Several months ago, I wrote about building a better monthly donor file for your organization. If you missed it, you can check it out here. Since then, a number of questions have come up about the different types of channels and campaigns available for monthly donor acquisition.
Monthly donors remain some of the most valuable and sought-after donors by Canadian charities. But what type of campaign is best for you? And how do you get started? This post will identify the range of campaigns available to your organization and pose three questions to help you decide your best course of action. Once you’ve answered these questions, you’ll be well on your way to launching a successful monthly giving campaign.
What is the Right Channel for You?
As I suggested in my last post, different channels have specific uses and functions for acquiring, upgrading, and stewarding your monthly donors. It’s imperative to understand when to call on each one and how to best leverage and measure them for the betterment of your program.
Let’s say you and your team have set a goal to significantly boost the number of monthly donors on file. Your immediate thought may be to launch a Face-to-Face (F2F) campaign. These campaigns are the largest drivers of new monthly donors, with fundraisers finding new donors by going door to door, or soliciting on busy streets and at populated public venues.
After performing your due diligence, you select a vendor that projects to acquire 300 new donors at an estimated Cost of Acquisition (COA) of $350 per donor. The campaign will bring on brand new donors and will bring them in as monthly supporters right away! However, this seemingly positive trait of F2F campaigns is a double-edged sword, as donors acquired in these campaigns are far less likely to be retained over the course of the year. If only 60% of your newly acquired donors remain on board after twelve months of giving, the Year 1 COA of this campaign would increase to $583.
An alternative would be to leverage your existing house file and convert current cash donors to monthly giving. This could be done through any combination of direct mail, telephone, and digital solicitations. Of these three channels, telephone is generally the most effective at converting donors to monthly giving. Further, these monthly donors are retained at a far higher rate than newly acquired monthly donors from F2F campaigns, meaning your true COA after Year 1 would only increase marginally.
The downside to this campaign is that its ability to ramp up in scale is constrained by your existing donor base. Not every existing donor is a good target for monthly giving and, depending on your organization’s donor profile and database, you may not be able to bring on the same number of monthly supporters.
There is a third option designed to leverage the best of these two worlds, and that is to use a two-stage campaign that leverages two distinct channels. The first channel is designed to find new potential donors by getting them self-identify with a simple and direct call to action. An example would be to sign a petition online or text an organization to receive a free brochure. This initial step is designed to target individuals that have yet to support you and are not already in your database, but who care about your cause. Once someone has taken this action and self-identified, she receives a follow-up communication piece (the second stage of the campaign) asking for a monthly gift. This second stage is typically a telephone call, but could also be a letter or email.
There are many other methods beyond the ones discussed above, but the three I’ve presented depict the general range of options and their specializations. So, how do these three campaigns stack up? Let’s take a look:
|Initial Cost of Acquisition
|Year 1 Retention
|Monthly Donors, at Year 1
|Year 1 Cost of Acquisition
|Acquisition, Face to Face
Note: These numbers are general benchmarks for what a standard organization could expect with each of these 3 campaigns. They should not be taken as guidelines for your planning. Every organization will have different projected results for the three campaign types based on a number of factors. These may include recognition among the general public, timing of the campaign, and strength of monthly donor stewardship, among others.
So, what’s the verdict?
Like everything in life, there’s no one-size-fits-all answer. The answer lies in what your organization’s goals, strengths, and weaknesses are. For instance, if you have commitment from your board to invest significantly in monthly giving but are expected to boost the overall number of monthly donors quickly, you may be best served with a F2F campaign. But if your mandate is to be efficient in your budget spend and can afford to wait a bit longer to bring new monthly donors on board, a standard telephone conversion campaign may be the best fit.
To help you narrow your options and select the best fundraising activity to achieve your goals, ask yourself the following questions:
1) How much do I have available to invest?
Different types of campaigns will require varying levels of investment. What is the COA you’re comfortable with? Do you need to invest in setting up a team in the field or plan other preliminary stages of the campaign? Or can you immediately solicit donors to make a monthly gift?
2) What is our acceptable break-even point?
It is critical to have clarity on how patient your finance team or board will be in realizing the revenues from your campaign. Acquiring monthly donors almost always results in a net loss in the first year. The board should be prepared to wait before seeing the benefits. How long they are willing to wait will impact which channel suits you best.
3) What does the new donor journey look like?
This is perhaps the most important question to answer before deciding which campaign to pursue. You should have a clear plan for every new donor brought on board as part of your campaign. The stewardship plan most clearly will affect your retention rate for donors acquired. But a good stewardship plan will also impact your initial acquisition efforts. A strong plan will give your front-line fundraisers more to talk about when discussing the merits of monthly giving with your target audience.
There are plenty of options available to help you build your monthly donor file, and all of them have merit. By answering the three questions above, you’ll set yourself up to choose the best option for your organization. Remember, donors crave engagement and meaning – and monthly donations are one of the most effective ways to achieve that. Our job as fundraisers is to enable donors to see the incredible impact they can have with recurring monthly gifts.
Next time, we’ll talk about getting creative with our segments and how to test them over time.
This post was written by Ronen Tal, former Philanthropic Counsel at Good Works.