting from one-time donors.
In other words, if you aren’t doing F2F, DRTV, or focusing your online efforts on acquiring sustaining donors, you will be falling behind other organizations in efforts to build a robust monthly giving file.
I say “focus” here intentionally. ASPCA has one of the more robust sustainer efforts here in the United States. Their efforts range from mail (which is 99+% one-time acquired donors and 1% or less monthly givers) to canvass (100% sustainers). In the middle are organic online acquisitions, at about a quarter sustainer, and DRTV and digital acquisition, which are about three-quarter sustainers.
Why the difference in organic online and paid digital acquisition? Focus. ASPCA knows that a random person coming to their donation form is likely looking to make a one-time gift. So while they make it very easy and attractive to switch to a monthly gift, they have a one-time default. However, if they’re using paid advertising, the ads will be monthly-focused and they will take you to a form where one-time giving isn’t an option.
It’s not just paid advertising spend you should focus on. Some other digital techniques for recurring gifts:
- You can shift emails and other online campaigns to monthly.
- You can highlight a monthly gift option after a one-time gift is submitted (but before processing) with a shadowbox.
- You can experiment with one-time autorenewals.
- You can have a monthly default on your donation form.
- You can promote monthly gifts and impact statements on your site.
Most of these involve a sacrifice – giving up a one-time gift now for the chance of a more profitable long-term relationship. But as monthly givers have greater retention rates and higher lifetime values, that’s often a tradeoff worth making except for those with a short-term viewpoint.
Finally, it’s worth looking at your investments to see if you should be investing in other types of direct acquisition. Face-to-Face, for example, is 60% of the directly acquired donors for the median organization. And directly acquired donors are two-thirds of the overall population, meaning that Face-to-Face acquisition is bringing in 40% of the total monthly donors for the average large organization.
Roger has explored the peril and the promise of this channel, but these data show it can’t be ignored.
Nick
6 responses to “Where to Find the Elusive Monthly Donor”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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Excellent article and timely for a year in which more and more orgs seem to be requesting specific monthly donor appeals and campaigns.
Thoughts on drilling down into an organization’s data for “potential monthly donors”–those who give more than once a year and seem to have a pattern of giving more similar to a monthly donor? We’ve found this productive and more efficient than trying to convert the one gift donors.
That’s right – the one-third of donors who convert from one-time giving skew toward those who give multiple times per year. Please forgive the lack of clarity on this point — it’s difficult to find a name for donors who give single gifts (plural) that doesn’t connote that they may have only given once (single-gift donors? one-time donors?). We’ve found the same thing – that people who give gifts more frequently are more likely to take the leap to monthly giving. That said, that frequency of giving and monthly giving are both proxies for commitment to the organization, so you can find some gems in your file of people who are higher commitment but haven’t yet given multiple times.
We’re also seeing some success with lead generation campaigns with conversion to monthly giving. In fact (and we’ll announce this officially later in the week, but as a special bonus to Agitators who read the comments), we’re doing a free webinar on September 18 with sign-up at https://zoom.us/webinar/register/WN_c3tl08USRMuv4Vm4V9L1UA.
Adding nothing to this discussion, Nick … except my thanks. Wonderfully covered.
This is great for big national charities who can afford DRTV and have lots of people doing face-to-face.
But small, local organizations have neither the budget nor the manpower for such endeavors.
Anyone have any suggestions or timely tips?
Thanks!
Cindy,
The comments Nick made about digital hold for any charity with $100k in revenue or a $1 billion. As for F2F, canvassing for the local food bank versus a national brand that operates no shelters or food banks is often a much easier sale. But, how does the local food bank afford it? Not to be flippant, but how can they afford not to do it?
F2F typically only charges for monthly donors that are signed up. Yes, that number is bigger than the cost to acquire of a one-time, direct mail donor but in both cases, looking at acquisition cost alone is a lot like one-hand clapping.
What the local food bank needs is risk tolerance and to put a huge premium on the risk of not growing at all. With adjusted risk tolerance the local food bank can use debt financing to fund F2F acquisition. There are likely even agencies willing to provide this financing (DVCanvass is one of them and in full disclosure, I own it).
This applies to larger charities as well that remain forever risk averse and in their case, often sitting on massive reserves that will (not if, but when) result in a “lovely” cable news or shock journalism expose sooner rather than later.
If you aren’t growing you are dying as an organization -this applies to nonprofit and commercial alike. Debt (or equity if we really want to get creative) financing is not a dirty word or concept. Nor is investing reserves to turn $1 into $3. And yet, too much cash is parked on the sidelines globally and domestically.
Excuses, lack of basic financial acuity and low risk tolerance are what sit between growth and stagnation and that applies equally to today’s $100k and $1billion charity.
Great article. Thanks for including the helpful, actionable steps.