Regular Givers: How to Get Them, How to Keep Them Tobin Aldrich

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Regular Givers How to Get Them, How to Keep
ThemTobin Aldrich
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Regular Givers

• Why regular giving
• Recruitment
• Retention
• Issues
• Case study
• Conclusion

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Regular giving and charities

• Giving through SO and DD usually monthly
• Has existed for decades
• Membership organisations, Churches, child
  sponsorship charities
• Action Aid had 25,000 child sponsors recruited
  door to door in 1975

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Why regular giving?

• Growth of low value regular giving pioneered in
  UK by Oxfam at beginning of 1990s
• 1991-1997 increased regular givers from 40,000 to
  400,000 and income from 10 million to 40
  million
• Recruited RGs through DRTV, inserts, direct mail
• Followed by major UK charities (eg NSPCC)

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Why regular giving

• Introduction of Direct Dialogue (Face to face) in
  UK in 1998 led to further expansion
• PDDs introduced in 1999
• New Gift Aid in 2000
• By 2004, 24 of UK adults giving through SO or DD

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Examples

• Action for Blind People
• Voluntary income increased from 4M in 1998 to
  13M in 2003
• Almost entirely through investment in RG
• In 2001, 72 of total exp went on FR
• Sight Savers International
• Regular givers increased from 14,000 in 1998 to
  56,000 in 2000
• RG income went from 1.5M to 4M

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Why Regular Giving?

• Predictable income
• Reliable
• Enables long term planning
• Unrestricted income
• Relatively low risk investment

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Recruitment Sources

• Existing donors
• Direct mail
• Telephone
• Website
• Email
• Face to face

• New donors
• Direct mail
• Telephone
• Website
• Email
• Face to Face
• Leaflets/door drops
• Press
• TV
• Radio
• Other media

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Recruiting regular givers

• Cheaper to convert existing donors contacts
  than recruit new supporters
• Include regular gift messages into all
  communications (incl. donor appeals)
• Member get member
• Then look for new donors
• Test as many different sources as you can
• Dont be seduced by numbers, go for value
• Invest your money based on life time value of
  donors recruited from each source

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Recruiting new donors

• Importance of lifetime value modelling
• For each source of regular givers you need to
  understand
• cost of acquisitionvalueattrition rate
• Eg direct dialogue campaignAcquisition cost
  73.50 plus VATAverage gift 72 plus 75
  GAFirst year attrition 40
• 2nd to 5th year attrition 15 of live balance
  p.a.
• Is this profitable?

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Is it profitable?

• Allowing for costs of maintaining the
  relationship, inflation and 5 discount rate
• ROI 2.51
• BE point month 18

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Calculating ROI
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New donor sources
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Direct Dialogue

• Is this the greatest evil since the Black Death?
• Controversial
• Donors may or may not dislike it
• Trustees always hate it

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Direct Dialogue

• Pros
• Reaches new, younger donor audience
• Donors who join by it like it
• Recruits Regular Givers in quantity
• Risk/reward calculation is simple

• Cons
• Some people hate it
• Press hates it
• Impact on brand?
• Attrition rates
• Rising costs

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Direct Dialogue

• Same things used to be said about direct mail,
  telemarketing etc..
• Distinguish between issues of principle and of
  market conditions
• Market may be too congested now but that will
  change
• Likely to remain important part of the
  fundraising mix
• Dont discard it unless you have alternatives
  that work as well or better
• Leave the option to re-enter when everybody else
  has exited

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Retaining Regular Givers
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Retention

• No point in all that effort if regular givers
  stop giving
• Few charities pay as much attention to retention
  as to recruitment
• Common mistakes-Poor systems and
  procedures-Poor communications-No reactivation
  and upgrade strategies

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Attrition is an issue

• Depends on recruitment source-Inserts 4-Direct
  dialogue 40
• Depends on quality of recruitment activity and
  message
• Depends on cause
• But it will be a problem
• You must measure it and manage it

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Systems and procedures

• Dont spend money recruiting regular givers until
  you have a proper database that works
• Essential elements-ability to track RGs by
  recruitment source-ability to track
  costs-import payment files electronically
  match to donors
• Need resources to process new RGs

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Communications

• You need a communications strategy for regular
  givers
• Different donors will want and respond to
  different things-How donors were recruited is a
  good guide to what communications they will
  respond to-Eg dont send mail to direct dialogue
  recruits
• Let donors choose what they want
• Gather email addresses and telephone nos (incl.
  mobiles) at point of recruitment
• Develop range of communications incl. non ask
  offers

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Reactivation and upgrade

• Donors cancel for a variety of reasons
• You need an active reactivation strategy
• At least 25 of donors who cancel will reactivate
  if asked
• The more recently they have cancelled the more
  likely they are to reactivate
• Dont give up after one ask
• Donors will upgrade if asked
• Use mail and telephone for reactivation and
  upgrade

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Cross market

• Donors will be interested in other offers if
  marketed appropriately, eg-challenge
  events-campaigning-Xmas gifts-emergency/one
  off appeals-legacies
• But dont just put them into your appeal
  programme!

