Sustainer Giving Programs Presented by Carol rhine

Harvey McKinnon, author of “Hidden Gold” McKinnon says that monthly giving “preauthorized giving” will become more prevalent as more Americans move to online giving.   He notes that 50% of Canadians now pay ALL of their bills through EFT or on line.  50% of Canadians, 85% of Europeans, and 95% of the Japanese use EFTs to pay bills and make all of their donations. McKinnon outlines lots of advantages to not-for-profit organizations and charities using monthly giving programs.  Builds a better relationship with donors.  Monthly giving helps donors feel special, elite and plugged in.  Monthly givers should be your top prospects for wills, bequests and planned gifts. Keep donors giving longer. Preauthorized monthly giving dramatically extends the giving life of a donor over decades, not just a few years or months. A sustainer program lowers overall costs of fundraising and improves fundraising cost ratios.

background In most other countries, most donors give by making monthly payments to their charities. That is fast becoming the norm here in the United States as well.  Charitable giving is affected by culture and infrastructure. Infrastructure is changing Banking Credit/Debit cards Mail Telephone Internet

Sustainer programs Globally median 78% US median 34% Without child sponsorship 16%

International Perspective Percent of donors giving recurring gifts is growing nearly everywhere – including in the United States International Perspective Single Gifts are Blue Recurring Gifts are Orange Source: Target Analytics International donorCentrics Benchmarking Project 2011; note: number of donors and organizations is not the same in each country.

International Perspective Diversity of sources is higher in recurring giving than in single gift giving Source: Target Analytics International donorCentrics Benchmarking Project 2011; note: number of donors and organizations is not the same in each country.

International Perspective Out of 15 participating countries, the USA has the third largest number of recurring gifts given. The rate of growth is slower in the USA than in many countries. International Perspective Source: Target Analytics International donorCentrics Benchmarking Project 2011; note: number of donors and organizations is not the same in each country.

Us sustainers Single Gift Donor growth Indexed to 2008 Sustainer growth Indexed to 2008

Where are we in 2012? Group Composite - All Donors $102 revenue per donor, $30 average gift, 3.3 gifts per donor Group Composite – Recurring Donors 22% of all donors gave at least one recurring gift in 2012 There was a 9% increase in the recurring donor population 47% of all revenue was generated by recurring donors There was an 8% increase in revenue from recurring donors $219 revenue per donor, $24 average gift, 9.2 gifts per donor Group Composite – Donors Who Only Give Recurring Gifts 12% increase in donors;13% increase in revenue $189 revenue per donor, $22 average gift, 8.5 gifts per donor

Where are we in 2012? In line with Global trends, the diversity of sources is higher in recurring giving than in single gift giving. EFT is used across donor ages for new donors in non-Mail channels

Us sustainers

Us sustainers

Where are the Largest programs? Public Radio Child Sponsorship International Relief Catholic-related Organizations

TV Stations Ranked by FY11 Sustainer Share of Total Revenue

RADIO Stations Ranked by FY11 Sustainer Share of Total Revenue the top 7 stations averaged over 33% of their FY11 revenue from sustainers the arithmetic average for all 42 stations was 12% in FY11; top Sustainer stations also had higher retention as well as better overall donor and revenue performance in FY11 11 stations averaged less than 5% of their FY11 revenue from sustainers Median Many of the top Sustainer stations were also among the stations with highest new donor retention as well as overall donor and revenue performance in FY11

Where are the Largest programs? Capital Public Radio KCPT KFCR KPBS KPCC KPLU KUHF MPBN MPR OPB TPT VETV VPR WBEZ WGBH WNYC WUNC All of these stations and others with large programs have made real commitments to building their programs through acquisition.

How valuable are they? Recurring donors are one of the most valuable segments in a fundraising program because of the compound effect of their giving. Twelve gifts of $10 or $15 given in one year is more cumulative revenue than the majority of single gift donors (those who give individual gifts) will give annually. Sustainers out-perform other donors on the two drivers of long-term value: Revenue per donor and retention. They are consistently worth four times as much as single gift donors over five years.

Value difference sustainers vs. single gifts

Sustainers – Math for monthly donors

How to build your program Acquisition Growing the number of recurring donors (especially substantial growth) requires shifting acquisition to put sustainers first. Make sustained giving the expected way to give. Put the sustainer option first online. Put the sustainer ask on all forms. Most common means of acquisition Face-to-Face Door-to-Door DRTV Telemarketing Direct Mail Ads and Inserts

How to build your program Conversion If donors are given the option, on any direct mail reply slip, to donate one gift or to donate monthly, a small number of donors will choose to give monthly. Telemarketing will convert more donors, either through two-step acquisition to sustained giving or by converting multi-year members. The donors most likely to convert are those with a history of responding to the first renewal notice. Online purchase behavior is an indicator of sustainer likelihood. Sustainers are younger and more female than the rest of your file.

Keys to success Everyone on the fundraising team, as well as staff in donor communications, marketing agencies, finance, and the executive team have to be educated about the benefits of sustaining gift programs. Long term value becomes the standard measure for success for the direct marketing program. Using campaign CPDR or annual net revenue will not result in a justifiable return for a new, growing sustainer program. Long term plan – dipping your toe in the water of monthly giving and only acquiring a few hundred donors and then having to manage, fulfill, and support the program will lead to frustration. Build the program with the intent that this IS the new way to fundraise and grow the donor population to return the highest net per donor with the lowest CPDR. Know that it will take time and it will take a consistent, steady commitment to growth. .

Getting full value from sustainers Do not promise no other asks. Do not promise no mail, or phone, or email. Once or twice a year ask for upgrades. Include sustainers in the best appeals. Thank and cultivate them. Engagement is important.

Why do they become sustainers? Knowing they are supporting the organizations they care the most about – becomes automatic instead of having to think, “did I send them a gift recently?” It is easy and convenient. They really care about the mission of the organization. Not because it helps you. Not because it is green. Not because they will never hear from you again.

considerations Be prepared for the cash flow issues in a start-up program. Twelve times as many gifts to process. Banking, credit card and online processing issues. Build stop/loss programs to stem attrition. New measures of performance to monitor. Decide whether to brand the program – many in the US are branded most elsewhere are not.

Carol.rhine@blackbaud.com