In this webinar, Brady Josephson shares the results of his State Recurring Giving Study where he gave multiple gifts (one time and monthly) to 108 organizations in the US and tracked and scored the process. See how you measure up!
Steven:All right. Brady, I got one o’clock Eastern. Is it okay if I go ahead and kick us off officially here?
Brady: Do it.
Steven: All right. Cool. Well, good afternoon, everyone if you were on the East Coast, and good morning, I should say, if you’re on the West Coast or somewhere in between. Thanks for being here for today’s Bloomerang webinar, “The State of Recurring Giving.” And my name is Steven Shattuck, and I’m the chief engagement officer over here at Bloomerang, and I’ll be moderating today’s discussion, just as always.
And just some housekeeping items before we get started here, just want to let you all know that we are recording this session, and we’ll get you that recording this afternoon as well as the slides. If you don’t already have them, hopefully you already have the slides [inaudible 00:00:41] out earlier but if not, you’ll get both of those things this afternoon I promise.
So if you have to leave early, we don’t have to, but if you do, that’s okay. We’ll get you the recording, and you can finish up the session on your own time, I suppose. Most importantly as you’re listening today, please feel free to use that chat box right there on your ReadyTalk window. We’re going to try to save as much time as we can for QA. So don’t be shy. If you have a question or comment, as you listen along for the next hour or so, let us know and we’ll try to get to it. And Brady has even agreed to answer questions offline as well. Hopefully, we’ll be able to get to those.
You can also do that on Twitter. I’ll keep an eye on the Twitter feed @BloomerangTech, if you want to send your questions and comments over there. And one last thing, if you have any trouble with the phone audio, we find that the . . . actually if you . . . I’ll say that again. If you have any trouble with the computer audio, we find that the phone audio is usually a little bit better. So if you’re having trouble with your computer speakers, your browser or whatever, try dialing in by phone if you can do that. If you don’t mind, if it won’t, you know, bother a co-worker. Try that before you totally give up on us. There’s a phone number you can dial in, in the email from ReadyTalk that was sent out when you registered, so just search for that. And give that a try if you have any trouble.
And if it’s your first Bloomerang webinar, I just want to say special welcome to you folks. We do these webinars pretty much every Thursday. We literally only miss a couple Thursdays out of the year. We bring in a great guest. Today’s guest is no exception. For an educational session, if it’s something we do to give back to the nonprofit community here at Bloomerang.
If you’re not familiar with our software, we’ve got donor management software that’s pretty highly rated and our customers tend to tell us that they like it. So if you’re maybe in the market for that or just want to check out what we have to offer, visit our website. You can watch a video demo. We get people [sandbox 00:02:33] logins all the time if you want to get your hands dirty. Don’t do that now, because we’ve got a great presentation here coming up. But feel free to check that out later today or maybe later this week.
But for now, I am really excited to welcome today’s guest, someone that I’ve been following online for many years, talking to just sharing, you know, nerdy data with all the time. And I’m really excited to have him here to share some really cool research. We’ve got Brady from NextAfter. Hey, Brady. How’s it going?
Brady: Good, Steven. Thanks for having me.
Steven: Oh, yeah. I’m excited. A lot of people registered for this one, and I just want to back on you real quick. If you guys don’t know Brady, like I said, he’s a VP of Innovation and Optimization over at NextAfter. And if you have never checked out a NextAfter and never seen their website, please do. They are a really cool resource of information. They do lots of interesting data study. Some which you’ll see the results of today in Brady’s presentation. A very cool company. You may have heard him say they’re down in the Plano, Dallas, Texas area. So shout out to anyone listening from Texas.
And man, Brady is all over the place. He is a prolific writer and speaker. He has written or been featured in publications like CBC, Christianity Today, NPR, and The Chronicle Philanthropy, Huffington Post. He’s spoken at huge conferences including Social Media for Nonprofits, AFP Congress up in Canada, the CyberGrants Conference, and BBCON. Just a great guy too, and I’ve been following him on Twitter and keeping an eye on some of the giving and sign up experiments he’s been doing over the past year.
He is been really working hard, [signing up 00:04:13] for newsletters and donating to the nonprofits and just gathering data. And trying to share his findings to the benefit of all of you, so I’m just really excited for him to share some cool data research and best practices. So, Brady, already taken up way too much of your time, I think you’re going to do the screen share thing, but take it away. Tell us all about the state of recurring giving, my friend.
Brady: Sounds good. Let’s get into it. And thanks again for having me, always fun to be on. And thanks everyone for coming. So as Steve kind of mentioned, I am a charity nerd and will nerd out a little bit today. Here’s what we’re going to cover today. I’m just going to set some context for this research and study like, who the heck are we? Why recurring giving? And some background information on the study itself. And then we’ll dive into some things that we learned or I learned about recurring giving, the experience and then communications that you can try. And throughout, will have ideas that you can try and test. And hopefully a lot of time for Q&A.
And then just a couple tips that I found useful when I’m doing webinars or online learning is write stuff down. If you have a piece of paper, that’s great. Get it out to your brain, if it’s a question, it’s a comment, it’s an idea, if it’s like, “I got to get milk,” or whatever it is. Write it down and get out of your brain and then it allows you to focus more.
And then be curious, you know, ask a lot of questions. You can ask them in the session. There’s my email and that’s Twitter, ask questions are great. And then focus on the main concepts, I’ll dive into some, you know, specific experiments with some organizations and don’t get too bogged down on maybe that one experiment or who that one client is but try to apply the bigger learnings to yourself and your organization.
So who the heck is presenting? You’ve heard more than enough about me, and you’ve heard a little bit about NextAfter. We are research lab and a consultancy. And those two things work together. But the root of both of those is we’re trying to figure out why do people give. If we can kind of decode why people give and use the web as kind of a research lab of sorts, we think that we can then help more nonprofits raise more money, reach more donors, and grow giving and generosity.
But we’re at fundamental disadvantage or there’s a real challenge to understanding why people give and it’s this—fundraisers are for Mars and donors are from Venus. We look at the same thing like giving, but from very different perspectives. Right. We as fundraisers, we think that people come online to give. But donors, generally, come online to get. They don’t wake up in the morning and say, “Oh, I would love to give some money away today,” right? That’s one inherent difference that we have in terms of how we view giving.
