Erica Waasdorp: Monthly Giving Is Buzzing: The First Three Stages in a Monthly Donor’s Life
Monthly giving is growing. Let me start by giving you some highlights and statistics:
- Recurring donors have grown by 52 percent, and revenue has increased by 94 percent over the past 3 years for the average organization;
- The average monthly gift is between $24 and $36, and the average annual gift is $275 to $425;
- Retention rate if giving by credit card is 87 percent, if giving by EFT/ACH, 94 percent, and if sending in checks after receiving check statements, 62 percent;
- The ways donors pay their monthly gifts include via credit card (80 percent), via EFT/ACH (5 percent), and others (15 percent);
- Average percentage of donors giving monthly from the active donor pool is 5 - 20 percent, depending on how much focus there is on giving monthly in the fundraising plan;
- The typical life span of a monthly is at least 5 to 7 years, with some organizations seeing longer depending upon when they started their monthly donor program; and
- The number of donor CRM systems and payment platforms providing monthly giving opportunities is endless. Six years ago, virtually nobody offered recurring gifts online. Now most online giving platforms offer recurring gifts, via credit card and some (but not all yet) offer EFT/ACH, surefire ways to improve (monthly) donor retention further.
(Sources: Luminate Benchmarking 2018, 2018 M&R Strategic Benchmarks, NextAfter Recurring Benchmarking, Blackbaud DonorCentrics™ Sustainer Benchmarking, and others.)
Okay, now that I have your attention, let’s discuss the first three phases monthly donors go through in their lifetime as a monthly donor.
- Becoming a monthly donor (the Acquisition phase);
- Getting recognition as a monthly donor (the Cultivation phase); and
- Being asked to provide updated card information (We call this the Retention phase)
If I asked you to vote for the phase that’s the most crucial, which would you vote for?
The reality is that every single phase is important, but in my 25-plus years of monthly donor experience, the most important phase is the third, RETENTION.
But I’m getting ahead of myself, let’s start at the beginning.
1. Monthly Donor Acquisition Phase
This used to be much more difficult. When I first started in monthly giving, donating on the internet didn’t exist. Last year, some 46 percent of new monthly donors came from digital sources, often driven there by direct mail and telemarketing.
Let me give you a quick overview of the most commonly used options:
- Direct mail
- Organically online
- Face to face/door to door/street fundraising
- Text giving/mobile phone
The more expensive channels like face-to-face and television bring in new monthly donors who are typically entirely new donors to your organizations at the same time, so you’re growing your overall donor base. Give donors options, and they’ll choose the amount they’re most comfortable with.
The web offers endless opportunities. For example, you can send an email with a one-time ask and in the thank-you message to the donor, you’ll ask for a monthly gift in the P.S.
Crucial: Make Sure the Monthly Donor Commits to Giving Monthly
With acquisition of monthly donors, it’s crucial to ensure that the donor knows that they’re committing to give monthly. This will help you in phase three later and make for a better overall donor experience.
I recommend against prepopulating the monthly option on single gift forms. You really want the donor to know that they’re giving monthly. That way there are no surprises or regrets later. Rather, have them click the give monthly button and have them confirm it again.
2. Monthly Donor Cultivation Phase
I recommend keeping things simple, doable and affordable. Send a hard copy thank-you letter. Make a thank-you phone call. Tell the donor whom to contact if they have a question. Tell the donor what to expect now that they’ve joined.
How can you make your monthly donors feel special? Use your stewardship plan and see where you can make monthly donors fit without too much extra time or money.
Maybe it’s a note from one of your clients. Or an invitation for a tour of your organization. Always be on the lookout and just create a swipe file for the year, so you can tap into it as needed.
Remember that surprises are always great! Make sure to create a special segment in your donor base and a special group (or tag) in your email program, so that you can say thank you on an ongoing basis.
3. Monthly Donor Retention Phase
This is the most complicated part of any monthly giving program. What to do with those credit cards that expire or decline? You’ll have to deal with those every two to three years, so monthly donors can come back to this phase several times.
If you did a good job in the Cultivation phase, your donors will not want to stop their great experience, so they’ll be more likely to give you their updated information if you ask them. Work with your payment processor or donor base to implement the credit card updater.
Make sure you’re prepared to ask your donors. They didn’t call or write to cancel. They want to continue! Look at your calls, emails, letters as a courtesy to your donors.
So, there you have it, the first three phases in a monthly donor’s life. A life that can be as short as one month if you don’t do it right, but typically much longer than that. Are you ready?