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Issues
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Issues Learning

• Saturation
• Quality
• Communicating with keeping RG donors

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Saturation

• Have we reached saturation point?
• 50 of adults dont have bank accounts
• Intensity of activity required to produce numbers
  in small market
• Can we maintain the intensity of activity without
  increasing donor resistance?
• Competition is increasing

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Quality

• Agencies heavily used for donor recruitment in
  2001 and 2002
• Quality was variable
• Particular issues with some suppliers
• Concern brought street DTD recruitment in house
  in Oct 2002
• Has reduced the volume of recruits but major cost
  savings quality improvements

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Keeping Regular Giving donors

• Attrition is an issue
• 15 of regular givers need replacing each year
• Newer recruits less loyal than existing
• Attrition rate of DTD FTF donors the highest,
  25 to 30 of donors fall off in year 1.
• Managing and reducing attrition major task

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Communicating with donors

• New donors may not look like your existing file
• Average FTF recruit 32
• -Doesnt read DM
• -Moves house regularly
• Communicating with these donors in the right way
  major challenge
• Offer donors communication options
• Get them to tell you what they want
• Email and telephone at least as important media
  as direct mail
• Develop communication plans for each segment

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Concern 2000-2003
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Concern in 1999

• Income 27M
• Voluntary income 13 million
• -8 million ROI
• -5 million UK
• Emergencies over half voluntary income
• Regular giving income 1.25 million

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Issues 1999

• Income fluctuating year to year
• Emergency dependent
• Market share slipping-No 2 to Trocaire in ROI
  fundraising market-ROI VI 7.5 million behind
  Trocaire-Other charities gaining ground (Sight
  Savers, GOAL)
• Very small player in UK market outside NI

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Concern Income 1991-1999
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Strategy 2000

• Achieve growth based on long term reliable income
  sources
• Regain leadership of ROI fundraising market
• Double non emergency income to 15 million by
  2004
• 40 of income to be from regular giving

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Why regular giving

• Long term
• Predictable
• Not emergency focussed
• General funds

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2000 Plan

• Significant investment (500K) in regular giving
  recruitment
• Test following methods-F2F-DTD-DRTV-Inserts-
  Cold DM-Reciprocals-Press ads-Radio
• Roll out winners

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Test outcomes

• All methods worked with Year 1 return on
  investment gt11 except press ads
• Concern Council agreed proposal to increase level
  of recruitment
• Substantially increased investment planned in
  2001
• Results ahead of target in 2001, led to increased
  investment

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RG recruitment

• 2000 6,000
• 2001 70,000
• 2002 50,000
• 2003 45,000
• Primary recruitment sources
• - DTD (agency Caring Together)
• -FTF (agency PFP)-DRTV-Inserts

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Concern Regular Givers (ROI)
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Return on Investment

• First year crude return on investment 1.41
• 5 year real-terms ROI, allows for-Attrition-Infl
  ation-Discount rate on money invested-Cost of
  communications-Value of additional gifts tax
• Total 5 Year ROI 5.011

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Outcomes

• In 3 years Concern increased regular givers from
  15,000 to 180,000
• RG Income 14.5 million in 2004
• RG 40 of total VI increased to 30 million from
  14 million in 1999
• I household in 10 in ROI now has a Concern SO or
  DD

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Attrition

• Existing donors recruited pre 2000, 7 p.a.
• New donors recruited in 2000 2001, 20 first
  year and 12 second and subsequent years
• New donors in 2002 and 2003, 25 and 15
• Direct dialogue highest first year attrition (25
  to 30), inserts lowest (4), DRTV in the middle
  (15)
• Attrition highest in GB, lowest in ROI, NI in the
  middle

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Conclusion
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Conclusion

• You should be doing this
• Do the cheap stuff first, existing donors,
  website etc.
• Produce a robust return on investment model
• Test as many recruitment sources as you can
• Consider all the options
• Roll out the winners

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Conclusion

• Monitor performance-cost of acquisition-average
  gift-attrition
• Ensure that you have proper systems and
  sufficient resources to process donations
• Develop appropriate communications plan for each
  segment
• Develop proper upgrade and reactivation
  programmes
• Cross sell different offerings

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The Future

• Reducing cost-effectiveness of direct dialogue
• Need to develop alternatives-telemarketing-DRTV
  -member get member-new media
• Re-visit regular giving products