And then that’s another big reasons is seeing the curse of knowledge. And this really plays into our communications and how we promote our value proposition is. We know too much, right? You’re passionate about your work. You’re in your work every single day, and so we speak in the language that often donors do not understand. It goes over their head or we use acronyms. And so, donors don’t always understand what we’re saying, so it creates this divide. And it’s one of the reasons why we do these research studies, like the one I’ll talk about today. Is if we can go out and make a bunch of donations or sign up for a bunch of newsletters, we can kind of have a better understanding of who donors are and experience from their point of view. And then from that, we can then shake kind of our work and marketing and fundraising communications.
But we also collect a bunch of cool ideas of what organizations are doing. And then we can put that into our experimentation, so we can get some insights and ideas that we can go in and experiment and test to actually understand what donors do, not just what they say. And that’s key if we’re really going to understand donors. So that’s our goal, is to try to understand why people give and that’s a bit of our approach.
So we do a lot of research with our clients and studies like this, and we try to give it all away for free. So research like eBooks then webinars, you’ve got online courses and some tools to help you run experiments.
All right. Enough about us. Why did we focus on recurring giving? Well, the short answer is something like this. Recurring donors are worth 5.4 times more than one-time donors over their lifetime. That comes from “The State of Modern Philanthropy” by Classy. But you can basically take a data source, and you’ll see that recurring donors are worth a lot more over their lifetime than one-time donors.
Yes, when I look out on the market, particularly in the U.S., I don’t see organizations that are really focusing on recurring giving. And I wonder why is that. Well, I think one of the reasons comes from Harvey McKinnon. He put it this way. He’s the author of “Hidden Gold” and kind of a forefather of monthly recurring giving. He said, “The single largest obstacle to successful monthly giving programs is buy-in.” I don’t know if we collectively get the buy-in within ourselves internally, with our bosses or our colleagues to really make recurring giving important and bring it to the fore.
So, before we get into what we learned, I just want to highlight a few reasons about why recurring giving is so good, to help you get bought in if you’re not, so get your colleagues and bosses bought in, if maybe them who’s kind of holding you back. So the first point is this, recurring donors are good for you, your organization. If we look at that kind of one-time versus sustainer or monthly donor over time, here’s looking at a thousand donors of each. You can see how this revenue gap just widens, and widens, and widens. And we’re to the point where recurring donors are worth significantly more over their lifetime.
And if you actually break this down by organization size, we can see something like this where recurring donors are 3.7 times more valuable for large orgs, but it goes to 12.4 times more valuable for medium, 11.5 times more valuable for small orgs. So another key point here is recurring donors are even more valuable for small and medium sized organizations, of which probably most of you on this call, on this webinar would fit into that small or medium spot. So there’s even more value of recurring donors for you.
And it’s a function of this, lifetime value. And now you might be saying, “Brady, I’m on a Bloomerang webinar. I know everything there is to know about lifetime value because they talk about it all the time.” And that would be awesome. Bloomerang is one of the best sources about lifetime value and donor retention.
So they’ll have a lot more, and they’ve got some nerdy ways of how you can calculate it. But fundamentally lifetime value has two levers. One is the amount that someone gives and the second is how long they give. So under amount given, there’s a misconception that monthly giving is only worth it, you know, years, and years, and years down the road. But that’s not really true. The average recurring donor gets 42% more in one year than those who give one-time gifts. That’s from Network for Good. So the average monthly donor gives more in a year, and they give longer because they’re more likely to be retained.
Here’s a graphic from Bloomerang from the 2016 Fundraising Effectiveness Project. If we look at the average donor retention rate, 46%. We all know that’s not great. It could be better. This is the most shocking statistic where 77% of first-time donors do not come back and make a gift again. Why that’s so important? As you can see, if we can get that second gift, look at the repeat donor retention rate jumps all the way to 60. But look at this, monthly donors give again and are retained at a 90% rate. Go have a party at monthly donors, right? So if lifetime value is a function of amount given and they give more in a year, and time giving, and they give more years, that boosts lifetime value. That’s what we’re all about, so we’ll have another party. Okay, every slide now is going to have confetti raining down on it. Just kidding.
Okay, so just in case that wasn’t enough, lifetime value. There’s a few other reasons why recurring giving is good for you. For example, relationship, because they give more frequently overtime, it allows you to get to know them better and build a relationship which can lead to legacy giving and planned giving. It’s a predictable source of revenue, especially if you’re a small organization knowing where that next check comes from is hugely important. This allows you to kind of predict cash flows and budget a bit better.
And there should be cost savings. You shouldn’t need to be spending all the money on acquisition or trying to recapture those one-time donors because of these cost effective giving platforms. So recurring giving is also good for donors. And for this, I’m going to go Bill Nye and go to some science. A couple studies from “The Science of Giving” book, which we actually used in our annual giving class that I helped teach at North Park University. So in this study they gave $120 to people and they said, “Here’s what you can do. You can give it all the way now, you can give it all the way later at the end of 12 months, or you can give $10 away for 12 months.”
And here’s what they found. Sixty-one percent of the people, more than twice the next closest, said they wanted to give it away $10 a month. And what doesn’t make sense is if you wanted to help the charity, you should give it all the way now. If you wanted to help yourself, you should give it all the way later. So the least kind of logical thing is to give it away in $10 increments. But it’s mentally convenient. Paying in installments, our brain just understands, $10 month, sure, easy, got it. So it’s this mentally convenient form of payment.
Another experiment here, they looked that happiness, so people gave different donations and then were asked how happy that made them. And what they found is that there’s this kind of diminishing returns graph of happiness and giving. So, the more that someone gave, it’s not like they became exponentially more happy. They actually became a little less happy. The most happiness is in this range, smaller amounts more frequently. Well, hey, that’s what recurring giving is. So recurring giving has its ability to maximize happiness and the perceived impact that adds up over time. So recurring giving is a high-convenient and high-impact way for donors to give.
And the last key point here is recurring giving is growing, and it’s growing fast. So from M+R Benchmarks, they saw that recurring giving revenue grew 40% last year. The Target Analytics group that tracks 38 different nonprofits and $2.52 billion of giving, they’ve seen 70% growth since 2013. And if we look at the for-profit side of things in this subscription e-commerce market, it’s grown by a 100% year-over-year the past five years.
