Sustainer Giving in a Subscription Economy
Would you have ever thought that Netflix would reshape donor behavior?
Now, more than ever, sustainer giving represents the single most important general fundraising opportunity for organizations. That’s because income from sustainer giving is:
Two major trends make a thriving, growing sustainer program more critical than ever: changing consumer behavior and then changing donor behavior in turn.
1. Changing Consumer Behavior
The first trend is changing consumer behavior, resulting from the growing Subscription Economy. Subscriptions are prevalent in nearly every area of personal and business life today. Nearly half of all automated payments today are discretionary — for products and services like video streaming, online music, software and subscription boxes.
How many monthly automated payments are you making now, versus, say, five or ten years ago?
Think of your own spending. How many monthly automated payments are you making now, versus, say, five or ten years ago? Customers are buying access that’s always-on and anywhere. They want memorable experiences, ongoing value, and personalized service. And this mindset is transforming the way people think about monthly automated giving. Who knew that Netflix would play a part in changing donor behavior?
2. Changing Donor Behavior
The second trend driving sustainer program growth is changing donor behavior. In a recent study, 49% of Baby Boomer and Generation X donors stated they are enrolled in a monthly giving program. Further, 52% of Millennials stated they would prefer to give monthly over a large one-time donation. More donors than perhaps ever before are signing up for recurring giving.
Sustainers are worth a lot more to nonprofits as well. They retain at higher rates and their long-term value is two to five times that of single-gift donors. And thanks in part to the Subscription Economy, more donors than ever are electing to give monthly.
Historically, the most popular sustainer programs have been one-to-one sponsorship (e.g., World Vision child sponsorship) and membership (e.g., museums, arts organizations). Traditionally, many nonprofits have been unable to create programs like these. But this is no longer the barrier it used to be. Thanks to the Subscription Economy, donors are more willing to give monthly to a wider variety of organizations.
Together, these forces represent a huge opportunity for nonprofits to dramatically grow sustainer giving.
How Jewish Voice built a thriving sustainer program, without child sponsorship or membership:
As a ministry, we are always looking for donors who connect with our mission. But, often, we get so focused on the organization’s mission that we lose sight of the donor’s mission: to see their charitable giving goals accomplished. The first step is understanding the mission of your donors. Only then can you determine how your organization can be the vehicle for making their giving goals a reality.
A few years back, Jewish Voice was considering how to find this kind of donor — highly committed partners who have a Romans 11:26 passion for seeing all Israel saved. We were looking for quality over quantity. Instead of bringing in tens of thousands of donors who would ultimately give once, then drop off, we wanted to find long-term partners who really would stand with Israel and the Jewish people long term.
The problem was, this went against past fundraising experience. Our previous model focused on multiple tiers of giving, all tied to premium-for-gift incentives. That’s what had worked for years, so switching to a much lower dollar offer, albeit monthly, would be a drastic change with high risk. But we knew that even though we would see lower upfront giving, the lifetime value of these donors, and the commitment they had to the ministry, would be worth the risk.
At the time we had a monthly giving program, but it needed to be revamped.
At the time we had a monthly giving program, but it needed to be revamped. We needed to make it all-inclusive, with benefits that focus on the donor. We changed our cultivation of these donors and started following up with them monthly to tell them about how their donation was impacting lives around the world. In addition, we made sure that they knew exactly where their gifts were going. If they gave $30 monthly, we told them how many people would receive medical care and the chance to hear the gospel. We started testing this model slowly in different channels of fundraising. It really was a paradigm shift. We had to change the way we measured and what we considered successful fundraising.
We are now three years into this new strategy. We've seen the number of monthly givers double. Even better, those sustainers are worth three to five times their single-gift counterparts. It wasn't easy. We had to overcome internal resistance and external changes to our fundraising.
This is crucial, especially in a time like this when the future of fundraising in our current climate is so unknown. It’s a tremendous blessing to know we can depend on these donors, who are deeply committed, despite what is going on in the world.
What we learned
As you think about your own sustainer program, some things to consider:
- Start with the donor.
The best recurring giving programs are built on a deep understanding of donors. That can only come from actually talking to donors, interacting with them in-depth, learning from them.
- Build a sustainable program, not just a fundraising offer.
One mistake fundraisers tend to make is treating their sustainer program as “just another” fundraising offer, tagged onto an existing fundraising calendar. The best sustainer programs are built through a deliberate investment of time and budget, just like any major donor, grants or foundations program.
- Consider redesigning your sustainer program.
Most recurring giving programs are little more than a named Electronic Funds Transfer/Credit Card auto-debit program, with no real distinction or benefits. The programs that grow the most, and have the highest long term value, go far beyond a name. Ask yourself, “do we need to redesign the program to make it as effective as possible?”
- Lead with sustainer giving.
This may not be for everyone, but we believe that many nonprofits would do well to treat their sustainer program as their lead mass donor fundraising program. So many organizations treat sustainers as a secondary offer that gets promoted a couple of times a year. This isn’t to say you don’t do single-gift fundraising. But the emphasis is on sustainer giving as the best way to move the mission forward.
- Dedicate resources to the cultivation of sustainers.
Don’t just think about acquiring sustainers — cultivate them. The biggest mistake is to treat sustainers just like any other donor. This means skipping some appeals, special versioning that recognizes their above-and-beyond giving, and opportunities to upgrade giving or ask for an extra gift.
- Sweat the details, and test, test, test.
Details can make or break your program, so monitor credit card processing, especially declines/expirations. Pay special attention to how you treat lapsing sustainers or cancellations. And test everything. Test your donation forms, your monthly giving sign-up process, your recruitment pieces, your extra gift appeals. Test, test, test.
- Map your sustainer journey to find problems, and opportunities.
Start by signing up for your own program. Was it easy? How are you treated as a donor? Get an outside, data-driven review from a firm like Masterworks. It’s amazing what an objective perspective can bring from someone not in your own organization. What would a truly remarkable sustainer experience look like?
Now is the time to focus on your sustainer program. You may want to look at redesigning your program to align with 21st century trends, and you certainly should be investing in growing it. Sustainer giving is predictable, consistent, and thanks to the Subscription Economy and generational changes, more people than ever are willing to join your cause monthly.
Dave Raley is Executive Vice President for Strategic Innovation at Masterworks, a full-service agency that specializes in moving hearts and minds to action for faith-based nonprofits. He has worked with over 100 regional, national and international nonprofits, focused on pioneering the future of nonprofit marketing and fundraising. Dave is a conference speaker and blogger, who convenes groups of top nonprofit marketers around the country. He is a member of the Alliance’s Board of Directors. Dave can be reached at email@example.com.
Carly Berna is Vice President of Marketing and Communications at Jewish Voice Ministries International, a nonprofit that exists to transform lives and see all Israel saved. Previously, she worked at the Mayo Clinic, and she holds an MBA from Pepperdine University. Carly is passionate about marketing because it is the intersection between creative thinking and data analysis. Carly can be reached at firstname.lastname@example.org.