Saturday, December 20, 2008

No time for complacency when securing that 2nd gift

I’ve always been fascinated (sadly) by the effort, or lack of, by many charities around the world at securing a second gift from donors.

Consider this:

• Data I have looked at (through initiatives such as the Pareto Benchmarking study) in countries such as Canada, the UK and Australia shows that charities still recruit far more cash (one-time) cash donors than any other type of gift (including monthly/regular gifts).

• Cash second gift rates vary from around 30%-40%, on average.

• Most charities I know (there are exceptions, of course) don’t have a 2nd gift stream – so once a donor gives their first donation they are thrown into the ‘normal’ donor communications cycle. This herein lies the crux of the problem. Often a donor may not then be solicited for 3-4 months – far too long. Hence why I believe we simply don’t retain more donors. Often it’s done to logistics around getting the data sorted and then managing to include an ask sooner, but that’s a barrier – and I have seen charities overcome this.

Now, if you are recruiting small volumes of donors (say, less than a couple of thousand per year) it makes it somewhat more difficult to justify a separate stream to treat these donors, but if you are recruiting significant volumes, it’s simply madness not to reference these people in a special way in order to get that all important subsequent commitment.

So, enough ranting – some tips on how to improve 2nd gift/retention rates:

1. Test the impact of a feedback (non-ask) letter around 2 weeks after the donor gives their first donation. Purely and simply focused on telling them where their money has gone and thanking them again, telling them how wonderful they are and promising to continue to feedback.

2. Test the time between the initial gift and the subsequent solicitation. Typically somewhere between 3-8 weeks works best, but this will differ for organizations (and may be impacted by the first tip suggested above).

3. Test a cash (one-time) ask as the 2nd gift versus a monthly giving request. But do not mix the two of them. Many organization’s ask for cash throughout an appeal/pack and then include a monthly giving option at the bottom of the response form. This usually suppresses response to the cash ask – it is confusing for donors. If you are not sure about this however, test it.

4. Test the phone v mail. For new recruits I’d suggest phone those you can (over say $25USD) and ‘mop up’ those you can’t phone with a mail ask. But make sure the proposition around monthly giving is strong. Refer my previous posting on getting the monthly ask right.

Bit of a theme coming through here? Test, test and continue to test.

Good luck, and keep me posted with any successes or failures!


1 comment:

Ashley said...

Jonathon, this is a very interesting blog. I look forward to catching up on it and reading more. I am not an organization, but we are trying to raise $20,000 to bring our son home from Ukraine. We are simply a family adopting an orphan and it is hard raising funds because I think more people are apt to donate if it is tax deductable. I would love all ideas you have. I am looking to do a big fundraiser soon, but I have no idea what. We have tried several things, but none of them have brought in really large sums of money. Now, we are down to the wire and hope to travel in a few months. I am getting worried about the finances, but I know it will work out. It is nice to find a blog like this. :)