Recurring Donations - Idealist Consulting · Recurring Revenue Program 1. Define your goals & Key...
Transcript of Recurring Donations - Idealist Consulting · Recurring Revenue Program 1. Define your goals & Key...
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Recurring Donations (Building long-term, sustainable revenue for your organization)
Webinar • 11/6/2014
Presented by: Classy
Upraise Consulting Idealist Consulting
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Mike Spear Classy
Matt Scott UpRaise Consulting
Kirsten Kippen Idealist Consulting
Your Presenters
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Agenda
1. Overview of recurring donations 2. Launching a successful recurring donations campaign 3. Building YOUR program 4. Recap and Questions
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Overview
Mike Spear Director of Business Development, Classy
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Why you need a recurring donations program, and
why you need one now.
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60-75% of one-time donors do not
give again the following year.
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Epidemic of Donor Attrition
Top reasons for donor attrition • Could no longer afford • Thought other orgs were more deserving • Received poor service or communication • Death • Never got thanked for donating • No memory of supporting • No info on how money was used • Thought organization did not need them.
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Epidemic of Donor Attrition
Top reasons for donor attrition • Could no longer afford • Thought other orgs were more deserving • Received poor service or communication • Death • Never got thanked for donating • No memory of supporting • No info on how money was used • Thought organization did not need them
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89% Of donor attrition is
COMPLETELLY PREVENTABLE
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It’s also 10x more expensive
to gain a new donor than to keep an existing one.
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70% Retention year-over-year on recurring donations
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Key Benefits
• Predictable revenue growth – no more feast-or-famine! • Ability to plan programs • Ability to make hiring decisions • More time and resources for existing staff • Strong community of supporters • Sustainability • Systematically achieve your mission
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All this, just by changing the ask?
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Yes.
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And we can prove it.
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Three Scenarios
1. Fundraising campaign asking for one-time gifts
2. Fundraising campaign asking for
recurring donations 3. Building on the 1st campaign
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Scenario 1
• 5,000 Donors • $240 initial donation • 10% YoY Growth for donors retained • 45% Donor retention rate • 0 New Donor Acquisition
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Scenario 1: 45% Retention Year # # of Donors Average Gift (Annual) $ Value
(Annual)
1 5000 $240 $1,200,000 2 2,250 $264 $594,000 3 1,013 $290 $294,030 4 456 $319 $145,545 5 205 $351 $72,045 6 92 $387 $35,662 7 42 $425 $17,653 8 19 $468 $8,738 9 8 $514 $4,325
10 4 $566 $2,141 TOTAL: $2,374,139
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Scenario 2
• 5,000 Donors • $20 monthly donation ($240/12) • 10% YoY Growth for donors retained • 70% Donor retention rate • 0 New Donor Acquisition
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Scenario 2: 70% Retention Year # # of Donors Average Gift
(monthly) Average Gift (Annual) $ Value (Annual)
1 5000 $20 $240 $1,200,000 2 3,500 $22 $264 $924,000 3 2,450 $24 $290 $711,480 4 1,715 $27 $319 $547,840 5 1,201 $29 $351 $421,836 6 840 $32 $387 $324,814 7 588 $35 $425 $250,107 8 412 $39 $468 $192,582 9 288 $43 $514 $148,288
10 202 $47 $566 $114,182 TOTAL: $4,835,130
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Scenario 2
• 5,000 Donors • $20 monthly donation ($240/12) • 10% YoY Growth for donors retained • 70% Donor retention rate • 20% New Donor Acquisition
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Scenario 3: 20% Growth Year # # of Donors Average Gift
(monthly) Average Gift (Annual) $ Value (Annual)
1 5,000 $20 $240 $1,200,000 2 6,000 $22 $264 $1,584,000 3 7,200 $24 $290 $2,090,880 4 8,640 $27 $319 $2,759,962 5 10,368 $29 $351 $3,643,149 6 12,442 $32 $387 $4,808,957 7 14,930 $35 $425 $6,347,823 8 17,916 $39 $468 $8,379,127 9 21,499 $43 $514 $11,060,447
10 25,799 $47 $566 $14,599,791 TOTAL: $56,474,136
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Scenario 3: 20% Growth Year # # of Donors Average Gift
(monthly) Average Gift (Annual) $ Value (Annual)
