For years, nonprofit organizations have been facing various difficulties with fundraising. First, marketing cost-per-thousand (CPM) figures across channels have seen significant increases. Supply chain shortages during the COVID-19 pandemic particularly affected direct mail, making cost-per-gift a challenging metric to maintain. Second, the ever-changing acquisition universe has pressured organizations, as the traditional boomer generation ages and a younger, more diverse, digital-first America takes its place, bringing with it different expectations and norms. Third, many nonprofits have declining retention rates across their files, often from lower giving band donors, making them more reliant on a smaller number of higher-value folks.
Over the last year, following the peak of the pandemic giving frenzy, global events and significant inflationary pressures resulted in general economic uncertainty in the US. Given these headwinds, it is more important than ever that nonprofits focus their efforts on reliable revenue streams. One proven method of achieving this is to create or build on their sustainer giving programs to build relationships with donors who have the longest lifetime value potential. In Classy’s “Why America Gives” Report, survey results revealed that loyal donors are twice as likely to keep their donations as-is, even if they are experiencing a financial stressor compared to passive donors. This is just one of the many reasons nonprofits should consider prioritizing and incentivizing the donor experience to highlight recurring giving.
Let’s take a deeper dive into what sustained giving is and why it is so important for nonprofits.
What is Sustained Giving and Why Is it Important?
What is sustained giving?
In this giving model, nonprofit donors choose to give over a set interval of time. Unless those donors reach out to alter or cancel their ongoing gifts, and so long as the payment method is valid, the organization will continue to receive these donations predictably, from both a revenue and timing perspective. With the financial stability this giving model provides, nonprofits will often create a sustainer program, including dedicated stewardship communications for existing sustainers, upgrade plans for existing non-sustaining donors, and acquisition plans for brand-new sustaining donors.
What are sustainers?
Sustainers are donors who give these regular, recurring donations. A nonprofit’s dream come true!
A sustainer program is a crucial strategy for nonprofits because it gives the most loyal donors a simple avenue to give regularly while only engaging once during the initial set up. For the organization, recurring giving delivers a reliable revenue stream and provides an avenue into mid-level and planned giving donor development.
A Blackbaud study looked at retention for sustaining donors compared to single gift donors from 2006 to 2015. After 10 years, new donors acquired on a single gift basis only retained at 3%, while sustaining gift donors were retained at 13%.
What drives a sustainer to continue giving, and how can nonprofits strengthen their relationships with these valuable donors?
Understanding what motivates donors to become sustainers can drive a stronger strategy to retain our most loyal donors. So, what attracts donors to give recurring gifts? Focus groups, in-depth interviews, and survey research find the top two motivations most often cited by those who have decided to become sustainers:
- CONVENIENCE: Once the donor decides to make a recurring gift, they are set up to automatically give at whatever frequency they choose without requiring the donor to take any further action.
- BUDGET MANAGEMENT: Donors who may not be able to give a large one-time gift may like the ability to budget a monthly (or other frequency) dollar amount. This becomes especially attractive to a younger demographic. For example, the Millennial Impact Report found that “52% of Millennials are interested in monthly giving as a way to donate.”
Additional factors include:
- MISSION CONNECTION: The donor is committed to the cause and is aligned with the mission of the nonprofit. They ultimately trust the organization to use their recurring gift how they see fit.
- HABIT, INERTIA: The donor has set up the habit or charitable giving on this cadence and simply hasn’t been prompted to cancel.
What Makes a Great Sustainer Program?
As a standard best practice, many nonprofits serve a toggle option for sustainer giving right on their donation form. But there are other elements to consider that can highlight sustainer programs and make them attractive options to consider. We looked at nonprofit sustainer programs from across the globe and identified the essentials in making a recurring gift program stand out from business-as-usual.
Brand your program
Set your sustainer program apart by giving your program its own name and branding. In the example below, She’s the First’s monthly giving community is called “The Front Row”, which highlights the impact of their monthly giving.
