Keys to Success for Building a Sustainer Program
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Keys to Success for Building a Sustainer Program

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bbcon 2013

bbcon 2013

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    Keys to Success for Building a Sustainer Program Keys to Success for Building a Sustainer Program Presentation Transcript

    • 9/9/2013 #bbcon 1 Keys to Success for Growing a Sustainer Program - Trends PRESENTED BY NICOLA BACH
    • 9/9/2013 #bbcon 2 • Learn what makes sustainer donors so special • Review trends of successful, growing programs SESSION OBJECTIVES
    • 9/9/2013 #bbcon 3 • Sustainers are one of the most valuable segments in a fundraising program because of the compound effect of their giving • Twelve gifts of $10 or $15 or $25 given in one year is more annual revenue than the majority of single gift donors (those who give individual, one-off gifts) will give in that same period • Sustainers out-perform other donors on the two drivers of long-term value - Lifetime revenue per donor – due to their substantially higher lifetime frequency of donations - Retention year after year and for many years they continue to give • They are consistently worth 2, 3, or 4 times as much as single gift donors over five years. HOW VALUABLE ARE RECURRING GIFT DONORS?
    • 9/9/2013 #bbcon 4 • One-Off Donor Spring Appeal gift for $75 Year End Appeal gift for $100 Total Annual Giving $175 • Monthly Donor Monthly Donations of $20 for 12 months Year End Appeal gift for $50 Total Annual Giving $290 HOW VALUABLE ARE RECURRING GIFT DONORS?
    • 9/9/2013 #bbcon 5 • In many other countries, most donors give by making monthly payments to their charities. Giving monthly is a growing area in the United States as well. • Charitable giving is affected by culture, how we as fundraisers have taught and asked donors to give, and infrastructure such as banking. • Infrastructure is changing • Fundraisers and fundraising channels are changing AN EVOLVING OFFER
    • 9/9/2013 #bbcon 6 • Education - Everyone on the fundraising team, as well as staff in donor communications, marketing agencies, and eventually finance, have to be educated about the benefits of sustaining gift programs. • Measurements - Long term value becomes the standard measure for success for the direct marketing program. Using campaign measurements of success or annual net revenue may not result in a justifiable return for a new, growing sustainer program. • Long Term Plan - Build the program with the intent that this IS the new way to fundraise and grow the donor population to return the highest net per donor with the lowest cost to raise a dollar. Know that it will take time and it will take a consistent, steady commitment to growth. Dipping your toe in the water of monthly giving and only acquiring a few hundred donors and then having to manage, fulfill, and support the program can lead to frustration. KEYS TO SUCCESS
    • 9/9/2013 #bbcon 7 TRENDS OF SUCCESSFUL, GROWING SUSTAINER PROGRAMS
    • 9/9/2013 #bbcon 8 • 2012 is referring to a July through June Year cycle • Reports covered 5 year trends • 2 days of meetings to discuss best practices and review report trends • Wide array of organizations by size and mission TARGET ANALYTICS DONORCENTRICS BENCHMARKING RESULTS FROM 25 US ORGANIZATIONS
    • 9/9/2013 #bbcon 9 WHERE ARE WE IN 2012? In line with Global trends, the diversity of sources is typically higher in sustainer giving than in single gift giving* *NOTE: Data applies to a subset of the 25 organizations, and is for illustration only