And if you think about it, think about things like Netflix, or Blue Apron, or Dollar Shave Club, Ipsy Box, these recurring giving subscription, or these subscription e-commerce products are increasingly popular. So recurring giving is starting to grow rapidly and should continue to do so. And that in that McKinsey study that I referenced with the growth in e-commerce subscription, the main demographic is 25 to 44. So if you’re looking for kind of a key demographic well into the future, that’s a key one, and they’re likely to become e-commerce subscribers.
All right. So that’s why recurring giving matters and hopefully you know some of that. But hopefully, it can help give you some more ammunition to double down on the strategies as essential for your fundraising. So here’s what you need to know about the study. I’ll go through it really quick. We identified over hundred nonprofit organizations. There’s actually 115 to be precise from nine different verticals. So the average annual revenue is from like half a million to three billion. And the average annual revenue is about 180 million. So it definitely huge it a little bit to the larger size, and you can see the nine verticals there. So pretty evenly spread with a few more in disaster and international relief.
Then we went out to each of these organizations and made three donations. They made a one-time gift, they made a second one-time gift, and then upgraded to become a recurring donor after one month. And then another . . . in another donor we just became a recurring donor right away. We then monitored all the communications across four channels. So we looked at 500 and some letters, 4,000 and some emails, 83 phone calls, and six text messages. Over a three month period, this was . . . while we started in February and ended at the end of April.
We also wanted to see what happened when we reported the cards as lost or stolen. That’s one of the most frequent ways why recurring donors lapse. So we did that as well and captured it. And then we analyzed all the results. We cataloged the process about giving, we scanned every letter, and we put them in the buckets—solicitation, cultivation, and receipt—to try to score and get a sense of things across the market. So that’s what went into this study.
Now, for the rest of time, I want to focus on what we actually learned and what you can do to improve and optimize your recurring giving. So first part is the giving experience. Here’s some of the things that we learned. The first one is this, it’s not that easy to find out where to make a recurring donation. So we found that actually, 1 out of 10 organizations did not have a recurring gift option at all online. So the first idea here from Captain Obvious if you want to grow your recurring giving is have a recurring giving option.
We also looked at just making the donation, and so, how do we find it? So, we looked at the donation call-to- action and by far, the most people just said donate, 71%. But many organizations included in the study, it wasn’t easy to find this call-to-action. If you look at this example here, you know, we look in the top navigation and oftentimes it wouldn’t be anything that was really clear, and we got to scroll and dig, and dig, and there it is all the way at the bottom.
And here’s why it’s important. Here’s an experiment we did with Dallas Theological Seminary where here was their main navigation, the control. Here was the treatment. You can see we just added a purple button to support DTS. And then in the second treatment here, we changed the purple button to donate. And in this case, in the first case, it helped increase donation a 160% just by having that purple button. And in this case, the button with a donate call-to-action helped increase donations 190%. Just making it clear to a visitor where they need to go or helping kind of nudge people with some subtle design like a button. This is why it’s important.
So another idea is just try having a clear donate button in your navigation if you don’t. That should be fairly straightforward. But then we looked at, “Well, what are people doing to call out recurring donations?” and we said, we found that three out of four organizations do not have any separate call-to-action for recurring donations.
And here’s why that can be important. So this is an experiment with the Texas State Historical Association that was a membership organization. Here was their control or their main navigation. But members can either join or renew. That’s what people are kind of looking for. And so we said, “Well, what if we just split up those two call-to-action and made it easier for people to just join or renew.” And it helped increase traffic to those donation pages at 16%. Again, we’re just helping guide and make it easier for people to find what it is they want to do.
Or in this case, this comes from the Heritage Foundation. They have a membership monthly giving program as well, or here’s their control. In the treatment here, we just took over a little bit of their homepage and had a value proposition about why you should become a monthly donor or member. And in this case it helped increase donations to 46%.
Here is a great example that we had in the study, it’s Food For The Hungry. If you look at their top navigation here, the other calling out, “sponsor a child,” it’s bigger, got a different color. It grabs your eye. So, if you’re looking for, it’s easy to find. And if you’re just kind of, “What should I be looking at?” It will guide you towards that. So another thing to try is add a specific call-to-action, or button, or take some space on your homepage even to kind of move people towards recurring gifts in your navigation and homepage.
All right, folks, one things we learned, here’s another one that we learned. Is that, it’s not very clear why become a recurring donor. This is the proposition question in online that every organization needs to answer because this is what donors are thinking, whether they’ll tell you that or not. This is kind of what they’re thinking. Why should I give to you rather than another organization, or not at all? And it’s that last option that we rarely consider. They do not have to give. They definitely do not have to give, right?
So how do you answer this question? When it comes to recurring giving the question looks more like this. Why should I give a recurring gift to you, instead of a one-time donation, and rather than some other organization, or not at all? We have to communicate why or the value. So we looked at how did they communicate the recurring giving option? And it was kind of all over the board to be honest. We couldn’t find like one specific way that most organizations did. So we tried to kind of bucket them into these four approaches. So we had simple, first person, value prop, and creative. And so, by far, the most organizations, about 68% did the simple approach, which is something like this. You know, you go to click donate and they just kind of have a toggle button or as an option to just make it monthly.
So now if you visited this page, how would you answer this question if you were donor? Did you get anything that helped you answer that question? Unless you’ve already made up your mind that you (a) want to donate, and (b) you want to give monthly, there is nothing being communicated in that donor experience that makes you think you should make a recurring gift. Or just give to that organization at all to be honest.
So this was an issue when we looked at value prop. Only nine organizations tried to do anything in the way of a value proposition of why you should make a monthly donation. Here’s a good example or a decent example from the ACLU. The one just under general case for support of their general value proposition, they have a good title here, and a name for their donors. Join the ACLU. They have more copy with some bullets about why you should give and how. That’s a visual reinforcement. Our research shows that that can go either way. But then they have some social proof, which is generally a good thing. No one wants to be the only one doing something.
And then when you get into the donation side, here you can see the gentle little nudge about monthly giving where they’re saying, a monthly gift does even more to protect civil liberties. Reinforcing the mission and nudging you toward a monthly gift. Something as simple as that can help move the value proposition question or answer it for a donor.
So some other examples we saw, “A monthly gift is the best way to stand up Trump’s agenda.” “A monthly gift shows your commitment to care, support, and research.” Or, “Please support the poor every month. Efficient, convenient, and flexible.” Those are pretty simple options to just communicate value. Here’s why communicating value largely through copy or text is so important.
