Sustainers in Focus: The Real Value of Monthly Giving Programs Chuck Longfield, Chief Scientist, Blackbaud May 1, 2017 1
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A principal driver of health care expense is the variability in medical practices. Ellen Zane, former CEO Tufts Medical Center 3
Agenda or Section Slide Subtitle if needed
Research Question Does monthly giving improve revenue retention?
What is revenue retention? Revenue Retention is the % of prior year revenue given again by a donor or group of donors Example 100 new donors gave $10,000 last year 30 of those donors gave $4000 this year; the other 70 did not give. Donor Retention is 30% (30 / 100) Revenue Retention is 40% ($4,000 / $10,000) Average Retained Revenue per Original Donor is $40 ($4,000 / 100 original donors)
$120.00 Average Annual Retained Revenue for Donors Acquired in 2006 Source: Sustainers in Focus $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 76,982 new donors gave a single gift in 2006; just 3% were still giving in 2015 14,143 new donors gave a sustainer gift in 2006; 13% were still giving in 2015
$3,500,000 $3,000,000 Annual Revenue from Donors Acquired in 2006 Sustainers vs Single Gift Donors $38 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $80 $238 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $67 76,982 new donors gave a single gift in 2006; just 3% were still giving in 2015 14,143 new donors gave a sustainer gift in 2006; 13% were still giving in 2015
If Sustainers are so good, then what are the practices that have proven to increase revenue?
Proven Practice #1 Ask new donors to give on a monthly basis Improve new donor retention by ~150% and revenue retention by ~70% 100% 80% 60% 40% 20% 0% New 2012 Donors to 10 National Nonprofits (895,000 single gift donors, 17,000 sustainers) 22% 54% % Donors Retained in 2014 45% Single Gift Donors ($43 AG) 77% % Revenue Retained in 2014 Monthly Gift Donors ($143 AG)
Proven Practice #2 Make monthly giving the default option on your web site Improve average web gift by 20-30% while increasing donor and revenue retention (see prior slide) 100% 80% 60% 40% 20% 0% % Split of New Donor Online Gifts (2010 2016) Sustainer vs. Single-Gift 2010 2011 2012 2013 2014 2015 2016 Single-Gift Sustainer
Average Annual Retained Revenue for Donors Acquired in 2006 and Giving in 2008 Proven Practice #3 Convert multi-year, single gift donors to sustainers, in all channels Increase revenue retention by 200-300% $180.00 $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 640 new donors gave a single gift in 2006 & a sustainer gift in 2008; 29% were still giving in 2015 8,286 new donors gave a single gift in 2006 & a non-sustainer gift in 2008; 14% were still giving in 2015
$200.00 $150.00 Average Annual Retained Revenue for Donors Acquired in 2006 and Giving in 2008 Source: Sustainers in Focus $100 per original donor $100.00 $66 average first gift $50.00 $20 per original donor $54 average first gift $0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 640 new donors gave a single gift in 2006 & a sustainer gift in 2008; 29% were still giving in 2015
Proven Practice #4 Encourage donors to use EFT over credit card Increase donor retention by ~13% and revenue retention by 6% 100% 80% 60% 40% 20% 0% Annual Retention of Sustainers by Payment Method Local NonProfit National NonProfit 1 Credit Card EFT National NonProfit 2
Proven Practice 5 Use a credit card updater service and update invalid credit card data Increase sustainer retention rates by 3% per month, while significantly reducing donor outreach efforts 98.0% 96.0% 94.0% 92.0% 90.0% 88.0% 86.0% 84.0% 82.0% Increased Retention of Sustainers with Credit Card CC Updater In FY 16, 11k CCs fixed $200k recovered 87.5% 90.1% Credit Card Before CC Updater 95.7% 95.7% EFT After CC Updater
Additional Proven Sustainer Practices Practice 6 - Be aggressive in collecting missed payments Practice 7 - Survey sustainers who stop giving Practice 8 - Encourage sustainers to upgrade to higher giving levels Practice 9 - Include sustainers in traditional communication stream Practice 10 - Provide monthly donors with phone# & email of a program manager
How to get started?
Resources Hidden Gold, Harvey McKinnon www.harveymckinnon.com/books Monthly Giving, Erica Waasdorp Sustainers in Focus Parts 1 and 2 www.blackbaudinstitute.com/sustainers Sustainer Case Study www.blackbaud.com/files/resources/downloads/sustaining-your-mission-2015.pdf Recurring Gift Overview www.blackbaud.com/bbms/recurring-gifts Remember, much of what is presented is the art. Remember the science.
Thank you! www.blackbaudinstitute.com chuck.longfield@blackbaud.com Twitter: @chucklongfield