happy donors

I’ve written before about the risk of using a standard HPC (Highest Previous Contribution) as the base for ask amounts.  In sum:  When I give $100 in an inspired moment of generosity, you might lose if you forever thereafter ask me for “$100 … or $150″ ($HPC … or $1.5HPC, a standard ask string in mail fundraising).

HPC works fine for $20, $50, maybe $75 donors.  Asking for 1.5HPC can be a good way to upgrade.

But testing has shown (not always) that using MRC (Most Recent Contribution) as the baseline in a housefile ask string can provide enough of an increase in response rate to offset the increase in average gift that can be gained with HPC.

Example:  People who gave $50 last time are willing to give $50 again.   People who gave $50 last time but $100 last year may be more willing to give $50 again, but won’t give at all when you’re lowest ask is $100.

All to be tested with each organization, of course.  If you’re using HPC, test MRC.  Or test MRC with specific giving segments.

E.g., use HPC for “up to $50″ donors.  But test MRC with “$100-$250″ donors.

Or, another option, that I haven’t seen tested.  (It may well be in use, but not reflected in my mailbox.)

For donors whose MRC was anything under $50, ask for $1.5MRC or $50 — whichever is lower.

For those $50-$90, ask for $100.   For those $90 to $145, ask for $150.

Whatever.  The idea is to incrementally upgrade donors by tier.  Rather than what can be a very odd assortment of dollar values that puts some people at risk of not giving because of some perceived ask amount barrier.

Another way of looking at this:  Why does retail price at $9.99 instead of $10?  A perceived pricing barrier.   The $9.99 feels more affordable.

For donors in the $50-$90 range, getting a gift of $100 might be a perceived big step.  Getting them to $100 could be a big cultivation point.  Once there, $150 is in sight.

But the same donors won’t move to $100 if their last few gifts — their MRCs — were $75, even if their HPC three years ago was $125.

Headache territory for fundraisers who aren’t into the statistical side of things.  I notice this because I gave “adoption” business gifts a few years ago that raised my HPC above my regular giving level.  And I made the mistake (?) of one big gift inspired by a great plush toy adoption offer a year ago, again elevating my HPC beyond general comfort for the organization’s housefile appeals.

I made an online donation to a small organization last week, a little disappointed they used a third-party collector for online gifts, then delighted that www.donortownsquare made the monthly giving option as prominent and easy as my one-time gift.

Nothing against operations that help small nonprofits with online transactions.  When you can’t  afford the set-up and have very little online giving, third-party is a great way to go.

The downsides are:

(1) Savvy donors know that a chunk of their donations go to someone else.  Some services’ have an interface that invites the donor to give a bit more, so the organization NETS the intended gift.  Good for the nonprofit, but not the ideal donor experience.  (All should know that credit cards eat some of our gift, but that’s the cost of doing business online right now.)

(2) Use of third party can make the group too comfortable to take the next step toward effective online giving, i.e., setting up a proper transaction system.

All that aside, I applaud Donor Town Square for making monthly giving an easy and evident option.  (Network for Good does this, too.  I haven’t checked others.)

Monthly giving has been the prevalent way donors support a cause in Britain and Europe for decades.  In the last two years, monthly giving has gained great traction in the US, representing a  cultural shift among donors, who are now more comfortable giving this way, and among organizations, increasing comfortable ASKING donors to support them in this sustaining way.

Groups with strong monthly giving programs are relatively safe from economic shifts.  These donors have lower attrition, hence greater lifetime value.  They also find that monthly givers donate to special appeals, bumping up lifetime value yet more.

How do they get people to make the shift?

Adding a monthly giving ask to house-file appeals will bring some in, though it also slightly risks lower performance from the appeal overall.

Phone works great for many groups.  Select a fairly strong donor profile and call them.   Phone is a relatively costly medium, but see above for the pay off.  When calling, go to credit card donors first!   Many of these are ONLINE donors, prime target for phone appeals of all kinds, and for monthly giving via credit card best of all.   (Obvious if you think about it.)

Direct transfers from checking accounts still lags behind month credit card debits, both a cultural issue and a reflection of the relative ease of setting up each system.

Still in “emerging” status in the US:  face to face.  Mall intercepts have been successful in UK and Europe for many years, pioneered by Greenpeace as I understand things.

US groups have had great success with mall intercepts and, some, with door to door.

Whatever the means of acquisition, monthly giving is a great way to grow.  A big-lead donor upgrade that more may welcome that you now believe.   Give it a shot.