Rebecca Higman and Katya Andresen, Network for Good
Online donors can be summed up with a phrase that would make an excellent soap opera title: the young and the generous.
They tend to be under 40 and their gifts are around $100. Obviously, we want more donors like them: they account for most of our acquisition, and they are a leading source of new revenue for most nonprofits.
The trick is getting them to stay once they give. In a study released earlier this year, Target Analytics found they have lower retention rates than offline donors. And when they do give again -- which roughly a quarter do, according to the study -- it may not be online but often offline.
Here at Network for Good, where we process donations for over 10,000 nonprofit websites and serve as the engine for many social networks (like Causes on Facebook), we see similar renewal rates -- but important differences depending on where donors give online.
- Across all online giving at Network for Good, about 30% of donors gave more than once in the past 12 months.
- Much of this is from recurring giving (i.e., automatic monthly gifts on their credit card), which accounts for about 20% of donations through our donation processing engine. If you don't count donors who sign up for recurring giving, around 17% of donors have given more than once in the last 12 months.
- Donors who give on a nonprofit's website are more loyal than those who give through social networks. We find nearly 50% of donors give more than once in a year on a nonprofit's website, while only about 15% do through social networks. That said, actual repeat giving from donors via a social network is likely understated because many of these donors have been introduced to this channel of giving less than 12 months ago.
What we know is this: The donors who tend to be most likely to stay with us are those who sign up for recurring giving and those who make it habit to do their year-end giving in December, right before the end of the tax year.
Donors who give in response to a disaster or through peer-to-peer fundraising are less likely to give to that charity again. In the latter case, consider Joe Schmoe's birthday, when he set up a Birthday Wish on Causes on Facebook or Sally McNally running a marathon to support cancer research. If you know them, you have a compelling reason to give on your friend's behalf, but you may not have interest in supporting that cause again.
What's a nonprofit to do?
One option is writing off the less loyal givers and blaming it on their online circumstances. But we don't recommend it!
Nonprofits must share the responsibility of bringing donors back to donate again. Don't blame online giving ("online fundraising is effective for one-time gifts only," or, "oh, social networking's not intended for repeat donations") or the donors themselves ("they're not interested in donating again"). Let's turn the responsibility back on ourselves.
Imagine a scenario when a check arrives in the mail as a result of a direct mail campaign. That supporter may receive a hand-written thank-you note back via mail. Perhaps even a phone call. And, of course, the donor database is updated immediately!
What about an online donor? Is his or her name ever retrieved from the online report? Is he or she added to a direct mail list? What about the thank-you? Is it sent back via Facebook or email, or will there be a snail-mail letter on the way?
It seems there's a bit of a discrepancy. We've developed some tips to help you learn how to improve your cultivation strategy (or combat a lack thereof) and what fool-proof avenue will satisfy donors and Board members alike.
We Need to Shift Our Focus to Two Main Ideas
1. Gathering the support of recurring supporters (monthly, quarterly and annually) is a largely untapped key to success.
If you aren't seeing the numbers we're seeing -- a healthy 20% of donors on automatically monthly giving -- you are missing out.
Let's take a step back for a second to understand better why this giving option is appealing to supporters:
- It takes the onus of remembering to come back to an organization's website or social networking page off the donor.
- It's convenient and feels like automatic bill pay (only with a friendlier, "helper's high" result, as opposed to a grumbling, "I-hate-paying-bills" sort of way).
- A donor low on dough but high on heart can chunk up a larger gift over time -- $480 over the course of the year (based on a typical $40/month) instead of taking the dive all at once.
To better tap this market of steady giving, nonprofits need to ensure that this functionality is available in the first place with their online donation processing provider.
Secondly, nonprofit marketers need to make recurring giving a priority in their online fundraising strategy -- not a footnote. It needs to be an option every time a donor enters a gift amount.
Lastly, bringing this focus and functionality together, recurring giving needs to be highlighted with messaging that explicitly encourages the process. When charities make this idea into something tangible (think about the sponsor-a-child model) donors feel more connected.
2. Organizations can encourage repeat giving through cultivation and appropriate follow-up.
Most importantly, online donors need to be recognized and thanked. According to "Donor-Centered Fundraising" by Penelope Burk, one of the top reasons a donor is a one-timer versus a repeat supporter is due to the treatment he or she received from the nonprofit. Radio silence is a sure way to imply to a donor that his or her gift didn't matter and that an organization does not value it. At Network for Good we like to encourage the 3:1 rule: Thank your donors three times as often as you appeal for additional support.
The clarifying "appropriate" before "follow-up" above refers to the idea that donors should be thanked and communicated with via the vehicle through which he or she donated. Would you add a direct mail donor to your email list and remove her from your direct mail list? Probably not. If a supporter donates online through a nonprofit website or social network like Facebook, that supporter should be thanked online through that same medium.
Though sensitivity to a donor's chosen vehicle of support is important, that is not to say that organizations should neglect ongoing communication from multiple channels. As evidenced by Target Analytics' findings, the greatest amount of support for a cause came through when supporters were tapped via a variety of channels -- as long as those channels included the donors' initial indication of preference!
As always, know what your donors prefer, put them first, and you'll do well -- online and off.