This is an experiment at the Illinois Policy Institute, where here was their main donation page. Pretty standard looking donation page. And here was the treatment page or the experiment that we ran. The big difference here as you can see on the left, there’s really no copy. There’s one sentence and then some social media icons and then on the right, we actually took some time to write out why someone should give. Just by adding that copy, it helped increased conversion rate or donations 150%.
Even if someone has made up their mind, your copy and what you communicate can reaffirm why they should make this donation. The vast majority of people don’t know. You have to tell them and communicate it. So this is something I strongly suggest you try, adding value proposition, through copy, you can try different types for recurring giving on your donation page.
One of the other things we kind to looked at was, did an organization prompt donors? So instead of just allowing the option, did they kind of do something that was maybe a little bit more aggressive to kind of force the decision on the donor? And we saw only about 14% of organizations tried this. And it looks, some simple ideas like this where there’s actually a toggle button that made you say yes or no as opposed to like a passive checkbox or something more complex like this, like a pop-up that would come up right as you were about to complete a one-time donation. This pop-up would come up and tell you about the value of making a monthly gift and you could switch.
So we thought that was actually pretty interesting. You know, why would you want to take someone away from a one-time donation but, you know, maybe this could work. So we actually ran this experiment. We ran this with folks from a family in the U.S. And on the left is their normal donation. And then on the right, this was a pop-up that came up right when people are about to click, complete their one-time donation. It went to 60% of whatever their one-time gift amount was, or a minimum of $15 a month.
And by adding this prompt, helped increased recurring gifts 64%. And the key point here is the pop-up did not significantly impact the likelihood of a person giving a one-time gift. So the one-time donors, just kept on going. We were able to get even more people choose, “Yeah, I do want to make a return gift.” So that was actually on just one page. We ran this on their whole site through all their donation pages, and we saw something similar, an increase of 24% in recurring gifts. And again, the pop-up did not significantly impact the likelihood of a person giving the one-time gift.
The concept at play here is the thing called cognitive momentum. If you think about like a rocket ship taking off, which I will never ride a rocket, and I’m not an astronaut. But the hardest part is taking off, that’s where all the energy and, you know, fuel and everything goes into. But once it’s kind of in motion and in space, it’s actually relatively easy to just move a rocket ship, right? An object in motion remains in motion. And it’s the same thing for us as we make decisions. The hardest part of getting someone started and then once their started, it gets a little bit easier.
So we talk about a donor mountain at our organization as opposed to a donor funnel. Again, no one just wakes up and says I want to give money away. But moving up the donor mountain, we have to use our email or our advertisement that leads to say like, our donation page, which leads to the donation form. And all these things work together to keep that momentum going because at each little stage, “Should I open this email, should I click this email, should I read this landing page, how much should I give?” Donors are evaluating the value and cost subconsciously of whether or not they should do this.
And so, the prompt just kind of once they’re in motion, they’ve already said, “Yeah, I do want to do this.” The prompt keeps them in motion and presents another opportunity as opposed to coming right in from the get-go and say, “Do you want to give every month for as long as your credit card remains valid?” That might scare some people, but if we can get them started by saying a little yes, and then is there some opportunity there to kind of move to recurring giving.
So cognitive momentum is the principle at play here and maybe try adding a prompt for recurring gifts before one-time donation completion. We cover a cognitive momentum and this kind of approach in our landing page course, which is free. You can check it out at that URL.
All right. So another thing that we learned is it actually wasn’t that easy to set up. So if you found it and you wanted to do it, wasn’t easy to use to sign up or to set it up. So we ended up getting blacklisted by quite a few organizations because we were making a bunch of gifts. And not everyone is making, you know, 345 donations through some similar credit cards. But if you think about things like Giving Tuesday or year-end, or giving days, there are people making multiple donations to different organizations and they might be getting blacklisted. So it’s a good principle that’s maybe, you know, gone awry.
We’re asked for some really personal information that seemed kind of irrelevant like our spouse’s name. I’m not sure why they needed to know that. And so, it’s also extra information that was kind of odd. We had to answer some weird, confusing questions, like in this case, would like agency location. We had no context for what agency location meant, yet it was required. So there wasn’t a lot for us to go off of. It’s confusion. The point of confusion friction what we’ll call, what we call it.
And we had to make commitments that we didn’t understand like this. I declined benefit. I don’t know what the benefits are that I’m supposed to be declining or accepting. So, yeah, I don’t know, confusing again.
But one of the worst things that we found and I actually just found just yesterday when talking to a possible client, was the amount of times we had to prove that we were a human. We had to do this “I’m not a robot” thing. So I don’t know how many robots are like, you know, scouring the worldwide web to make charitable donations. But apparently is something we have to fight against. So then you have to do I’m not a robot and then you get this pick sign game and it’s like, is that a part of the sign, or got a pole, or I don’t really know, and you get it wrong, and you get it again. It’s very frustrating.
I think about a donor going through this before they make a gift, right? It’s not a great experience. And every time I think of this, I think of a stand up bit by John Mulaney that I talked about. “The world is run by robots and we spend most of our day telling them we’re not a robot just if you can log on and look at our own stuff.” It’s pretty funny, but it’s also not safe for this webinar. So check it out on your own time.
So does this even matter, right? These forms, confusing questions, does it even matter? Well, the answer is yes. Here’s an experiment from the Research Library where we took the exact same form on the left and just laid it out differently on the right. So we use horizontal space so it looks easier on the eye, less mental friction helped increase donations is 40%. On this case, the only difference was here. There was a cellphone as a required field, decreased donations 43%. It causes anxiety maybe. People go, “What are you going to use my phone number for? Are you going to call me every day? Are you going to text me? I don’t know what you’re going to do it.”
Or we often see donation tools that have a confirmation page, so you click donate and then it kind of says, “Are you sure you want to complete this?” And we said, “I don’t know if that’s really smart. What if we just took that out?” And just by taking out that extra step, helped increase donations 176%. These are friction points and forms that are unnecessary, and if we can remove them, we can improve the likelihood that someone will make a donation.
Now, here was one neat example from an organization in the study where . . . once you start filling out your first name, it just expands, just kind of show you some extra fields. They did the same thing for payments. Again, it’s a way to limit that kind of mental friction, so it looks easy. And then once you start, you’re more likely to complete. So try removing these confusion, confusing unnecessary form fields and donation steps, whether it’s for one-time or recurring. We actually have a little tool that you can use to help, so you can go and make a donation. You can take this friction self-assessment. There’s 20 questions that you can say yes/no to and it’s kind of give you a score and suggestions. It’s at nextafter.com/resources/#tools.