    • 9/9/2013 #bbcon 10 Active donor growth between 2011 and 2012 • There was a median 1% decrease in active donors giving one-off, single gifts - 12 organizations out of 25 increased the number of donors • There was a median 8% increase in donors giving recurring gifts - 19 organizations had increases Active donor growth over time between 2008 and 2012 • There was a median 1% decrease in active donors giving one-off, single gifts - 11 organizations had increases • There was a median 43% increase in donors giving recurring gifts - 17 organizations had increases SUSTAINER DONOR POPULATIONS ARE GROWING
    • 9/9/2013 #bbcon 11 Revenue growth over time • Half of the organizations had an increase in overall revenue between 2011 and 2012 – and the increase was small, just a median 3% increase • Comparatively, 92% of organizations had an increase in revenue from donors giving only sustainer gifts • Revenue increased over time for sustainers at a faster rate than donor growth – this is having a strong, positive impact on overall revenue growth especially because single gift segments are flat or shrinking at many organizations – this helped compensate for that decrease POSITIVE IMPACT OF SUSTAINER REVENUE ON OVERALL REVENUE
    • 9/9/2013 #bbcon 12 Sustainers represent more than 50% of all donors at some organizations • Donors Who Gave Only Sustainer Gifts in 2012 - A median 9% of donors in 2012 gave only sustainer gifts • Donors Who Gave Both Sustainer and Single Gifts in 2012 - A median 2% of donors in 2012 - This is the segment with the highest revenue per donor - These are donors giving monthly and giving an additional one-off gift to special appeals • Percent of total active donors giving any sustainer gifts ranges from 3% to 94% - 9 organizations have less than 10% - 10 organizations have between 10-19% - 3 have between 20-50% - 3 have over 50% SUSTAINERS ARE A SMALL PERCENTAGE OF ALL ACTIVE DONORS AT MANY BUT NOT ALL ORGANIZATIONS
    • 9/9/2013 #bbcon 13 • Single Gift Only Donors in 2012 - Average gift median $59 - Median gifts per donor (includes new donors) is 1.5 - Revenue per donor median is $89 • Sustainer Only Donors in 2012 - Average gift median is $22 - Median gifts per donor (includes new donors) is 9.6 - Revenue per donor median is $183 • Donors Who Gave Both Sustainer and Single Gifts in 2012 - Average gift median is $25 - Median gifts per donor (includes new donors) is 9.9 - Revenue per donor median is $247 DONOR VALUE IS SIGNIFICANTLY HIGHER FOR SUSTAINERS
    • 9/9/2013 #bbcon 14 • A far higher volume of recurring donors are acquired direct to recurring than are converted – within the US and outside the US • Donors who are familiar with or habituated to giving in one way are harder to change to giving another way - Harder but not impossible THE PACE OF POPULATION GROWTH IS FASTER WHEN ACQUIRING DIRECT VERSUS CONVERTING
    • 9/9/2013 #bbcon 15 • Upgrades Donor Value - Donors who previously gave at the highest cumulative giving levels can have a revenue downgrade in their conversion year - Use a minimum monthly ask amount in telemarketing to help prevent annual revenue downgrading CONVERTING SINGLE GIFT DONORS TO RECURRING GIVING – UPGRADE Sample of Actual Data
    • 9/9/2013 #bbcon 16 $138,010 $890,438 $509,929 $702,356 $585,274 $311,895 Median Never Gave a Recurring Gift Converted to Recurring in Year of Acquisition (2008) Converted to Recurring One Year After Acquisition (2009) Converted to Recurring Two Years After Acquisition (2010) Converted to Recurring Three Years After Acquisition (2011) Converted to Recurring Four Years After Acquisition (2012) LIFETIME REVENUE THROUGH 2012 PER 1000 DONORS ACQUIRED WITH A SINGLE GIFT IN 2008 - BY YEAR OF CONVERSION LONG TERM VALUE OF Converting DONORS TO RECURRING GIVING
    • 9/9/2013 #bbcon 17 • New donors acquired in 2011 who gave only single gifts in 2011 -- median 29% were retained in 2012 (gave at least one gift in 2012) • New donors acquired in 2011 who gave only sustainer gifts in 2011 -- median 48% of sustainers were still giving 13 months after acquisition month - A different measure of retention --- analyzing month to month retention • New donors acquired in 2011 who gave at least one recurring and one single gift in 2011 -- median 85% gave at least one gift in 2012 - Donors may have been acquired as single gift donors or sustaining donors RETENTION OF NEW DONORS IS HIGHER FOR SUSTAINERS
