Recurring donations are vital to organizational growth and long-term sustainability. Not only do they bring consistency to your monthly fundraising revenue, they also create longer lasting and more valuable donors. For instance, a 2017 study found that monthly recurring donors have an 85-95% retention rate, compared to the average donor retention rate of 45%. With the value of recurring donors being so high for organizations today, we wanted to find out exactly how organizations are acquiring and communicating with recurring donors. But we knew we needed to develop a new perspective—the donor’s perspective. Our hypothesis was that if we could experience recurring giving from the donor’s point-of-view we may identify new opportunities to optimize that experience and improve results.
So, to test our hypothesis, we identified 115 nonprofit organizations representing 9 different verticals. We then made recurring donations to as many as possible (9 organizations gave us errors and would not accept our donation), documented the entire process, and analyzed the follow-up communication for 3 months.
1. It’s really, really hard to make a recurring donation.
We hit so many roadblocks in our efforts to give a recurring gift. In some cases, we were prevented from giving a gift completely. And in most cases, there were a lot of additional, unnecessary questions asked of us. We even had to prove that we were human.
2. Most organizations want to cultivate their recurring donors.
Organizations spent twice as much time cultivating us as they did soliciting. Now, could that ratio be higher? Absolutely. And we think that improving that ratio could make a big impact. But it’s certainly better than what we expected.
3. Despite being more valuable, recurring donors aren’t treated all that differently.
38% of organizations made no change to their email strategy for recurring donors, and 58% made no change for direct mail. The changes we did see appeared to be minimal.
4. Relational channels (like text and phone) are underutilized by the majority of the industry. their recurring donors.
Only 2 organizations used text, despite all the industry hype of engaging customers and donors with SMS. Additionally, only 13% used voicemail even though there are many tools available for automating voicemail messaging.
5. Over time, recurring donors are solicited more and acknowledged less.
As we’ve seen from the outside studies done on these topics, the more we express gratitude for our donors, and the more we communicate the impact of their gift, the more likely the donor is to make a second gift.
By the end of the analysis, we noted several areas of opportunity for growth in acquiring and developing recurring donors. For example:
• Only 14% of organizations prompted one-time donors to upgrade to a recurring donation.
• Only 13% of organizations called to say ‘Thank You.’
• Only 1 in 5 organizations sent email communication from a real person.
• 47% of organizations made no attempt to retain our recurring donation after a credit card was canceled.
One interesting finding was that, by month three, only 1 out of 10 organizations continued to acknowledge our recurring donation on a monthly basis. If the intent here is to hide the transaction from the donor out of fear they will cancel, it’s not only unethical, it’s poor stewardship.
Even if the organization has the best intentions and is providing a statement or receipt quarterly or annually, they may be missing organic opportunities to reinforce the value of ongoing support.
On the other hand, we also observed many organizations that consistently sent cultivating content to their recurring donors. Many organizations also had differing communication plans for recurring donors versus their one-time gift donors – even if those differences were minimal.
All in all, we concluded the following: There exists a significant opportunity to communicate more personally, continually grow donor cultivation practices, and reinforce the value of a recurring donation often.
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NextAfter is an online fundraising research lab and consultancy that works with cause-driven businesses and nonprofit organizations to help them better understand their customers and inspire their donors to give generously.
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