1. Sustainers in Focus: The Real Value of Monthly Giving Programs Chuck Longfield, Chief Scientist, Blackbaud May 1, 2017

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3. “A principal driver of health care expense is the variability in medical practices.” Ellen Zane, former CEO Tufts Medical Center

4. Agenda or Section Slide
Subtitle if needed
Penicillin was discovered in 1928 by Scottish scientist Alexander Fleming.[3] People began using it to treat infections in 1942
Albert Alexander was a constable in the police force of the County of Oxford, England.[1] In December 1940, Constable Alexander was accidentally scratched by a rose thorn in his mouth. He was treated, got better but supplies ran out and he subsequently died
A 10-day prescription might be appropriate for strep throat, but a simple urinary tract infection can be conquered in a briefer period

5. So what do I mean by variability in FR practices
These are all solicitations from Fall 2014.
In most cases, I gave to these organizations gifts of $100 in the years 2011, 2012 and/or 2013.
Local Special Olympics office (2011 & 2012 $100). Is this best practice?
How many have a fundraising appeal similar to this?

6. Harvard Magazine (2013 $100)
Is this best practice?

7. Emerald Necklace ($ )
How about this?

8. St. Judes (2013 & 2014 $100)
This? St. Judes is pretty good at fundraising and analytics!

9. Perkins School for the Blind (2010 $500)
Could this be best practice!?

10. Parkinson (2013 $100)
This?

11. Acquisition piece
This has everything. Maybe that’s best?
None of the others suggested monthly

12. Does monthly giving improve revenue retention?
Research Question
Does monthly giving improve revenue retention?
Sustainers address lots of traditional problems – low new donor retention, reliable income stream, costly solicitation
They also have higher average gifts
Before showing next slide give simple example:
2 donors each gave $100 last year
This year one gave $200 and the other didn’t give anything
Donor retention = 50% but revenue retention is $100.
And at the end of the day, it’s money that counts.

13. What is revenue retention?
Revenue Retention is the % of prior year revenue given again by a donor or group of donors
Example
100 new donors gave $10,000 last year
30 of those donors gave $4000 this year; the other 70 did not give.
Donor Retention is 30% (30 / 100)
Revenue Retention is 40% ($4,000 / $10,000)
Average Retained Revenue per Original Donor is $40 ($4,000 / 100 original donors)
Like financial assets, you don’t want to lose principal. It takes a long time to restore. Losing existing donors is real bad. Can’t easily re-acquire. Focus on retention. Sustainers does that. Then CC & EFT does that more. EFT even more. Credit card update service more. Good customer service and maintenance practices.

14. Explain graph slowly
4 points to be made - Start with green – lots of single gift donors first year with $40 AG, but low retention and 10 years later only 3% still giving - Fewer started out as sustainers but higher % retained (13%) almost same # of donors 10 years later - Sustainers gave more dollars in year 2 (full year of monthly gifts) - Sustainer donors were better donors BEFORE they started giving monthly
Could even make point about investing in younger donors – training them to give
But so few will be around when they have money at age 50!

15. $80 $238 $67 Explain graph slowly
4 points to be made - Start with green – lots of single gift donors first year with $40 AG, but low retention and 10 years later only 3% still giving - Fewer started out as sustainers but higher % retained (13%) almost same # of donors 10 years later - Sustainers gave more dollars in year 2 (full year of monthly gifts) - Sustainer donors were better donors BEFORE they started giving monthl
$238
$67

16. If Sustainers are so good, then what are the practices that have proven to increase revenue?
First 3 practices are simply asking donors to give monthly
Next 4 are good maintenance practices
Final 3 help increase sustainer revenue
Will go into first 5 in depth

17. Ask new donors to give on a monthly basis
Proven Practice #1
Ask new donors to give on a monthly basis
Improve new donor retention by ~150% and revenue retention by ~70%
New donors have very low retention. Sustainer giving helps with that.
Could also do by source but only if time permits
Similar results for colleges though haven’t analyzed as many
Same for PB
For all acquisition, source is critical – on street and canvassing can seem good but may not be.
Don’t accept check/billing sustainers if you can avoid it.
Data and graph available in Retention of First Year Sustainers.xlsx

18. Make monthly giving the default option on your web site
Proven Practice #2
Make monthly giving the default option on your web site
Improve average web gift by 20-30% while increasing donor and revenue retention (see prior slide)
Chart is KTCA’s 7 year transition from almost all single gift donors to 80% sustainers on web site (see Sustainer - NonSustainer Split of Web Gifts.xlsx)
TPT is 50% sustainer on web site (though graph implies 75%) Confirm with David.
The improved donor and revenue retention of sustainers is demonstrated on the prior slide
One org leads with monthly giving January – November but transitions to one-time ask in December (haven’t researched if that is best practice)
Web site should make clear that the gift is monthly to avoid complaints when their CC is charged a second time.
HRC asks a second time to give automatically renew one-time gift each year (annual sustainer). Show example, Lauren sent.
The % increase depends on quality of collection activity, e.g. credit card vs EFT, credit card update service, etc.
The 20-40% increase in average gift depends on a full 12 months of collection. Data is in Sustainer - NonSustainer Split of Web Gifts.xlsx.