    • 9/9/2013 #bbcon 18 • Monitor and measure 13-month retention rates by payment method • Direct Debit / EFT has the highest retention rate followed by credit card then followed by check - This is consistent in the US and in other countries • Retention varies by organization and key drivers of the variance are acquisition channel and payment method PAYMENT MAKES A MEASURABLE DIFFERENCE IN RETENTION
    • 9/9/2013 #bbcon 19 • Donor retention rates are 10%, 20%, and even 30% higher for sustainers than for single gift donors…. Even very loyal single gift donors RETENTION RATES ARE ALSO HIGHER FOR MULTI-YEAR DONORS IF THE DONORS GIVE SUSTAINING GIFTS Median Retention Rates in 2012 by Gift Type and Loyalty Donors Giving Only Single Gifts Donors Giving Only Sustaining Gifts Donors Giving Both Single and Sustaining Gifts 2 Years Consecutive Donors 51% 71% 86% 3 & 4 Years Consecutive Donors 65% 80% 90% 5+ Years Consecutive Donors 79% 89% 95%
    • 9/9/2013 #bbcon 20 • For every 1,000 donors who are active 5+ consecutive years… The median annual revenue generated is: - Single only = $140,000 - Sustainer only = $223,000 - Both single and sustainer = $297,000 • For every 10,000 donors the variance is almost $1.5million higher for donors giving both sustainer and single gifts versus single only donors REVENUE GAIN FROM GROWING THE MULTI-YEAR SUSTAINER DONOR POPULATION
    • 9/9/2013 #bbcon 21 LONG TERM VALUE BY ACQUISITION GIFT TYPE Acquisition Class of 2008 Acquired with a Single Gift in 2008 Acquired with a Sustaining Gift in 2008 Median Number of Donors Acquired 50,000 500 Median % of Acquired Donors Giving in 2012 – retention five years after being acquired 15.5% 46.0% Median Lifetime Revenue per Acquired Donor after 5 years $148 $504
    • 9/9/2013 #bbcon 22 MEDIAN DISTRIBUTION OF SUSTAINING DONORS BY AGE ACROSS 25 US ORGANIZATIONS Source: 2012 donorCentrics analysis of 25 organizations and 13 million donors 28.8% 30.4% 25.6% 22.6% 18.0% 11.8% 6.0% 18-24 25-34 35-44 45-54 55-64 65-74 74+ % Recurring Within Age Group 644 10,546 22,242 36,418 68,348 77,569 112,687 260 4,599 7,645 10,635 14,999 10,378 7,228 0 20,000 40,000 60,000 80,000 100,000 120,000 18-24 25-34 35-44 45-54 55-64 65-74 74+ Single Recurring All Donors Average of 25 Organizations
    • 9/9/2013 #bbcon 23 MEDIAN DISTRIBUTION OF SUSTAINING DONORS BY AGE ACROSS 25 US ORGANIZATIONS Source: 2012 donorCentrics analysis of 25 organizations and 13 million donors 28.8% 30.4% 25.6% 22.6% 18.0% 11.8% 6.0% 18-24 25-34 35-44 45-54 55-64 65-74 74+ % Recurring Within Age Group 0.5% 8.3% 13.7% 19.1% 26.9% 18.6% 13.0% 18-24 25-34 35-44 45-54 55-64 65-74 74+ Share of Total Recurring by Age Group
    • 9/9/2013 #bbcon 24 • Investment in: - Acquiring donors direct to sustaining giving – in ALL channels - More channels for recruitment – diversification! - Staffing the program from strategy through operations; hiring experienced staff - Testing – new channels, new packages, new scripts, new vendors • Re-focusing ALL staff from top to bottom in need to have sustaining support from donors - Education – meetings, reports, presentations, new metrics, seminars - A critical component of all “important” review and strategy meetings from top to bottom of hierarchy and in all key departments • Transitioning measure(s) of success to long term instead of ROI in short term DRIVERS OF GROWTH OF RECURRING GIVING
    • 9/9/2013 #bbcon 25 Anyone testing it? What are the barriers or concerns? Can they be overcome? ANY STORIES TO SHARE FROM THE AUDIENCE?
    • 9/9/2013 #bbcon 26 Nicola Bach 617-820-8152 nicola.bach@blackbaud.com THANK YOU