All right. The other thing was not all payment types were equal. It looks like my graph isn’t going to pull through here. Oh, there we go. So we looked at payment types. So by far, every organization that expected recurring donations accepted credit cards. And this is surprising, only third accepted EFT or ACH or automated bank payments. This was surprising because of information like this. Where that Target Analytics group found that the retention rates with EFT donors was 4% higher than credit card donors, because credit cards get lost, credit cards go expired and people move, they get divorced, and things happen with their credit card. Less things happen with their bank account.
A bank account is open on average for 16 years according to Bankrate, so it lasts longer. And it has no impact on one-time giving. So here’s an experiment we ran where we just added the EFT option as a payment method, and it helped increase lifetime value of 55%. And again, no significant difference in conversion rates, so there’s very little downside if any. It takes a little bit to set up. It’s not the easiest. But it’s got lower fees, and it helps increase lifetime value. So it’s one of the things that we suggest you should try. Here’s is an example of what that could look like where people can say pay by check. Bank information, account and verify, boom, it’s setup. So try looking at an EFT/ACH payment option for your recurring giving.
And then the other thing that we saw was there wasn’t much to do after a donation. So we just donated. Well, now what? Well, the first point here is that roughly one out three organizations did not suggest anything for us to do after we made a donation. The majority of organizations that did do something was the social share. And here was the opportunity missed in our opinion is that things like employee match, make a second gift, or upgrade your gifts, very few organizations were taking advantage of that. Again, if you think about cognitive momentum, “I’ve said yes to your organization, I’ve gone all the way through all that friction and said I’m not a robot and made a donation.” I’m invested in your cause now. I’m in momentum. What else is it that I can do or would you like me to do or do I want to do?
Here’s an example from Alzheimer’s Association where they had two calls-to-action, which generally isn’t advised. But they talked about an employer match, which is something that’s pretty easy for people to do. There’s tools out there that make this easier. And then they also talked about an upgrade, or do you want to convert into a monthly donor, and here’s why. The key thing is they explain why.
So using the confirmation page to kind of continue a donation experience is something that we do a lot with our clients and in our research. And we found that 10% to 20% of donors will give a second gift immediately if prompted. And the process is made easy in this value proposition. So right after they made a one-time donation, the 10% to 20% of those donors will go on and make a second gift right away. This again, it’s that cognitive momentum idea of things. So one of the things you can try on your confirmation page is ask for a recurring gift on that confirmation page. But again, you have to answer that question, why should they give it recurring gift to you as opposed to one-time donation and rather than another organization or not at all.
All right. So, there’s the recap of some of what we learned. It wasn’t that easy to find, it wasn’t very clear why we should, and it wasn’t very easy to set it up. And there wasn’t much to do after donation. These were the seven ideas that I shared. I won’t go over them all. Hopefully, you’ve been jotting them down but if you watch the recording, you’ll get the slides later. You can get them from there.
All right. So that was on the giving experience side. Now, we’re going to talk more about what we learned on the recurring giving communications, right? Because we tracked all of it for three months. Here is the first thing. Recurring donors aren’t treated that differently. So 38% of organizations in the study did not change their email strategy for recurring donors at all. And email was by far the most used channel and touch point. So, when you take not a ton of change times a ton of volume, the donor experience didn’t feel that different. When we look at channel frequency by donor, so we’ll compare one time to recurring. We saw that recurring donors got about 10% fewer email. They actually got about 60% more voicemail. We didn’t get a ton of voicemail, so small sample size. This one, I still don’t fully understand, but they got 44% more direct mail, and then 50% less text messages. But again, very small sample size.
So that’s that was kind of channel, touch points by channel or organizations by channel. But we also looked at message types and we broke them into three buckets. The receipt, this is more transactional, just acknowledging the gift. A cultivation, this was basically anything that wasn’t a receipt or a solicitation but the primary focus was on something other than fundraising. And then solicitations, so this is where the primary purpose was to generate support or donation. So what we found is that the recurring donors actually received fewer solicitations over the three months. And receive more cultivation, which I think is good, right? They’re giving every month already. They should receive your solicitations and they should receive more cultivation. So that’s generally good.
But when we started looking at the chart over time, we saw something like this. Whereby month three, the number of organizations that were sending cultivation was starting to go down and the number of organizations that were starting to send solicitations was going up. So that’s a worrying potential trend as time goes on perhaps, those two things kind of intersect and maybe they go on to be treated differently than a one-time donor.
So we also looked by volumes. For the first chart was about organization. This was just by volume. And we see another similar trend line where the number of solicitations are going up and the number of cultivation touch points are going down. So the worry here is that there’s some immediate plan for how do we treat recurring donors differently than one-time donors maybe in the first month or so. But as time goes on, a concern on what the trend potentially suggests, again, we only did three months of this, is that over time, they kind of just get thrown back into the general pool, right? They get treated just like any other donor in terms of how much they get solicited and how infrequently or frequently they get cultivated.
The one thing to try here on your communication side is look at a longer term plan specific to your recurring donors. They are as gold. They give every month, they give more in a year, they get more over their lifetime, and having that separate communication plan is one way to ensure that they’re engaged and treated properly like the gold that they are.
All right. We also looked at numbers of organizations like communications type. And we saw that only nine organizations were actually sending a receipt or an acknowledgement in the third month. Now, why that’s important is it you remember this kind of science experiment where happiness was from giving smaller amount more frequently. Well, if they don’t acknowledge the gift or it just runs off their bank account and they don’t even know, they can’t get the reward from actually giving every month. So one of the ideas here is to actually communicate more often and whether you send an official receipt or not, acknowledge their gift more regularly so they feel the happiness.
One of the reasons why we don’t and we’ve heard this from people is like, well, we don’t want them to stop. We didn’t want to tell them that they have a recurring gift in case they stopped. And to me that’s the wrong approach. That means we’re treating donors like this. This is my cat Thor who is not very nice. That’s a very apt picture of him. Where we feel like, you know, donors are going to bite our hands off if you talk to them or mention that they’re a recurring donor. Let’s just leave them alone and run their credit card until it expires or they die or something like that.