1 5,000 $20 $240 $1,200,000 2 6,000 $22 $264 $1,584,000 3 7,200 $24 $290 $2,090,880 4 8,640 $27 $319 $2,759,962 5 10,368 $29 $351 $3,643,149 6 12,442 $32 $387 $4,808,957 7 14,930 $35 $425 $6,347,823 8 17,916 $39 $468 $8,379,127 9 21,499 $43 $514 $11,060,447
10 25,799 $47 $566 $14,599,791
TOTAL: $56,474,136
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Summary
Examples Example 1: 45% Retention
Example 2: 70% Retention
Example 3: 20% Growth
# of Recurring Donors after 10
Years 4 202 25,799
Average Annual Revenue $237,414 $483,513 $5,647,414
Total Revenue Over 10 years $2,374,139 $4,835,130 $56,474,136
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Summary
Examples # of Starting Donors
# of Donors After 10 Years
Revenue After 10 Years
Small NPO 100 516 $1,129,483
Medium NPO 1,500 7,740 $16,942,241
Large NPO 5,000 25,799 $56,474,136
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Summary of Benefits
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Recurring Donations Over Time
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
1 2 3 4 5 6 7 8 9 10
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Key Benefits
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Key Benefits
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Key Benefits
• Predictable revenue growth – no more feast-or-famine! • Ability to plan programs • Ability to make hiring decisions • More time and resources for existing staff • Strong community of supporters • Sustainability • Systematically achieve your mission
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Some (unsolicited) advice…
• Focus on a low initial ask
• Treat donors like investors
• Talk about impact
• Be transparent & accountable
• Create relationships
• Build community
Casual Donor
Engaged Donor
Recurring Donor
Fundraiser
Lifelong Fundraising
& Major Gifts
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Some (more unsolicited) advice…
Do not pass go.
Do not collect $200.
Start a recurring donations
program today.
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Keys to a successful recurring donations strategy
Matt Scott CoFounder, Upraise Consulting
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Upraise Consulting We leverage the intersection of technology and
human behavior to help nonprofits raise awareness and money online.
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Team Rubicon Case Study
• What’s Eleven11?
• Components to a successful campaign – Planning – Execution – program management
• Results
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Why Recurring Donations?
The Support Squad
The Support Squad has become a reliable source of revenue from engaged donors.
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Team Rubicon Case Study • Planning
• CRM/Salesforce
• Custom Graphics
• Content
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60% Planning 10% Execu1on
40% Program Management Success!
The 60/10/40 Rule
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CRM/Salesforce Configuration
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Training your Team
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Create Custom Graphics
• Talk about impact • Make it relatable • Make it sharable
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Share your Progress
Supporters love transparency, and they love seeing their progress towards success.
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The Ask
Social Media Emails
Phone calls Engagement
68% more
recurring donors
In 11 days
Make the Ask
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new recurring donors
The Results:
320
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29-Oct 30-Oct 31-Oct 1-Nov 2-Nov 3-Nov 4-Nov 5-Nov 6-Nov 7-Nov 8-Nov 9-Nov 10-Nov 11-Nov 12 -Nov - 30 - Nov
2013 New Recurring Donors
2013 New Recurring Donors
Matching Challenger
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29-‐Oct 30-‐Oct 31-‐Oct 1-‐Nov 2-‐Nov 3-‐Nov 4-‐Nov 5-‐Nov 6-‐Nov 7-‐Nov 8-‐Nov 9-‐Nov 10-‐Nov 11-‐Nov 12 -‐Nov -‐ 30 -‐ Nov
Number of New Recurring Donors by Day 2012 vs. 2013 Eleven11
2013 New Recurring Donors
2012 New Recurring Donors
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new monthly recurring revenue
The Results:
$6,148
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From
$8,600/mo to
$14,700/mo
The Results:
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$26K in one-time donations
The Results:
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$95K Year 1 ROI
The Results:
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Eleven11: if continued… Year # # of Donors Average Gift (monthly) Average Gift (Annual)
$ Value (Annual)
1 752 $21 $252 $189,504
2 902 $23 $277 $250,145
3 1,083 $25 $305 $330,192
4 1,299 $28 $335 $435,853
5 1,559 $31 $369 $575,326
6 1,871 $34 $406 $759,431
7 2,245 $37 $446 $1,002,448
8 2,695 $41 $491 $1,323,232
9 3,233 $45 $540 $1,746,666
10 3,880 $50 $594 $2,305,599
TOTAL: $8,918,396
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Why Recurring Donations?
