“We want more monthly donors.” That’s a common request I hear from various charities across Canada. And it’s a great goal to pursue! Monthly donors are some of the most prized and valuable supporters available to non-profit organizations.
They have excellent retention (although face-to-face is usually an exception), offer a stable stream of income, and are some of the best planned giving prospects available to an organization.
But how do we find this elusive group of champions? Well, here are three tips (plus a bonus one!) to get you started. These tips are not shiny or new, but are tested and consistent in finding monthly donors hiding in your database.
1) Clearly Identify Your Goal
Before investing in your organization’s monthly donor file, get the lay of the land. Understand your monthly donor file. Its overall size and average gift are key pieces to the puzzle, as are trends such as retention rate and upgrade rate.
A healthy donor ratio would be for 7 – 10% of your house file be comprised of monthly donors. Starting from that point, plan out your monthly donor development strategy. Are you trying to reach the 10% mark? How much time do you have to reach that threshold? The time constraints and number of donors to acquire will influence the tactics you turn to.
Further, the goal you set will determine the most relevant KPIs to measure. Looking to grow your donor file? Cost of Acquisition is likely to be on your radar. Testing new approaches to upgrade donor gift values? Upgrade response rates and Year 1 ROI are your friends.
Whatever your situation, knowing what you hope to achieve is a critical step in developing a healthy monthly file and measuring the results accordingly.
2) Understand Your Offer…
A well-known direct marketing principle is the 40/40/20 rule. It states that 40 percent of any direct marketing campaign depends on your offer, 40 percent on the audience, and the remaining 20 percent on the creative.
In a typical direct mail piece, that first 40 percent emphasizes the question for the donor: “What’s in it for me?” But in monthly donor acquisition campaigns, we are usually contacting existing donors and trying to shift their giving behaviour. Thus, the question becomes instead “Why should I change what I’m already doing for you?”
Changing ingrained or learned behaviours is never easy. Thus, the onus lies completely on us as fundraisers to clearly articulate what these champions will gain by becoming monthly supporters.
Pleas to make our organizations run more smoothly and efficiently are likely to fall on deaf ears. A donor who chooses to make an ongoing commitment to an organization must believe that her support will have a more profound impact than her previous one-time gifts.
3) …and Your Audience
Which brings us to the next 40 percent – the audience. This is an area that can significantly move the needle in your monthly donor acquisition efforts. Traditional RFM segmentation will work, to a degree, for most charities in attempting to convert cash donors to monthly giving. But just as the offer made to these donors is different, so are the flags that indicate to us they will be good monthly giving prospects.
Years ago, I was working with a national charity that had seen steadily decreasing monthly conversion response rates. The problem we identified is that the majority of potential monthly donors that would be identified by RFM segmentation had already been contacted. By circling back to the same pool of donors, we were seeing diminishing results.
The solution was to find different flags that could identify potential monthly donors. There’s no one-size-fits-all solution here, but looking at other indicators can unearth new prospective monthly donors that RFM segmentation may miss. Some potential indicators are donors who:
- Make gifts online
- Have requested no premiums
- Consistently pay with credit card
There are other potential indicators beyond these three. But they all share a common trait – they identify people who are either comfortable with automated, recurring payments, or could see the value in changing their giving habits to optimize their impact.
Bonus – Optimize your Channels of Communication (All of Them)!
Monthly giving campaigns are often isolated by channel, with face-to-face being the primary channel for large-scale acquisition of new donors and telephone being the primary method of converting cash donors to monthly giving. But you can stretch your budget by combining more than one communication channel and reach a larger audience.
Take a typical telephone monthly gift conversion campaign. The best campaign will reach 60% of your potential donors, with most coming in around 50%. What do you do with those remaining uncontacted supporters?
Rather than set them aside for the time being and wait until the next campaign, try sending the same message in a different medium. You can even segment them further by their past giving behaviour to really zero in on them. We’ll explore this idea further in my next post, so stay tuned!