I think we need to treat donors like this. This is my dog Melly, who’s just quite a love fluff ball, Bernese mountain dog, who just eats up everything. Do we think donors don’t want to give, and we’re convincing them to like begrudgingly part with their money? Well, then we’re going to treat them like that cat. If we think they believe in what we’re doing and we’re helping them live up the values, we should treat them more like this. And I think that needs to make its way into our receding and communication and acknowledgment plan.
So one thing to try, is try sending a thank you or a receipt every month. Doesn’t have to be the same thing, doesn’t have to be in print, you don’t have to send the receipt. The idea here is they give every month. Are you acknowledging them every month or frequently enough? A once a year statement thing, “Oh, thanks for giving all year long,” I don’t think cuts it.
All right. Another thing we saw is phone and text were not used very often. I mentioned this before. But only 15 organizations, sorry, called us, and only two sent text messages. So what’s interesting here is there’s some research out there, this is from Penelope Burk in the Donor-Centered Fundraising. She found the donor second year value could be up to 40% higher, if they received a thank you call within 24 to 48 hours from a board member. So the power of the phone to kind of stand out and be personal can have a significant impact on someone’s second year value or likely to be retained. A pretty simple thing to try is just try calling or texting your donors to say thank you.
So one of the reasons and one of the things if we’re wondering is like, “Well, why was there so little usage of the phone?” And part of it is, some people weren’t collecting it. So, one out of four organizations were not collecting the phone number, which kind of makes sense if, you know, I mentioned this study earlier where adding the cellphone is required, decrease donations 43%. But what we found is just by making the cellphone field optional on forms, often has no significant difference.
So the more that you make required, the more the donors feel like they have to because they have to. And it raises these questions where it’s just optional. They can choose to give it or not. So if you are going to collect phone numbers, if you have a strategic plan for how you’re going to use it, try making that optional as opposed to required, otherwise you might be losing a bunch of donors that you will never be able to call because they never gave. Something to try there.
Another thing with communications, we’re not very personal. So 9% of organization did not send us any communication in a monthly donor, nothing. So again, Captain Obvious coming in here to try communicating with your monthly donors if you’re sending nothing. And that was over a three month time period as well.
Another thing we saw, 13% of organizations didn’t send cultivation content of any kind to any donor. Captain Obvious coming in again and try cultivating all of your donors. And just one in five organizations ever sent a message from an address representing a real person, so a person’s name. The vast majority came from people who are like info or generic type of senders. We also got a lot of communication that looked like this. So here’s an email subject, Donation Form Acknowledgement. Maybe it’s that robot coming back, and it was sent from donorreceipt@.
The worst email that we’re not best, so things like this. “Friends, big hearts like yours . . . ” Like, we’ve given you our name at least once, why are you calling us friend? And the subject, who it’s from in this preview text part, are hugely important to why people even open email. This is a research study by Litmus and Fluent, they looked at why do people open emails or how do they triage their inbox. Sender or from name is the most important thing that people look at. Not subject line, not preview text. Who it’s from.
So here’s some experiments from our Research Library or one where instead of sending it from the organization, you just send it from Kent, the person, helped increased open 28%. This is a general thing that we found is sending email from a person as a person helps increase open and engagement. So try sending your email to one person, not an organization.
The same kind of concept can apply to things like subject line. So here we have “Moms = The heart of CaringBridge,” pretty marketing versus something like, “You amaze me, Jeff,” which is a lot more personal, using word “you,” helped increase open 137%. We found that “you” is kind of a secret word. I mean, we know this in direct mail, but it applies to email. Just by using “you” and “your” references in subject lines can help increase open rates.
And calling people by name. Here’s a text where the only difference here in this email is on one we didn’t have their name and another we said, “Hi, Jeff” or used their name helped increase clicks 270%. So try using people’s first name or at least their full name if you have it. This is important. Fundraising is personal. It’s relational. If we don’t mention their names, we don’t talk to you or them, then how is it personal or relational.
Why is this important? Just a couple experiments again from the Research Library. On the left we have kind of a classic, kind of templated email right with the preview text, then the header image, text buttons and sign off. And on the right, spoiler alert, I just gave it away. But on the right, we took out a lot of the design elements, left the buttons. It helped increase clicks 80% and donations 112%.
We said, well, this feels more personal. What if we took that even further and we run a follow-up text, so we got the kind of winning email, which is now the control on the left. And in the treatment, we actually pulled out all the design elements. We took out the button, and we moved the logo and made it smaller and moved it to the bottom. And in this case it helped increase donations to 145%.
If you actually look at the copy, I won’t dive into this too much. But if you go through it, after we reduced the logo, the call-to-action was not a button. Friends don’t send friends buttons. For call-to-action, they use links. But if you dig into the copy ,we had a more personal relevant salutation. On the left, there was, you know, “When the world has been turned upside down . . . ” like this preacher message, where on the right it’s like, “Hey, I know you’ve been using CaringBridge, which is our site,” right? It’s more personal and contextual, and if you actually get into it further on the left, it’s still kind of preaching into a story on the right like, “Hey, right now we’re on the short campaign to raise money for you, those like you.” We’re talking to a person as opposed to preaching at a person.
So when you kind of add it all up, this more personal approach helped lead to this significant increase in donations. People give to people not email machines. That’s a principle that we believe. It’s something that we’ll teach and train a lot because that’s what our research suggests. It’s all in our email course as well if you want to learn more about that. And then customer service emails, we found the same thing. The vast majority of customer service emails to get back a lost card, were transactional and not personal, or a cancelled card 82% were transactional and not personal.
And what’s interesting is every single email that was sent from a person went into the inbox tab. We’re using Gmail for this research, as opposed to promotions or spam. So even if all you wanted to do is get in the inbox, we should be sending it from a real person as opposed to a transactional-focused email. So try making your customer service emails’ look, sound, and feel like they’ are from a real person.
We found this in other channels too. We got phone calls saying like, “Hi, my name is . . . I’m a paid caller from vendor.” That’s not a great way to say thanks. I know there’s some, you know, things that you have to do when you’re doing a paid call but if it’s a thank you, you don’t have to do that. And in the mail here we go, “Dear friend,” Dear partner,” we’ve got account numbers going on. It didn’t feel personal, like you don’t know who we are. People give to people not email machines, but the principle is people give to people, period.