So how do you replicate the success of Eleven11 to develop and grow your recurring revenue program?
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Launching your Recurring Revenue Program
• Focus on relationships
• Create access
• Engagement
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Focus on Relationships
Relationships are about trust, connection, and pursuit of a common purpose.
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Make it about the relationship between supporter and your organization’s impact.
Making the Ask…
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Targeted campaign or Year-Round-Presences… Either way, be specific.
Making the Ask…
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Quantify your supporters’ monthly donation by tying it to your work.
Making the Ask…
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Set up a targeted campaign that you can build on Y/Y. Year round presence on your website.
Access & Transparency
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OPB has the sustaining circle, how are you making your monthly donors feel special?
Engagement
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Offline: gear, postcard, news letter ext. Online: email, social media, website ext.
Engagement
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Managing Recurring Revenue
• Ongoing Maintenance – Minimize Churn – Increase Donor Lifetime Value
• Year/Year Growth
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On average, 70% of recurring donors continue into year two.
Minimize Churn
Donor Churn = # of lost donors # of total donors
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• Lack of engagement
• Outdated payment information
• Donor Fatigue
Leading Causes of Donor Churn
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• Newsletters
• Occasional calls
• Direct mail
Personalized Engagement
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Actively manage expiring credit cards and outdated contact information
Outdated Payment Information
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How much is too much?
Donor Fatigue
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Customize your frequency to meet the recipient’s preferences.
Donor Fatigue
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Increase monthly donation amount of existing recurring donors
Increase Donor Lifetime Value
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Increase Donor Lifetime Value
Donor Lifetime Value
Avg. Donation per Donor Donor Churn Rate =
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How?
Increase Donor Lifetime Value
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• Quantify their gift through engagement
• When updating payment methods
• Just ask
Increase Donor Lifetime Value
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Year / Year Growth
Managing Recurring Revenue
$-‐
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
$12,000.00
$14,000.00
$16,000.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Recurring Revenue -‐ 2013
Recurring Revenue -‐ 2012
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Establish your program’s brand, then build on it
each year.
Year/Year Growth
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Recap – 7 Tips for Launching and Managing a Recurring Revenue Program
1. Define your goals & Key Metrics
1. # of donors 2. Average Gift 3. Retention Rate (Churn) 4. Upgrade Rate
2. Launch a targeted campaign 3. Engage – Make them feel special 4. Team effort (60/10/30 Rule) 5. Measure, learn, and repeat
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Recap and Questions
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Start Now
• End of year/holiday campaigns focused on monthly donations for existing donors
• Recurring donations are a great
followup to donors acquired through Giving Tuesday
• Followup campaign starting in
January
Casual Donor
Engaged Donor
Recurring Donor
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Recurring Revenue Solution Kit
• Recurring donations forms • Recurring donations management tools • White labeled supporter profiles to empower
supporters to manage their own recurring gifts • Rapid 4-week deployment • Integration with Salesforce1 • Proven 5-step method to help you evaluate,
formulate, communicate, advocate, and accelerate campaigns
• Training to ensure team can apply best practices • Strategic guidance & support
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Mike Spear Classy
@stayclassysd
Matt Scott UpRaise Consulting @upraise_consult
Kirsten Kippen Idealist Consulting
@idealistcons
Thank You!