Spotlight On Sustainers: Part 2
Today we focus on research-based best practices — not anecdotes and tribal wisdom — of what produces significant results in launching and growing sustainer programs.
Yesterday, in Part 1 of the Blackbaud Institute’s Sustainers in Focus, the spotlight was on the financial pros, cons and myths surrounding monthly giving programs.
Having shown the undeniable value of sustainer programs, author Chuck Longfield and a team of experienced collaborators set forth in Part 2 (which you can download free right here ) research-backed best practices for marketing, promoting, soliciting and fulfilling a sustained giving program.
As Harvey McKinnon, a pioneer in sustainer giving and author of Hidden Gold, the classic book on the subject, says of this report: “It’s research-backed findings provide a proven recipe for success, and that may be all you need to encourage your boss to start or expand your program. You will also find details on the administrative practices any organization can and should adopt to ensure success.”
Here’s the topline set ingredients for this empirically-designed recipe for sustainer success:
Proven Practice #1: Ask New Donors to give on a monthly basis. Because the primary cause of dramatic increases in sustainer giving over single gift giving is increased donor retention, and because lowest rates of donor retention occur with new donors, it makes good sense to encourage new donors to give on a monthly basis.
As The Agitator has reported ad nausea, new donor retention has been on a declining trend for a long time, undeniably due in part to the unbridled growth of the nonprofit sector. Not long ago, a 35% retention rate for single gift new donors was the norm. The data shown below here illustrates why a sustainer offer is such a strong antidote to donor market competition.
Proven Practice #2: Convert multi-year, single gift donors to sustainers. Lots of tribal wisdom and myth says you should focus sustainer recruiting on newly acquired members. Not so. Here’s what Chuck and crew found.
“Single gift donors who have been retained in active support two or more years have proven even more valuable as converts to sustainer giving than new sustaining donors. It makes sense: these donors have become increasingly engaged in the mission and goals of the organization. In the example below, 640 new donors gave single gifts in 2006 and then became sustaining donors in 2008. Also in 2006, 8,286 new donors gave single gifts and were still single gift donors in 2008. But by 2015, 29% of those 2008 sustainer converts remained active, while only 14% of the 2008 single gift donors who first gave in 2006 were still active supporters.
“Our study has observed that the very best performing sustainer programs are at those organizations that never stop offering their donors the option of sustaining support. By doing so, their sustainer programs deliver as much as 100% to 200% more retained revenue than those that do not.” [Agitator’s emphasis.]
Proven Practice #3: Make Monthly Giving Your Website Default. I spend a lot of time on nonprofit websites and the Donate buttons lead to such a range of asking offers that they appear more like a hunting dog ranging back and forth on the scent than anything based on empirical information. Here’s what the Blackbaud Institute study says:
“The most appropriate and effective way to encourage sustainer giving for new or retained donors is making it the default donation option on the website.
“As demonstrated earlier, encouraging sustainer giving as the default speaks for itself in terms of both long-term donor retention and retained revenue. The organization whose data is shown here is committed to the saying, ‘What gets measured gets done.’ They carefully tracked the impact of making sustainer giving the default choice on their website and found that, in one year, their number of sustainer gifts improved from 1.6% to 5.5% — almost 3.5 times — while their sustainer revenue doubled. These one-year improvements will be compounded by enhanced revenue retention well into the future.
Use the graphic depiction above as good board or staff fodder as you request more dollar and time investment for monthly giving, and as you wrestle with the non-believers in the online crew.
Proven Practice #4: Use a credit card updater service and update invalid credit card data.
Almost anyone reading this hates the nitty-gritty of in-the-weeds ‘must do’s. But this is really important and we’ve called out this big leak in the retention and payment bucket and alerted our readers to it over the years. For example, check out Fixing Hidden Leaks #2.
As Chuck and his collaborators note: “Tracking down donors and manually updating credit card data requires significant staff time and expense, and failing to do so results in significant lost revenue. For one regional organization, using the more automated credit card updater allowed them to recover 11,000 credit card transactions and $200,000 in revenue at a cost of only $7,000, while at the same time increasing their retention of credit card sustainers from 87.5% to 90.1%.
“In addition to using a credit card updater, we recommend putting in place the means for donors to manage their sustaining accounts online. This offers the additional benefits of nudging donors to upgrade their monthly commitments and engaging them by asking them for comments and opinions.”
Proven Practice #5. Encourage donors to use electronic funds transfer – EFT. For years, American fundraisers have used the phony excuse that European fundraisers do better with monthly giving effort because their banking system with its automatic bank debit is so ‘easy’.
No more excuses. Here’re the Blackbaud findings: “Increasing retention, even for highly retained sustainers, maximizes donor value and return on program investment. Across the organizations we have evaluated in our study, electronic funds transfer (EFT) increased donor retention by approximately 13% and revenue retention by approximately 6%. Typically, organizations had credit card sustainer retention ranging from 69% to 84% and EFT retention ranging from 88% to 94%.
“EFT fulfillment also reduces the number of rejected transactions. One organization in our study that documented this aspect of sustainer administration carefully found that its conversion to EFT reduced transaction rejections 92%, from 6.3% for credit cards to 0.5% for EFT.
“The second benefit of encouraging EFT gift fulfillment is transaction cost savings. A community organization in our study, whose volume of transactions accorded significantly lesser scale than a typical national organization, reduced average gift transaction costs 79% by converting credit card fulfillment to EFTs.”
Proven Practice #6: Steward your sustainers. One of my pet peeves is the horrific way some organizations treat abuse their monthly donors. Disgusting. No donor should be treated as a human ATM with information, recognition and basic gratitude withheld almost from the moment they sign up for their monthly gift.
Clearly the Blackbaud study agrees: “Notwithstanding the substantial opportunity sustainer programs hold for enhancing financial stability through high donor (and therefore revenue) retention, there are two aspects of sustainer giving that can limit its potential for even greater value. One is the arm’s length nature of automatic credit card or monthly EFT giving, and the other is the ‘set-it-and-forget- it’ implication of making the initial monthly commitment. The combined impact of these factors and their implication that the sustainer program is a sort of annuity can lead to taking the program and its donors for granted.
“Our study of sustaining donor programs therefore also focused on the value of practices that counter the inclination to take sustaining donors for granted. These include the marketing practices mentioned at the beginning of this report, including branding, providing concierge service, and conducting opinion research.
“Refining all these in ways that distinguish mid-range or middle-donor programs from broad-base general support are the basic practices of upgrading. Practices that characterize closer collaboration and engagement can make those basic practices even more effective: personal contact by senior management, special events for high-dollar donors, and ad hoc reports of the significant role sustaining donors play in the annual financial support of the organization.”
So, let’s put Chuck’s #6 ‘Proven Practice’ at the top of our list: NO MORE DISGUSTINGLY BAD MANNERS!
Lots and lots more in this report. So, download it today and send Chuck Longfield and his team a great big dose of thanks for this precious gift they’ve given us. Email Chuck at Chuck.Longfield@blackbaud.com
Tom and I will thank them by sending along a much-deserved Agitator Raise.
This article was posted in: Board Meeting Swipe File, Breaking Out of the Status Quo, Donor acquisition, Donor retention / loyalty / commitment, Fundraising analytics / data, Nonprofit management, Online fundraising and marketing.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.