The donor retention rate for monthly donors is significantly higher than that of one-time gift donors. Cornerstone’s Global File Audit for 2010 – 2014 revealed that the 2014 renewal rate of one-time donors whose first gift was in 2013 was 25%. For monthly donors who had signed on in 2013, the renewal rate was 73%. Interestingly, the 2014 retention rate for monthly donors acquired in 2010 was 42%, only slightly below the 2014 retention rate for all returning donors. These results demonstrate that it takes four times as long for monthly donor retention rates to decline to general retention rates for non-monthly donors. However, just because monthly donors are more likely to keep donating to your organization for longer, it doesn’t mean that you don’t need to make them feel special.
As mentioned in Part 1 of my post, monthly donors are special because they don’t need a justification for their gift every month. However, since you’re likely not sending a tax receipt every time they make a gift, there isn’t a structured opportunity to thank them for their generosity throughout the year. But as donors who feel that they are members of a special club, they do want to feel like they are a part of your organization and, most importantly, know the impact of their gift.
There are easy, low-cost ways to stay in touch with your monthly donors. Instead of sending them a newsletter that takes your organization hours to produce, consider sending your donors a copy of a recent news article about your organization or the cause you work with. You can also get your organization’s clients involved and send donors copies of testimonials or stories written by your clients. Don’t be afraid to take the path less travelled and show your organization’s personality by sending your donors materials that are truly meaningful.
Upgrading Your Monthly Donors To Increase Long-Term Value
Asking for an upgraded monthly gift has the important function of increasing revenue for your organization by increasing a donor’s long-term value. Cornerstone’s Global File Audit revealed that donors acquired in 2010 increased their average gift an average of 3.3% each year of their four years of giving. When asking for an upgraded gift, base your ask on one third to one half of the donor’s current monthly gift. For example, if a donor is giving $15/month, ask for an increase of $5 - $8. Even a slight increase is multiplied every month. Cornerstone’s audit showed that of monthly donors who were acquired in 2010, their average monthly gift in the first year of giving was $15.93, but by their fourth year of giving, it was $18.14. If these increases in monthly gifts represented a new single-gift donor, the value of that donor would have been $26.52 per year.
In Jen Shang’s research on social influences on giving, she discovered that providing donors with information about how much other donors had given or providing donors with materials indicating that other donors had increased their own contributions resulted in larger increases in giving. This effect was magnified when the donor being referenced matched the gender of the donor being solicited for an upgraded gift. Your organization may consider using this technique when asking your monthly donors to increase their gifts.
When to ask?
The best time to ask donors for an upgrade is between 9 and 12 months after they join, but ensure that you have properly thanked them for their involvement before asking for an upgraded gift. To do this effectively, it is imperative that your organization has a system in place to track when donors joined as monthly donors. Make sure your organization is maintaining accurate records of your contact history with that donor so that valuable information from previous interactions is carried forward.
Recover donors whose payments lapse
One of the main reasons that monthly donors leave is because their credit card expires or their banking information changes and is not updated. The best way to deal with these lapses is to recover these donors before their payments stop. Consider developing a triggered email series for monthly donors whose credit cards are about to expire, have just expired, were not charged because of another issue, or lapsed several months ago. Being proactive when it comes to recovering monthly donors requires accurate record keeping and a process to ensure that your database is being checked for lapsed or lapsing donors. If your organization is not able to report on imminently expiring credit cards, ensure that you are at least able to generate a report of declined payments so you can get in touch with the donors to update their information. You will also need to create a policy that details how many times or months your organization will attempt to contact a lapsed donor before ending their status as a monthly donor. When donors do lapse due to outdated financial information, develop some communication materials tailored to their specific situation using language that varies based on the length of the lapse. For recently lapsed donors, say things like “we miss you” and for donors who lapsed a considerable time ago, say things like “we have not heard from you in some time and we valued your support in the past.”
Samantha Barr is an Account Supervisor with Cornerstone Donation Processing and Fundraising Services, which provides Charities throughout North America with end-to-end outsourced online and offline donation processing and donor database management services. Find out more at www.cstonecompanies.com