All right. The last thing that we found or at least that we’ll cover today is customer service leaves much to be desired. I already covered some of this on the communication side. How few organizations were receding, or sending cultivation, or didn’t send us anything. And the majority of communication didn’t feel very personal. And this is why it’s important. Roger Craver, who’s the editor at The Agitator, great blog, did a bunch of research for donor retention book. And they found when it comes to improving lifetime value, again, it’s that main metric, confetti, celebration. The tactics, techniques, and frequency of activity from the fundraising department or kind of the asking side of the house, accounts for less than 20% of the ultimate value on a donor file. The vast majority come from the customer experience and ongoing communications you provide. If it’s not there, if it’s not personal, you will be losing donors and losing lifetime value, and it’s not about how much you asked. It’s about other things.
So that’s a customer experience side of things. So what happens when we lost, a reported lost or cancelled credit card. Well, the good news was two out of three organizations were able to automatically update the cards without any intervention. So their payment processing tool just updated it, which is great. So you should use those payment processors and talk to your providers and see if they have that feature does it seamlessly. Great, because 75% of the organizations who didn’t automatically update the card, did nothing at all to recover it. They didn’t call us, they didn’t email us, they just let it go off into the distance with nothing happening.
And we were reported as canceled and when we canceled the card, just under half, actually, did not reach out at all to get a new card in that analysis window. So here’s the book side-by-side .So what this indicates is that was not really a response plan or that the plan is in place but it’s not getting information quick enough about a card that’s been cancelled that’s been lost or lapsed.
And one of the things here that’s going on is that, if you can’t measure it, you can’t improve it. And so, this isn’t what research suggests. This is what my experience would suggest is that if we’re not really measuring these things, it’s hard for us to improve them or we can’t make one person own this. If you said our goal is to reduce this and you’re in charge, Jonathan, things will change. So again, it needs to rise in importance to get that buy-in.
All right. So, some of what we learned about recurring giving communications. Recurring donors weren’t treated that differently. Phone and texts were not used very often. Communications were not that personal. And the customer service side leaves quite a bit to be desired still. Here were six of those ideas that I mentioned. Again, I won’t go over all of them. You can try to text or experiment with those.
And if you want to go deeper on the study, you can get this whole study with all of our research and insights at recurringgiving.com. It’s got more on the gift arrays and premiums, some things that we didn’t talk about, and it’s got a lot more ideas of things that you can try and test. You can also benchmark yourself at this site, so that’s the URL. You should be able to find it from recurringgiving.com. But you can actually go in and make a donation to yourself and go through the same methodology that we did. Do the same kind of thing, choosing the yes and no questions. It will tell you how you did compared to others, we’ll try to give you a grade and even chart you out compared to your gift arrays and things like that. How you compared to other organizations. So that’s where you can check it out.
And if you like this kind of like nerdy research optimization stuff, we’ve got a conference coming up where that’s all that we’re really talking about. We got some great people from for-profit, nonprofit, and two in particular manager of Demand at Charity Water and senior manager of Retention at Compassion. They will both be talking about recurring giving as well.
So if you want to come on down, check it out niosummit.com. You can use the code Bloomerang and save 300 bucks. And that is all that I have for today. You can find all of our stuff in nextafter.com. That’s my email if you have other questions, or you disagree, or something like that. And I think we have at least 10 minutes now for some questions.
Steven: We do. Thanks, Brady. That was awesome. Just want to say thank you, first of all, for not only gathering all that data, which I know is a monumental task, but thank you for coming on and presenting it. Really cool stuff. Can’t say I’m super surprised by some of the things you found. But really interesting insights. I loved the ideas you gave people, especially, you know, making phone number non-required, stripping out all that the design elements. So, yeah, follow Brady’s advice. Try some of those things. I mean, you never know until you try something, right? So thanks, Brady. That was really, really cool.
We got lots of questions, probably more than we can get to in 10 minutes. But I’m going to kind of combine some similar questions here, Brady. A lots of people are asking about other sort of time horizons for recurring gifts. Did you encounter anyone else asking for things besides monthly? Did you see quarterly, annual recurring? Like is that a thing where you make an annual gift but it . . . then automatically charges every year? Is that something that you see, recommend? Any thoughts on that?
Brady: Yeah, it’s a good question. It is something that we captured. I don’t have the exact numbers in front of me. There was about six organizations I think that asked for something that wasn’t monthly and recurring. And I think there was only one that kind of had an annual. Most often you’ll see the annual things for like membership organizations. So people can choose to renew their membership annually as opposed to monthly. You really don’t find that a lot for kind of the average donor or non-membership based organizations.
I don’t have or we don’t have any research that would show, you know, like a quarterly pledge is better than not. That’s definitely something we’re trying though because, you know, potentially someone would say a quarterly basis works better because of their business or because of who they are. And it operates on the same principle of that makes a decision once and it goes on. Maybe they can do larger amounts. I think monthly is more common, so, you know, that’s what we found at least, you know, the vast majority did it. So it could be something we’re trying. I haven’t seen any research that says it’s worse. I haven’t seen any research that says it’s better, so you could try.
Steven: Okay. Cool. What about a lot of people also asked along the same line about like branding the monthly giving program like calling it something like, you know, Circle of Hope or some, you know, giving a kind of a name almost like a giving society. Is that something you saw and would recommend, or do most people to say, you know, join our monthly giving program, join our sustaining giving program, kind of and in between brand name I suppose. What do you think about that?
Brady: Yeah, another great question. About 24% of organizations had a named program of some kind. Meaning like, you know, Circle of Hope or something like that.
Brady: Now, whether or not you should do that, again, I don’t have the research. We haven’t ran that experiment. I think the logic behind naming it is sound. Meaning you’re trying to, again, if the answer is why should be make recurring [inaudible 00:52:58] one-time gift. Have you named programs, can that committee help answer some of that either in the name or just kind of helping it stand out? It gives you something different than like recurring giving to use like in a call-to-action perhaps, [inaudible 00:53:11] the program, especially if it’s named well.
And if you’re trying to treat these owners differently or maybe build some community or use some exclusivity, I think all of those factors are generally good and it’s a little bit easier if you do have a named program. So I think there’s some good logic to it. I can’t advocate for it with research. I know that my default when I had my own agency was we did do name programs because I thought and still think that is a better approach generally speaking, but that’s not research-backed that’s just, you know, Brady-backed.
Steven: Yes. Well, I trust Brady-backed, for sure. And it seems like it aligns with your advice of, you know, advertising it or in a way that provides value and a reason to do it. It seems like that kind of goes along with giving it sort of a special name. So that makes sense to me.