22. Look at HRC data – doubled monthly – lost more in single gift

24. Convert multi-year, single gift donors to sustainers, in all channels
Proven Practice #3
Convert multi-year, single gift donors to sustainers, in all channels
Increase revenue retention by %
Avoid cash flow hits by converting donors in 3rd month after gift – “9 months of additional gifts!”
HSUS – 2nd year success
Show increased retention and average gift for multi-year donors.
Could show for # of years before conversion
Much easier to convert a younger donor to sustainers – 41% of sustainers are ages vs 35% for single gift donors
Data on slide comes from graph in first paper.

25. $100 per original donor $66 average first gift $20 per original donor
Collect language that demonstrates how various channels can be used to convert on-time donors.

26. Encourage donors to use EFT over credit card
Proven Practice #4
Encourage donors to use EFT over credit card
Increase donor retention by ~13% and revenue retention by 6%
Are there age or gender differences with EFT vs CC sustainers? Analyze
Mercy Corps converts 7% of CC sustainers to EFT by using mail with message that credit card fees are higher than EFT (“you can have greater impact and it won’t cost you a cent!”
MPR made EFT default option in Feb Look at difference after that date. Some data is a rise from 4% to 14-17% EFT
Mileage cards for more CC than EFT at higher $s
HSUS reported to us that their 2015 range of retention for CC was 69%-84% and for EFT was 88%-94%
KJZZ  proportions of CC and EFT went from 68%/30% (2% mail) in 2011 to 48%/52% in 2015 (no mail)
KJZZ, in 2015, reduced per transaction costs by 79% by shifting CC sustainers to EFT ($.75 for CC and $.16 for EFT) NOTE: some base amount must be missing because CC fees are more than $.75
KJZZ reduced monthly rejects by 92% from 6.3% rejects for CCs to just 0.5% for EFTs.
A typical BB client will reduce their per transaction costs for a $100 gift by 74% by shifting from CC to EFT ($2.85 for CC and $.75 for EFT)
Local NonProfit (KTCA) increased donor retention 11% (85% to 94%) moving sustainers to EFT
National NonProfit 1 (HSUS) increased donorretention 22% (76% to 93%) moving sustainers to EFT
National NonProfit 2 (DWB) increased donorretention 3% (91% to 94%) moving sustainers to EFT
Average donor retention is 13%. Average revenue retention is 6% (see CC to EFT Conversions xlsx)

27. Use a credit card updater service and update invalid credit card data
Proven Practice 5
Use a credit card updater service and update invalid credit card data
Increase sustainer retention rates by 3% per month, while significantly reducing donor outreach efforts
Higlight Blackbaud’s Merchant Service Credit Card Updater. Integrated directly into products and capturing correct CC#! Critical!
Canada – fewer banks in CC updater
WGBH increased retention rates from 87.5% to 90.1% after implementing Vantiv’s CC updater in Aug 2015
WGBH’s retention of EFT’s during that same period stayed flat at 95.7%
Oxfam started using CC update and overall retention rate of sustainers increased from 62% to 66%.
Note that these improvements are cumulative and can make the difference between an increasing number of donors or a decrease. Each one lost in this way needs to be re-acquired at significant expense.
WGBH has a very aggressive 40 day cycle on sustainer follow-up – s, calls, mail
Not all banks participate in CC Updater. “Repairs” (new #, expiration date, etc) are made to bad CC data about 80% of the time (WGBH’s FY 16 rate)
Over this period WGBH fixed 11,298 credit cards and recovered $208,000 at a cost of $7000!
Santa Clara Univ. fixed 21% of cards in first run and 3%/mo thereafter. They typically spend 40hrs fixing 100 CC sustainers % ROI!

28. Additional Proven Sustainer Practices
Practice 6 - Be aggressive in collecting missed payments
Practice 7 - Survey sustainers who stop giving
Practice 8 - Encourage sustainers to upgrade to higher giving levels
Practice 9 - Include sustainers in traditional communication stream
Practice 10 - Provide monthly donors with phone# & of a program manager
6 - Contact donor via all channels within 7 days
6 - Don’t double up charges, collect missing payment immediately (double charges causes confusion and looks like duplicate payment)
7 - Ask Michal for summary of what he learned
7 - Don’t deduct funds prior to common pay dates
8 - Look at HRC for % giving sustainers at higher levels. What did upgrades look like?
8 - First ask in an upgrade call should be to convert to EFT
9 - Look at additional gifts, etc. for someone that does this.
10 - This will generate ~1-2 contacts/week per 10,000 sustainers

29. How to get started?

30. Resources Hidden Gold, Harvey McKinnon www.harveymckinnon.com/books
Monthly Giving, Erica Waasdorp
Sustainers in Focus – Parts 1 and 2
Sustainer Case Study
Recurring Gift Overview
Remember, much of what is presented is the art. Remember the science.