Highlight the tangible impact of their sustaining gift
We know that one of the drivers of donors becoming sustainers is their connection to and passion for the mission. Sharing the impact of their donation can help acquire sustaining donors initially, and it can help drive larger recurring gifts over time. In this example, Doctors without Borders outlines the impact for every dollar of a sustaining gift.
Share testimonials from your sustainers
Nonprofits can showcase the community aspect of recurring giving by sharing testimonials and donor highlights from their sustainers. In this example, Charity: Water shares testimonials and why their supporters give a recurring gift.
Offer multiple giving frequencies on the donation form
Donors are attracted to sustainer programs because they are typically easy to set up and maintain. Make it even easier for the donor by providing more flexibility in frequency. In this example, Direct Relief allows sustaining donors to choose from frequencies including bi-weekly, monthly, quarterly, semi-annually, and yearly.
(Donate to Direct Relief)
Develop a call strategy
When a sustainer calls in to cancel a recurring donation, it is best practice for call center employees to have scripting and training to navigate delicate conversations – acknowledging someone’s potential financial position, their interest in supporting the mission, and the organization’s desire to save them as a donor. Scripting typically includes prioritization guidance for alternatives to try and avoid complete cancelations.
One of the least intrusive outbound call center actions is to contact sustaining donors with expired or otherwise non-functional payment methods on file. Securing a more reliable payment method (e.g., direct bank account transfer) can help ensure that donors do not become lapsed and/or lost individuals.
Some organizations prefer to reach out directly to newly acquired single-gift donors, who have recently been inspired by the mission, and ask them to upgrade to recurring giving. When making this ask, staff should have a target recurring donation amount in mind, ideally based off the individual’s first gift amount and anything else known about their giving capacity.
We know that match campaigns can be huge drivers for one-time giving campaigns. In this example, International Rescue Committee ran a monthly recurring campaign where all first monthly gifts up to $1.5MM were matched. Nonprofits could test something similar – either having corporate sponsors or major donors match the total amount raised for sustained giving in the campaign or an amount for first time sustained donors signed up.
(Your Monthly Gift Matched | International Rescue Committee)
Below is another corporate match example, this time from Meta in late 2022. The structure of this offer is a corporate match, up to a certain amount, with a sustained donor sign up. Notably, Meta is waiting until after the donor’s second recurring gift payment before contributing their match. This offer design is intended to keep donors involved in the mission for multiple months, to avoid immediate cancellations post-offer usage.
When considering strengthening a sustained giving program user experience, it is important for nonprofits to assess their technology capabilities. Below is a short list of what many organizations use for growing and managing their programs.
- Credit Card Expiration Service or immediate notification to donor when card is declined.
- Donor Profile where donors can manage their gift amount, pause, or cancel their recurring gifts.
- Listing the recurring donation option first or as the default on online donation pages and in offline campaigns.
Sustainer Audience Targeting
Beyond building a great experience, nonprofits must also find the right people to communicate with. Modeling for sustainer audiences can often feel like a hunt for the white whale – many have tried with little success of predicting sustained giving.
What we do know is that getting sustained giving donors from both initial acquisition and upgrades are valuable. As mentioned above, initially acquired sustained donors retain at a rate 10 percentage points higher than single gift donors. However, if you’re able to upgrade an existing single gift donor into a monthly sustainer, their retention rate increases from 13% up to 29% over a 10-year period, a whopping 26 percentage points higher than single gift donors.
Given the value of sustained giving to nonprofits, the difficulty of creating a model to use in acquiring sustainers, and the inaccessibility of other nonprofits’ sustainer lists for cold targeting, organizations may decide to push communication encouraging recurring gifts in broad strokes to donor files and constituents at large.