Lots of people asking about age, Brady. Any data on likelihood that a donor of a certain age would be more likely to opt into a recurring giving program? I can’t think of anything I’ve seen that lends itself to that. But curious if you’ve had any experience there?
Brady: No. What I would say is generally monthly giving is accessible for every age demographic.
Brady: Especially like, again, you look at the subscription e-commerce, which is generally a little younger. The people growing up, we just have Netflix, and Dropbox, and like everything subscription-based, so, why would giving to my charity not be subscription-based as well that. You know, it’s kind of a natural concept for younger donors.
Brady: And traditionally, older donors have been kind of the gold mine. So they would mail checks in every month. And that was more of a sense of kind of tithing, or duty, or regularity. So I think it’s accessible to pretty much every age demographic but for pretty different reasons. You know, why they would do it is different, but the transaction method is very accessible to different age demographics.
Steven: It makes sense. Upgrade, let’s say you’ve got monthly donors. They’re all given $10 a month. How do you approach the subject of moving them from maybe $10 a month to $15 a month? Is it just a matter of asking? It seems like probably most organizations don’t think to ask. Is that probably the biggest barrier, just trying it, or maybe there are other ways to broach the subject?
Brady: It’s a really good question. One, it wasn’t part of this study, right? We did it three months, and this is more like just setting it up and converting was the initial experience. So we don’t have any, you know, research on upgrades. We haven’t spent a lot of time focusing on upgrades. So what I will say and this is more of a strategic/philosophical view, (a) you don’t get what you don’t ask for. So if you’re interested in upgrading, for sure, you have to ask, right? That’s definitely part of the case and you always have to communicate the value of why. Why do you need an extra five months, or why five bucks? Why should they give five bucks more a month? Can’t be just, “We need another $5, please.” Like, that’s a terrible upgrade strategy.
So that being said, I personally think that we spend too much time and trying to squeeze more out of the stone as opposed to finding new resources or new donors. So instead of trying to, you know, maximize more of how do we move a 30 month donor to a 35 and a 35 to a 40, how can we spend more time finding a brand new $38 a month donor? Or turning as $20 one-time gift donor into a $15 a month recurring donor? To me, that is a much higher growth strategy. It fits more with honoring a donor, right? If we said, “Please, join our program at this month.” And then three months then we’re saying, “Hey, it’s actually 10% more, pony up.” Like, there’s something philosophically that rubs me the wrong way, and I’ve had that happen. The child sponsorship organizations in particular.
Brady:So my general view is a better upgrade strategy is, like, honor and thank the crap out of them for being a monthly donor. And then potentially provide a different opportunities to give. Could be the matching thing at year end, a related gift to the program, so what’s child sponsorship programs often do. You know, it’s their birthday. Do you want to do a one-time gift? And we’ll get, you know, notebooks or something. I think that’s a better donor-focused value-oriented way to get more money out of a current donor as opposed to just asking for five bucks more a month.
But again, this is more of my personal philosophy. And the general idea is, we need to be better at finding new donors. If we’re just squeezing more out of the donors we have, we’re all screwed. So not to say you shouldn’t do that, but I see a disproportionate amount of time focus on upgrading as opposed to acquisition or conversion.
Steven: Makes sense. Well, we’re coming up on one o’clock and I want to be respectful of everyone’s time. Any last bit of advice, Brady? What should people do this afternoon? Maybe donate to themselves and kind to see what their process is like, probably for the first time in some cases.
Brady: Yeah. I say download the study because it has a lot more [inaudible 00:58:22] some of the questions that you have. But I think that idea of signing up your own emails, making donations to yourself, or setting up recurring gifts is unbelievably useful. What’s tough is that you’ll still do it with your own kind of donor-centric lens. So you’re not unbiased, but some things like the forms fields and maybe you’re asked to be a robot. Do you have a value proposition? You know, some of these things you maybe don’t even know. And that’s fine. I didn’t know that when I was a marketing director.
So, you know, that’s one of the principles I say all the time. You should be signing up and making a donation to your organization every single quarter. And just seeing what the experience is, or give 25 bucks to your friend and tell them to do it screen grab at all, or something like that because too often, you know, a year goes by and it’s like, “Oh, crap, have we’ve been doing that for that long?” So I think that’s a great suggestion. You can download the study and then maybe commit to trying one thing. Whether you run an official experiment, you remove a form field, you add some copy. Just commit to doing one thing differently that you think can improve and optimize your recurring giving program. Start with that and see where that leads.
Steven: I love it. Man this is awesome, Brady. Go to recurringgiving.com, right? That’s to get the study?
Brady: That’s correct. Yes, full.
Steven: Yeah. And go to the NIO Summit also. Got a coupon code for you, coupon code Boomerang. $300 off, that’s pretty good deal I would say. So thanks for doing that, Brady. And thanks for being here. This was really cool. I really appreciate all of the advice. It looks like people . . . based on what I see in the chat, also enjoyed it. So awesome.
Brady: Yeah. Thank you. Thanks for having me.
Steven: Thanks all of you for hanging out today, for an hour out of your day. I know you’re probably busy, so it’s always good for you and for me to see you all joining us every Thursday. But like I said, at the top, look for an email for me. I’ll be sending out the slides and the recording later on this afternoon. So I’ll get all that good stuff in your hand. I know we didn’t get all the questions, so I told Brady we’d get him the questions. He may reach out to you individually if we didn’t get to your questions, so be on the lookout for that.
And we’re going to send you a little survey afterwards, so don’t be shy. Let us know how you thought of it. I don’t think you’ll hurt Brady’s feelings. But we’re always looking for a feedback. So appreciate all your being here. We’ve got a very cool webinars coming up ourselves here over the next few weeks or so. We got one next week, of course, next Thursday same time same place. We got Tammy Zonker, an awesome consultant, super smart, one of our favorites. She’s going to talk about how trust can inform your fundraising efforts. Not something we see a lot of, we focus on a lot of other things, and not so much trust. So check that one out. It’s a good session. I’ve seen her give it live, definitely worth your time with your hour. So register for that.
If you can’t make it or maybe that doesn’t quite tickle your fancy, check out our webinar page. There’s lots of other sessions you can register for. So, hopefully, we’ll see you next week or some other week in the future. So we’ll call it a day there. Have a good rest of your Thursday. Look for an email from me. We’ll talk to you again soon. Bye now.