As the number of donors continues to decline, it’s more important than ever to build a community of loyal supporters for your organization’s cause — and one of the most effective ways to do that is to encourage your donors to become sustainers.
With subscriptions spanning entertainment, fashion, food, health, pets and more, the subscription economy is redefining recurring giving, Dave Raley, founder of Imago Consulting, said at the Direct Marketing Association of Washington’s annual Sustainer Day — a full day of programming devoted to recurring giving trends and best practices across multiple sessions and roundtable discussions. However, Raley noted that recurring gifts are a program, not an offer, which is one of the biggest errors he sees nonprofits make.
“The value proposition is much more than that,” he said. “So sustainer giving is not a single gift — just continue that monthly. And that's an opportunity that organizations have to think about. What is a compelling value proposition that will get somebody to not just give that one gift but to stay with us and to not churn? Because churn is one of the biggest issues in subscriptions and it's certainly one of the biggest issues that we face as nonprofit fundraisers.”
Here are five tips this year’s presenters shared that can help your organization acquire and retain sustainers in the future.
1. Consider All Recurring Frequencies
Though many nonprofits are still figuring out how to offer recurring options other than monthly, some have utilized other channels to test the desire for quarterly and annual renewals — and even weekly and biannual in some cases.
HSUS offers quarterly, biannual and annual frequencies in its face-to-face fundraising efforts, Rachel Feldman, director of sustainer strategies at The Humane Society of the United States, said.
“We also are experiencing much better retention … with annual and quarterly,” she said. “We also have biannual options. Biannuals — I don’t know why — they are amazing. And so add that to your mix if you haven’t yet.”
Meanwhile, World Wildlife Fund, which has a sustainer base of 85,000 donors who contribute about 30% of its annual membership revenue, offers quarterly and annual options for face-to-face donors, Jessica Sotelo, senior director of membership at World Wildlife Fund, said. Additionally, annual is available online, but mainly for membership renewals.
“If we look at it as a whole, our annual donors are actually 124% more valuable than our monthlies, and our quarterly donors are 49% more valuable than the monthly [donors], so we really try to push the primary ask in our face to face, [which] is the quarterly or the annual option, first,” Sotelo said.
2. Be Proactive About Declined Payments to Reduce Donor Churn
Credit card declines can be frustrating for sustainer programs that rely on those recurring gifts. Paul Finley, vice president of enterprise development at FlexPay, estimated more than half of declines are false positives while another quarter or so are due to insufficient funds. Declined payments are one of the most common precursors to sustainer churn, but there are ways to prevent some payment failures.
“Understanding the recovery of failed payments isn't just about what happens in that month — it's how many additional months are you going to get from that sustainer over time,” Finley said. “If that drops off and they leave, it's ‘I didn't just miss the $40 donation, I might have lost $200 in the following five months if we had not found a way to intervene.’”
A few of those ways include prebilling data cleanup, using a recycler to try to push the payment through again, and contacting the donor directly to rectify the issue. Finley recommends updating account information through your payment processor about seven to 10 days before charging your donors for their recurring gifts. This prebilling effort will retrieve new expiration dates, account numbers, etc., from credit card companies.
The Human Rights Campaign also strives to move donors to payment methods that have lower rates of failed payments, Caitlin Toynbee, its deputy director of membership, said. EFT is particularly effective in increasing retention since it can eliminate the variables that come with credit card declines.
“I looked at our numbers from our last credit card round, and about 100% of our EFT donors successfully have a charge last month,” she said. “And so that’s really the number to forecast. If you can get folks to switch to an EFT, amazing, but if you can get someone on an ApplePay card, just to give you their normal card, you’re going to be able to keep them so much longer.”
3. Steward Sustainers
The World Wildlife Fund embraces premiums, with a premium package offered via direct response TV ads for a $12 monthly gift. However, the organization averages a $16 recurring gift for that effort. But regardless of the channel that brings them to the nonprofit, World Wildlife Fund also stewards sustainers — or “heroes” as the organization has branded them — in other ways, like emails that show the organization’s impact.
“It's something that we make sure we are regularly reporting out to our heroes on how they are making a difference, how their donation is realizing our conservation success, but the one that we really tout a lot is the sense of community and the sense of satisfaction that our heroes get in knowing that they have done something to impact and affect the environments and habitats for species around the world,” she said.
4. Track Sustainers to Reach Lifetime Value Goals
Tracking sustainer giving over time allows your organization to pinpoint and correct issues, but there are also ways to increase their value along the way. Sustainers that donate additional gifts outside of their recurring gifts usually become the most valuable donors, Kate Hollandsworth, senior vice president at Integral, said.
“Do not be scared to ask them for money for additional gifts,” she said. “Don't ask them every month for additional gifts, but definitely don't wait till December to do it. Space it out. Let it make sense.”
She noted commercial subscription programs sometimes include automatic upgrades in the fine print, but these are frowned upon in the nonprofit space. She suggests asking donors to opt in when they sign up. Perhaps, “Would you also be OK with a 3% year-over-year inflation increase?”
“I have one program that I worked with that 10% of their sustainers have signed up for this, and they started doing it years and years ago, so they built up now 10% of their existing sustainer file is a 3% upgrade every year,” Hollandsworth said. “It wasn't automatically applied to them. They signed up for it.”
5. Cultivate Sustainers Through Your Donor Pipeline
Investing in a sustainers program actually can help grow your organization’s other programs, since recurring donors are great prospects for mid-level, major and planned gifts, Hollandsworth said.
“I very much implore you to look at where your planned donors are coming from,” she said. “Oftentimes, they started off as a sustainer, and they grew into a planned gift donor. When you think about major-gift upgrade mailings [and] planned giving informational mailers, including sustainers in those plans can be key in really unlocking some of the great potential you have for this highly committed group of donors.”
Related story: The Art & Science of Building Long-Term Donor Relationships through Recurring Gifts