Sustainer Donor Value

We recently did some analysis on a client’s sustainer or monthly pledge donors. The client wanted to see how much donors were worth AFTER joining the monthly pledge program compared to their value BEFORE joining the program. While this wasn’t a test and we can’t directly prove cause and effect, we do find that the donors were worth $52 more – a 24% increase – after joining the monthly pledge program. If those donors stay on the program and maintain that difference in value, that’s an additional $260 over five years for every donor that joins the monthly giving program. So, maybe that means that they can afford to invest a little more in converting annual donors to monthly pledge donors. If they get an additional 200 donors to become sustainers each year, that’s an additional $10,000 each year. So, that’s $50,000 over 5 years. With an additional 200 new sustainers EACH year that’s $150,000 cumulative over 5 years! So maybe that means the organization can also spend a little more to cultivate and thank those donors once they become monthly sustainers. Even with a welcome package that costs $10 and another $10 invested in cultivation each year, that still leaves the organization with an additional $200 net per donor over 5 years. Pledge donors are more valuable. Are you treating them that...
Disaster Donor Retention

Disaster Donor Retention

As our managing partner Bill recovers from Hurricane Matthew, it’s a good time to look at the trends of new donors who respond to natural disasters and their following year retention – or lack thereof. Below is a graph for a social services nonprofit in an area hit by a natural disaster in FY13. This graph shows the number of new donors acquired each year. There was an 88% spike in the number of new donors in FY13, then a 58% decrease in new donors the next year. Here is the overall retention for the same organization. Their overall Retention dropped 12%, from 53% to 46% in the year after the disaster (although retention recovered nicely in FY15). And in FY14, Second Year Donor Retention dropped 30%, from 26% to 18%! Often, there’s little that can be done to increase these new donors’ retention. They are motivated to give by the disaster and may not be converted to give to the organization’s overall mission. In surveys, many donors don’t even consider themselves donors TO the organization, but instead to the event. “I gave to Hurricane Matthew”, NOT “I gave to XYZ Organization.” Still, these donors should receive all of the stewardship that COULD make them convert to a long-term donor: prompt thank you letters thanking them specifically for their gift to the disaster (not a general thank you referencing general programs), follow-up information about the cause they’ve supported and how they’ve helped, and thank you phone calls for certain levels of giving. But, even more importantly may be to plan for the future: budget for the increase in mailing costs...
Calculate Your Nonprofit’s Market Penetration

Calculate Your Nonprofit’s Market Penetration

  I recently did some analysis for a group of local Human Service non-profits to see how many of the households in their different communities give. In other words, what is their Donor Penetration? Overall, for the 17 local nonprofits, 2.3% of the local households are Active (0-12 month) Donors. That doesn’t sound too bad until you consider that 97.7% of the local households are NOT donors. And, out of those 17 organizations, the percent of households who are giving ranges from a low of 0.9% for one local organization to a high of 4.3% for an organization in a different area. That’s an extremely wide range. I think this shows that for these very well-known organizations there is still a lot of opportunity in their communities to acquire or reactivate donors. But, it begs the question – Why aren’t people giving? In my experience it’s often been because most of the community just doesn’t realize there’s a need. I’ve been involved in several research studies where prospective donors say, “Yes, we know your organization”, and “Yes, we believe that you do good work”. But then they say “We just didn’t realize that you needed us to give.” They thought that the organization had it all covered. What percentage of those in your community or target audience are giving? Do they know that you need them to support your mission? Have you...

Our Top 5 Most Popular Blog Posts of 2015

As we get ready to ring in the new year, we wanted to take a moment to thank you for reading, sharing and commenting on our blog posts. We hope you were able to use a few of our analytical insights to win, lift and keep your donors and supporters. This year, our most popular posts focused on win: the number and age of new donors that your organization should be acquired, lift: using life expectancy to calculate long term value and keep: engaging donors through online surveys. In case you missed any of these posts, here’s the links to our top 5 blogs of 2015: 5.    How Many New Donors Should I Acquire This Year? 4.     The Buzz – From the DMA Nonprofit Conference 3.     The Age of Acquisition 2.     Should you conduct your own survey? If you have to ask, then no. 1.     LTV...

The Force Awakens?

I’ll be darned. Direct mail acquisition seems to be making a comeback. OK, perhaps not to the degree of a Star Wars $250MM opening weekend comeback. But as I am reviewing recent acquisition (and reactivation of deeply lapsed donors) results, I was pleasantly surprised to see that new donor (and reactivated donor) counts aren’t falling. Even better news is that retention of Second Year donors are improving for the first time since Mark Hamill’s last film any of us can recall seeing (which any fan would know is the 1978 film Corvette Summer). The question is whether this comeback will last, or is it a momentary pause in direct mail’s inevitable...

A Surprising Trend in Fundraising

Any of us who have studied donor behavior can tell you that your best prospect for a sustainer or monthly pledge donor is someone who has been on your file for several years and has averaged 3 or more gifts a year. And the best recruitment should be done in January. Or is it? This year we have studied pledge conversion for several different files, and a very different narrative than the one above is emerging. For both of these organizations, which have mature files built on direct mail, the most likely convert to a pledge program was a single-gift donor who has been on the file a year or less. This is actually exciting news. This means organizations can (and should) start recruiting new donors to their pledge programs right away. But not in January. For most organizations, they are pulling the select for the January pledge recruitment long before the majority of the fall acquired donors are on the database. I know it may sound crazy, but we recommend waiting to send your pledge recruitment package (supported by TM) in February or March. You want to hit those new donors ASAP. You’re...