Monthly Sustainers vs. One-Time Donors? Finding Middle Ground

16-8-10_squareAHHHH, the sweet sounds of monthly sustainers. Committed and highly engaged monthly donors, whose gifts hit a nonprofit’s ledger with increasing regularity as more and more of them embrace autopay options.

No wonder nonprofits spend a lot of money and effort to acquire them; either directly from a prospect universe (often DRTV or face-to-face canvassing) or cultivated from qualified donor segments, which usually require a telemarketing component to close the deal.

In either case, it’s a labor-intensive, expensive exercise with a low conversion rate, but one that yields a high payoff.

Yet despite their potential, many monthly sustainer programs are intrinsically flawed:

  • Many give the impression that the donor is signing up in perpetuity, no doubt a perception that limits buy-in. Feedback studies report that donors who are considering a monthly relationship don’t see a way to “manage” it, so they can easily stop, decrease or increase their gift once they sign up.
  • By definition, the idea of regular monthly giving lacks urgency. Therefore, when sustainers lapse, it becomes difficult to make a case that there is a sudden need to fill the gap that their lapsing created.
  • There is little originality or customization among nonprofit sustainer programs today. Excepting child sponsorships, almost all of them seek a $16-$19/month price point, and little thought is given to differentiating the programs’ “brands” from others in the same vertical. In fact, remove the organization’s name and most branded sustainer programs are indistinguishable from each other.

What floats a monthly donor’s boat?

  • The organizational mission resonates with them. They like to know that their support makes an impact.
  • That impact creates an inherent “warm glow” of self-satisfaction for the donor, knowing that they were asked and responded, and in so doing made the world a better place.
  • They appreciate the convenience and budgetary control of planned monthly giving.

And perhaps another overlooked intangible,

  • Because they are largely diverted from the regular contact stream, they can easily engage and stay informed about the impact they make without being repeatedly hassled with new “ask” appeals.

In return, they willingly deliver regular support, month after month.

What about those who do not make a 12-gift commitment?

Part of the “by-catch” of sustainer acquisition (the lower-value “species” scooped up in the nonprofit’s net) are one-time donors. Whether originating from a prospect universe or from an active donor segment, they were motivated to give, just not at the rate of 12 times a year.

However, 90-95% of prospects and donors simply do not respond to a 12-month commitment. And that’s not surprising. It’s a big investment commitment for even those whose hearts respond to a nonprofit’s mission.

In the end, new one-time donors and non-responsive existing donors are generally sent into back into the regular donor appeals contact stream, to join the greater mass of single gift donors.

And what exactly is that “regular stream?”

Of course, that depends on the organization, but very often it is a contact “chase” strategy that includes 12-18 discreet touches that ask for another contribution, in one channel only. The same file may be chased to a similar degree in other channels as well.

That’s at least 12-18 attempts to get one more gift in the year, from a pool of donors who have either been identified as having the capacity to give multiple gifts in a year, or who have actually responded to a sustainer invitation, but elected to give only once.

After the second or third consecutive appeal, their “warm glow” appetite for steady support may be starting to cool. Certainly by the 18th contact, this chase strategy has completely frozen any purely emotional motivation the donor might have experienced at one time.

1 gift vs 12 gifts…is there an in-between?

DonorVoice is a firm that specializes in working with nonprofit organizations to gather insight on how every touchpoint positively or negatively impacts donor loyalty and, subsequently, giving. They are currently conducting a ground-breaking pilot program for a national nonprofit.

This organization, like many, traditionally acquires DM donors with back-end premium offers, and as a result, supports a donor file that is bottom heavy with premium buyer-style donors. They also maintain a relatively small, tiered mid-level donor program and a separate monthly giving program, which comprise less than 3% of the donor base .

Their donors are typically exposed to 14+ appeals per year, depending on segment.

“We proposed testing a 4-gift giving ‘club’ for qualified donors who were screened for capacity to give,” said DonorVoice partner Josh Whichard, “with specific dates assigned for each gift requested.”

These gift dates were tied to calendar-based needs that were, in turn, tied to mission.

“In exchange for a commitment to ‘join’ the club, donors were promised regular updates on their impact, but also promised they would not be solicited for further gifts for the remainder of the year,” said Whichard.

More important than the number of requested gifts was the alignment of the ask with an event on the organization’s calendar that had meaning and need. This yielded a mutually beneficial quid pro quo — a multi-gift donor to the organization and a donor who felt great about pitching in when and where needed most.

Compare this quid pro quo to a traditional single gift chase strategy.

Subsequently, after the first gift date passed, the program was remarketed to the screened donor file asking for a 3-gift commitment. At this point, a one-time only gift option was added to the reply document, with a suggestion that the full year commitment could be fulfilled with one large (3x) gift.

It is important to note that these offers did not include a back-end premium.

Early results are eye-opening

Effort 1, asking for a 4-gift commitment, yielded a 7% response rate with a $40 average gift.

More impressive, over 50% honored their commitment to make gift #2, despite a processing glitch that interfered with credit card payments.

Considering the same donors, when solicited 12-18 times (many more, with email included), yield gift frequencies of 1.4-1.6/year, it is remarkable to note that 50% of the test group exceeded that rate within 3 months.

Effort 2, asking for a 3-gift commitment and offering a one-time payoff, increased average gift to $60. And it appears that donors are upgrading at a 3x normal rate.

“Bottom line,” says Whichard, “moving the needle on gift frequency while lowering spend to 4 or less contacts not only increases the ROI but also increases the likelihood that donors will retain because we’ve created a much more fulfilling experience in their minds.”

Lessons learned

Top-line conclusions? There are several:

  • There is a “middle-ground” multi-gift model that can scoop up engaged donors who won’t necessarily commit to 12 gifts
  • Great impact and upgrade potential for average gift values, frequency and retention rates
  • Because these donors are removed from 12-18/yr appeal cycle investment, their ROI improves dramatically
  • The no-solicit promise and cultivating updates seem to be greatly valued

As always with outside-the-box innovation, careful donor file analysis is required to understand long-term effects, both intended and unintended, and to pivot strategy and tactics if necessary in order to further improve performance.

But the early returns are intriguing.

  • Has the DonorVoice “multi-gift club model” truly improved the engagement experience for qualified donors, and by doing so vastly improved their Lifetime Value?
  • Has it inadvertently downgraded qualified donors who might have otherwise committed to becoming monthly sustainers?
  • Or has it turned complacent single gift donors into engaged multi-givers with a greatly improved ROI?

This story has yet to conclude, but it is a fascinating one to follow.

Leave a Reply

Your email will not be published. Name and Email fields are required.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>