Study: many fundraisers aren’t getting recurring giving right

by guest blogger Brady Josephson is the Vice President of Innovation & Optimization at NextAfter.

One of the neat things about working for a research lab that does mystery donor studies — where we actually go out and sign up for emails and make donations to hundreds of organizations to get a better sense of the donor experience — is that you get to see what a lot of organizations are doing. Or not doing. And one of the more surprising things I’ve seen is how little many nonprofits are focused on recurring giving on their websites, on donation pages, and in their emails.

This is surprising, because recurring donors are consistently worth four times more than a one-time donor over their lifetime and for smaller organizations they can be worth more than 11 times more.

So in early 2018, we partnered with Salesforce.org to get a better handle on how nonprofits were going about recurring giving, particularly online. We gave three different gifts — one-time, one-time and converted to recurring, and recurring — from three different donors to 115 nonprofits in 9 different verticals — and tracked the giving experience and communications (online and offline) along the way. We even reported one credit card as lost and the other as stolen to see what kind of systems nonprofits had in place.

The main thing we learned was how little organizations were communicating why we should make a recurring gift — but maybe more interesting was what happened after we became a donor.

The first thing that stood out after our donation was that roughly one-third of organizations didn’t suggest any post-donation action at all and another third asked for a social share of some kind. That left only about a third of organizations that were trying to further engage, connect, and move us to a non-social action whether that was with a value-added resource, taking a quick survey, asking us to look for an employer match, or make a 2nd or recurring gift.

There’s a concept called cognitive momentum, where once we are making decisions or taking actions, we are more likely to keep making decisions and taking actions. This is why things like an instant donation page can work after an email signup or how a prompt for a change to recurring gift for one-time donors can increase recurring donors 64%. They are engaged and in momentum — how can you keep them engaged right after a donation? It’s not something many organizations in our study were doing.

So that was right after the donation and then we started receiving the online and offline communications. Initially, things were looking all right as recurring donors were solicited less and cultivated more.

But when we looked at the communications over time, we saw this:

Image2

You can see that by month three, the number of organizations that sent cultivation messages went down, while the number of organizations that sent solicitations went up. We saw the same trend for the volume of communications we received (as opposed to the number of organizations displayed in this chart).

And when we looked at communications by channel we saw this:

Image3

Email communication was dropping off, but direct mail — which our recurring donor received 44% more of than our one-time donor did in the study — was going up, largely driven by an increase in solicitations.

This hints at a change in how recurring donors get thanked and communicated with right after making their gift. However, by month three they may be “back to normal” and treated more and more similar to one-time donors or in the case of direct mail differently but not necessarily in a good way.

You may have also seen that by month 3, only 9 organizations were still acknowledging our gift (online or offline). Sometimes this is at the donor’s request, but it’s often administrative. It’s cumbersome to send out a thank you every month. Why not a once-a-year statement, right? That may be convenient for you, but what is best for the donor? Who doesn’t want to be honored, thanked, and recognized for their donation? Or given a quick update on how their regular donation is making a difference?

The worry is that you don’t want to overwhelm your donors which I can understand but there’s a very good chance you aren’t even close to overwhelming your donors in terms of your volume of communications. This assumes you’re sending cultivation content that isn’t focused on asking — something 13% of organizations in our study didn’t do to any of our three donors — and is meaningful to donors.

I get asked all the time what’s the right amount of email or communication to send. But the key variable in answering that question is what is the quality of those communications? If you send something focused on you and talking like a robot … well, you probably can’t send many of those, because those suck to receive as a donor. But if you have personal, relevant, and valuable content in the eyes of the donor, you can send a lot.

The lack of a post-donation action, the worrying trend of less cultivation and email and more solicitation and direct mail by month three and only nine organizations acknowledging our recurring gift in the third month are just a few of the key insights from our experience as a donor to 115 nonprofits.

We also found that:

  • Only 15 organizations called us and two sent us a text message.
  • Just 1 in 5 organizations ever sent us a message from an address representing a real person.
  • 47% of organizations didn’t contact us when we canceled our credit card.

You can get all the insights and findings from the study for free at recurringgiving.com, and if you’re wondering how your organization stacks up compared to those in the study, you can benchmark yourself against them here.


Comments

2 responses to “Study: many fundraisers aren’t getting recurring giving right”

  1. Armen S Boyajian CFRE, Avatar
    Armen S Boyajian CFRE,

    Interesting post. IMHO, the problem is that many nonprofits don’t know what to do with a new (or recurring) donor except to ask them for money. One exception is the Leukemia & Lymphoma Society, where I get a fair amount of informational emails on what your donor dollar has helped them achieve — and sometimes a request to send my congressman or senator an email about cancer funding – both of interest to me.

  2. Armen S Boyajian CFRE, Avatar
    Armen S Boyajian CFRE,

    Interesting post. IMHO, the problem is that many nonprofits don’t know what to do with a new (or recurring) donor except to ask them for money. One exception is the Leukemia & Lymphoma Society, where I get a fair amount of informational emails on what your donor dollar has helped them achieve — and sometimes a request to send my congressman or senator an email about cancer funding – both of interest to me.

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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.

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