If you haven’t seen the results of the 2013 Fundraising Effectiveness Project study from AFP and the Center on Nonprofits and Philanthropy at the Urban Institute, here is the long and short of it: the average donor retention rate is 39%. For first-time donors, the rate drops to 22.9%.
These truly are scary numbers, aren’t they? Believe it or not but this truly generated a wave of wake up calls to many nonprofits, large and small!
But the good news? There is a solution!
It’s called Monthly Giving (aka Sustainers aka Recurring Donors)
Some of you may know that I hail from Europe, the Netherlands to be precise. It’s a tiny country with some 17 million people. In the 21 years I’ve been in the US, I’ve been fortunate to have worked with local, regional, national and international organizations and their Sustainer programs.
What I found is that organizations in most European countries are fortunate in that their donor retention rates are already much higher. Why? Because they have some 80% of their donors on monthly giving programs, that’s why!
People in Europe are very comfortable using their bank account and virtually every payment totally goes through the bank. Organizations never even see a donation form. It’s all done through the bank. (Just think about that, no data-entry department to worry about).
And now, with the tremendous interest in improving retention rates and overall trends of automating payments both through bank and credit card, the commitment and success of some leading organizations, Sustainer giving has reached the US.
Many American organizations are (finally) interested in ‘waking up their sleeping giant’, so here are just a few practical tips that will help you start and grow a your sustainer program and improve your retention rates to levels you’ve never dreamt of before:
1. Commit to making sustainer giving part of your fundraising plan and then actually execute the plan!
2. You can certainly start online and then move to offline media. It’s like anything in fundraising world: If you ask them, they will come!
3. Start with the end in mind. In other words, make sure you have your special thank you letter written and make sure you have the coding in place so you’ll be able to track this special group and approach them in a special way.
4. Do not stop communicating with these sustainers. They care more about your organization than other donors do. They want to hear from you because you have wonderful stories to tell and you want to tell them how their monthly donation makes an impact to the people (or animals) you serve.
5. Think long-term and make sure everybody in your organization does too. Sustainers truly are ‘retainers’. Most programs I’ve seen break even in the first year, but your finance folks have to think to look at the year (rather than immediate revenue). I always recommend annualizing the revenue from sustainers. These are not $5 monthly donors, they actually give $60 a year!! And they’ll be doing this for the next 5 to 7 years (at least)!!Research shows that you can expect retention rate for these donors to be between 90 and 95%!!
Every organization is different. Every organization has a different mix of new and existing donors to approach. That’s why every monthly giving program is tailor made. The speed of growing your monthly giving program totally depends on the commitment and investment you make in it. I’ve developed some tools to help you calculate how fast you can grow on www.adirectsolution.com or simply send me an email at firstname.lastname@example.org to find out more.