Thursday, December 11, 2008

Getting the most by getting it monthly

Intuitively this statement makes sense.

It’s no coincidence that your health provider encourages a monthly membership fee, likewise your cell company and even your bank that pushes for monthly, even fortnightly transactions. They aren’t daft; they know that as your transactional regularity strengthens so too does your value as a customer.

The same logic applies to individual donors. If you can get them to give to you on a regular, ongoing basis they will give more and be more engaged.

In the UK, Australia, Canada and most other developed fundraising nations, this is certainly the case. Monthly giving – where donors contribute ongoing amounts to you via a regular, periodic payment (through their bank account or credit card), has revolutionized the fundraising world in which we live.

Let’s looks at Australia. Data from a recent benchmarking study conducted by Pareto Fundraising showed that of 23 Australian and New Zealand charities in the cooperative, more than a quarter of the income from the 2007/2008 financial year (US$26m out of US$93m) raised from these organizations was from donors contributing on a monthly basis.

In Canada the trend is following that of the Brits and Aussies, with around CAD$22m (out of around CAD$80m) of income received from the nine organizations’ last year coming from committed monthly donors. And the proportion of income from this source is growing annually.

But recruiting new monthly donors, whether using mail, online, telephone or employing canvassers on the street is expensive. So before shelling out hundreds of thousands of dollars on recruitment programs, concentrate on your house (warm) cash file first – that is, people who have supported you before. Spend some time and effort endeavoring to get your one off-cash donors to change their behavior and begin giving on a monthly basis.

So how do you do it?

Most effective channels

A combination of mail and telephone produces the best results.

If you’re approaching new cash recruits, the most effective approach I have seen attempts to convert donors somewhere between four and eight weeks after recruitment. Firstly via mail then followed up by a phone call for those who have a valid phone number and don’t respond to the initial mailing. If done properly (taking into account the factors below), expect a response of around 8-14 per cent of those contacted to commence a monthly gift.

For existing (i.e. not new) cash supporters – use the phone first and ‘mop up’ non responders and those without a valid phone number with a mail pack. Expect a response of between 7-12 per cent.

The Australian Conservation Foundation (ACF) managed to increase the number of their cash donors giving monthly from 8 per cent to 20 per cent in just over 18 months. See examples in Italics below for an illustration of how they did it.

What’s at the core of brilliant monthly donor conversion?

There are six key elements to producing inspiring, compelling and effective conversion campaigns (by phone and mail). When approaching donors:

1. Focus on the benefits, not the ‘product’. Many charities get obsessed with product names for monthly giving programs and forget that donors want to support beneficiaries, not products. Don’t be concerned about a fancy name (like ‘Wings of Hope’); highlight the difference the individuals support will make. i.e. “...monthly contribution of $20 Mrs. Sample, you would be making a truly profound contribution to the protection of our environment…

2. Explain why monthly giving is so vital. Remember, you are trying to change behavior, not attitudes. So a clear and thorough explanation of the importance of monthly giving is crucial. It’s important because it provides long term and committed support which allows the charity to plan more effectively and therefore has a bigger impact, not because it saves the charity on administration costs i.e. “...affordable gift every month, you will help make it possible for us to commit to the highly effective, long-term environmental work necessary to protect our coral reefs, our rainforests…”

3. Target the right donors. A simple but effective selection criteria should include donors who have donated more than once; have given within the last 12 months; whose value is greater than $20 and who have previously paid by credit card (which indicates a propensity to use periodic payments). If you overlay these criteria you will reduce your selection significantly but increase the likelihood of a greater response i.e. ACF’s best responders were those who had given more than once and previously given over $25 by credit card.

4. Use compelling and empowering copy. Always talk about the impact this change of support will have on someone’s life. It isn’t about the organization but the people, cats and dogs or environment they support. Use language that suggests that donors are becoming partners of yours, not monthly donors. Also include powerful imagery that supports (but doesn’t distract from) the proposition and messaging i.e. “… from pressuring our politicians to cut greenhouse pollution… Partners make themselves heard and get things done.”

5. Personalize where possible. Go beyond name and address. Always refer to the donors past support and the impact that has made. Talk to them about areas of your work that you know they are interested in and refer back to comments they have made in the past or areas they have told you (through surveys) they are passionate about i.e. “…For more than 11 years now you have provided exemplary support…I know that you share my frustration about our worsening climate change crisis…”

6. Break it down into daily amounts. A dollar a day is an easier sell than $30 a month. Make the amount sound affordable to the average person, even using analogies like ‘less than the price of a cup of coffee’ i.e. “… for the equivalent of just 65 cents a day…”

Ongoing cultivation and dispelling the myth

If I had a dollar for every time someone told me you shouldn’t mail cash appeals to monthly donors, I would be a rich man. This couldn’t be further from the truth.

In fact ‘monthly donor converts’ are typically at the top of the tree when it comes to appeal mailings, responding at rates upwards of 20 per cent and as high as 50 per cent. You could argue that the term ‘conversion’ is a misnomer because we aren’t asking donors for a transformation, just a shift in their behavior.

In terms of their ability to continue to give cash gifts, again, this is fairly intuitive.

You strengthen the relationship with this donor by getting their more regular commitment. You continue to cultivate them but constantly refer to this special partnership they have with you.

You treat them genuinely as individuals, keep them up to date, thank them and when the need arises ask them appropriately.

Follow these simple steps and you’re well on your way to increasing the value of these donors and most importantly having the greatest impact you can on your beneficiaries.

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