There are several methods to consider, including cold acquisition and upgrading new donors to become sustainers. However, we’re going to focus on turning existing core donors into sustainers. This method is not only successful – it can also lead to a higher LTV over time than acquiring or upgrading donors soon after acquisition (see above chart from Blackbaud’s Sustainers in Focus). Here are a few considerations for that approach:
- Encourage higher giving bands consistently for sustained giving in all interactions online and offline. The above chart shows that those who upgraded to sustainership were often giving almost 2x as much in year one as single gift donors who never upgraded to sustainership, but not quite as high as those coming into the mission as sustainers initially.
- For those making contributions through alternative ways of giving, assess whether their giving vehicle would naturally lend itself to setting up a scheduled giving cadence, such as Donor Advised Funds (DAFs).
- For individuals already giving at a high level, for example $1,000+ per year, consider any potential risks to asking those individuals to give on a more frequent cadence, when many of those large donations already likely reliably roll in at the end of the year.
- For younger donors, or those on a lower income bracket, focus messaging for the sustainer model as a way to budget effectively around charitable giving.
Nonprofits often want to ask everyone to become a sustaining donor. But as the above thought starters show, organizations may want to refine target audiences, messaging, cadence, and/or ask amount when beginning to make this push.
How Can Nonprofits Reach Gen Z and Millennials?
Most nonprofits have historically focused on individuals with a high capacity to donate. As a result, many donor bases for US-focused organizations are comprised of older people. To diversify, organizations are expanding their reach to younger generations – but this audience has different expectations and requires a new approach compared to their older counterparts. Having grown up with smart devices all around them, they demand a lightning fast and seamless user experience that is connected and personalized across all touches. How can organizations adapt?
Subscription and BNPL (Buy Now Pay Later) services may influence giving behavior
Nonprofits can benefit from the ingrained behaviors and norms of younger constituents, such as their propensity to participate in subscription services at significantly higher rates than adults 55+. They’ve grown up paying monthly for things like online gaming, music and video streaming, Amazon Prime, meal kits, and other subscription boxes. Similarly, Gen Z and Millennials are the top users of buy now pay later (BNPL) services like Klarna or Affirm – affording them smaller, predictable payment plans. In a time when 63% of Americans are living paycheck to paycheck, subscriptions and BNPL services both provide users with easily budgeted recurring expenses.
Based on this behavior, younger generations may be more inclined to pay for a sustaining donation, even if small, which would likely lead to higher donor retention for these individuals than asking for a larger initial stand-alone gift.
The growing importance of communication preferences
Younger consumers may challenge many of the current successful practices used in fundraising. When a consumer is used to easily managing their profile and preferences on Amazon Prime, for example, they expect similar capabilities on other platforms and digital experiences. From our own watercooler polling among Gen Z and Millennial donors at Merkle, strong opinions abounded with how nonprofits handle communications with donors today:
- “If you text me more than 1x per day, I’m immediately opting out.”
- “If your email annoys me, I won’t unsubscribe, I’ll just hit spam to get it out of my inbox.”
- “Do not waste paper and mail me every month! I donated online!”
- “For the love of all that is holy, never call me. I won’t answer anyway.”
- “Even if I support the mission, I will not donate if you continue to pester me asking for money.”
- “Make it easy for me to do things.”
While this will affect sustainership retention for the next generations of constituents, these concerns were also reflected in older generations. While they may not have grown up on the same tech that their kids or grandchildren use today, Boomers and Gen X have similarly become accustomed to a seamless UX across channels. They may not be as demanding or as vocal about them, but the pain points in the quotes above are common experiences we can all empathize with.
Nonprofits may want to re-evaluate all elements of their current programs, including sustained giving, for how they will resonate with their donors of tomorrow. By designing experiences that resonate strongly with future generations, they can also delight the donors of today.
Given the struggles facing nonprofits today, we encourage organizations to examine their current processes and cultivate experiences that will support and encourage reliable giving streams through sustained giving programs. By 1) getting more constituents upgraded to sustained giving using known key motivations, 2) retaining them with best-in-class practices, and 3) future-proofing their practices by designing for the donors of the future, nonprofits will ensure they are in fine form with sustained donors as the golden lifeblood of their organizations.