Regular Giving

Regular giving or one off donations: which to go for?

By Sean Triner

Fundraisers need to grow their databases, but should they invest in regular giving (automatic debits) or one-off donations?

In Australia, until around 2002, the answer was simple because regular giving was a tiny part of the fundraising mix.  Some charities tried acquiring new donors straight on to regular giving, to mixed success.  Some just added an extra line to their direct mail acquisition appeals  offering the opportunity to become a regular giver.

Then face-to-face arrived.  Not only did it acquire hundreds of thousands of new regular givers, it actually created an entire new ‘type’ of donor – a younger demographic.

Brilliant fundraising expert and blogger, Jeff Brooks picked up on this in a recent blog where he noted that: “There are younger donors … just not in America.”  He goes on to say that, “In Australia, more than a third of the charity collected each year comes from what’s called Down Under “regular giving,” otherwise known as monthly giving or sustainer giving.”

He is right indeed. About a third of individual income to professional fundraising charities appears to come from regular giving.  World Vision reports $195m of it’s $345m income in 2011 was from regular giving.  The Pareto Benchmarking report, looking at around $330m of other charities’ income, shows that over one third of that came from regular giving.  This report studied 48 different charities’ data.

Even though face-to-face has been the engine behind this growth, there still many regular givers acquired in other ways.  One significant way is by asking current donors to become regular givers, usually through a combination of phone and mail.

This ‘regular giving conversion’ process is so effective that some charities think of their ‘normal’ database as simply the means to generate leads for regular giving conversion. Charities often make a choice as to whether they should focus on regular giving or not, but the latest data from Pareto’s benchmarking shows that this is the wrong approach. You don’t need to choose between one or the other.

One reason is that most regular givers come from face-to-face. These donors are younger and hardly ever do anything except upgrade when they are phoned. In addition, they are also poor major donor prospects, with very rare exceptions. Furthermore, they are not good bequest prospects, because they are too young and not yet interested in supporting charities in this way.

The chart below shows the percentage of donors in various categories who have informed the charity they have mentioned the charity in their will.

In general, face-to-face donors are clearly not interested in putting charities in their will. The other reason you don’t need to make a choice for or against regular giving is that nearly all non-regular donors will not become regular givers, no matter what you do.

The chart below shows second gift rate by charity within 12 months of acquisition.  It shows the proportion of those second gifts that were the beginning of an automatic payment method (blue), or another one off donation (organe).  Each column is a different charity.  The black lines match the right hand axis – this is the number of new donors acquired by each charity, the orange block is the percentage that had made a second gift within twelve months, and the blue shows the percentage whose second gift was the first of their automatic debits.

Put simply, most new non-automatic debit donors don’t become regular givers within 12 months – even for those charities trying hard to get them to do so.

On the other hand, what of people who came straight in as regular givers?  The chart below shows the total contributions of all donors acquired straight onto regular giving by the channel that was used to acquire them.  Face-to-face accounts for well over two thirds of these donors, and only a few per cent are from online. The little crosses go with the right hand axis and show the ‘ratio’ of giving compared to first gift after four years.  The left is the average total given by donors acquired through that channel straight onto regular giving.

For example on average, face-to-face donors will have given around 25 times their first debit – about $650 – after four years whereas a donor acquired straight to regular giving from a direct mail piece will have given around 45 times their first gift – about $900.

The blue is income from regular giving, and the orange is additional income from other donations.  The face-to-face donors across these charities gave insignificant amounts on top of their regular donations and the direct mail donors gave about $50.

So, we see that most of the value from regular donors is from those regular gifts and little from additional donations.

It is hard to get regular givers to give additional gifts and it is hard to get non-regular donors to become regular donors.  But you as a fundraiser really need both types of donor.

Don’t choose between regular giving and one off – do both.

Australians gave more to charity in 2011 than ever before

By Sean Triner

The latest Pareto Benchmarking figures – derived from looking at actual transactions across 45 charities in Australia and New Zealand – revealed that Australians gave more money to charity in 2011 than ever before. Double checking annual reports of the largest fundraising organisations not in benchmarking confirms it was a good year.

Regular giving (automatic debits) has grown enormously over the past ten years. In fact, for professional fundraising organisations such as Cancer Council NSW and WWF regular giving accounts for more income than ‘one-off’ donations.













As you can see from the chart above, across the group, around a third of individual gifts came from bequests, a third from regular giving and a third from occasional donations such as those sent in response to direct mail.

Direct mail had been pretty flat over the last few years, but has begun a new resurgence in growth as new creative approaches lift response rates from around 1% to over 4% for many charities. This is from sending letters to people who had not previously donated to the charity.

We expect this growth to accelerate as more and more charities have recently succeeded with their early tests. However, it can take a long time for them to accelerate their programs so the growth will most likely be reflected in 2013 data (to be presented in 2014).

Face to face (people on the street, knocking door to door and asking for monthly pledges) goes from strength to strength, with these 45 charities acquiring more donors through face to face last year than any previous. The only thing holding back further growth in this area is capacity from the face to face providers – they are mostly full up.

But it is not all rosy on the face to face front – one charity in the group lost 60% of its new face to face donors within one year. The average is around 45% but the best manages to keep most of its donors, with only 36% attrition.

Australian and New Zealand charities can join Pareto Benchmarking for free – email

New Donor Diagnostics

By Andy Tidy

Wouldn’t it be nice if when you recruited a new donor, you knew how much they would be worth in the long term? All donors are not equal, and they don’t behave as if they are, so identifying their differences and adjusting the program they receive accordingly, is the key to maximising net income and achieving the best long term return on investment.

The question that needs to be addressed is ‘what are the metrics that need to be monitored that will allow you to see as early as possible how valuable a donor, or a group of donors, will be and how they should be treated?’ Depending on your recruitment mix, these will vary.

Regular Giving Recruitment

For regular giving recruitment, the key performance indicator that needs to be monitored is attrition. Three month, six month and twelve month attrition will identify any issues there may be in the short and medium term. For a long term view, it needs to be measured over two, three or four or more years. Attrition is usually represented as a percentage of recruited donors but there are other ways of looking at the impact attrition has.

The average number of payments made by donors who stop giving is a useful comparator. For example, if the attrition of your regular giving recruits is heavily skewed to the first few months, then you will get fewer payments per lapsed donor than if the attrition is more evenly spread out over the year. This will have the effect of increasing the amount of “lost income” – defined as the difference between the expected income from a regular giving recruit (12 times the monthly value) and the actual amount received. The lost income amount provides a tangible financial value to the attrition.

Upgrade likelihood is another metric that will contribute to long term value, monitoring the proportion of active donors that have upgraded, and the value of the upgrade allows you to monitor the contribution your upgrade program makes.

The last element you need to consider for RG recruits is their propensity to make additional contributions. This is usually in the form of a response to a cash appeal. The recruitment channel is usually the main determinant of whether a regular giving recruit will also make cash gifts, but there can also be variation by list source, payment type, age and other variables.

Once these metrics have been calculated, the next step is to look into any underlying variables that influence them. These will include channel, age, payment method, agency (if Face to Face), DM list and gender. Monitoring and slicing by these factors will allow you to pick up any sub groups that are over or under performing, and adjust your strategy accordingly.

Cash Recruitment

When we look at a cash recruitment program, the metrics that need to consider are different.

Second gift rate is usually the first that is measured. As per attrition for regular givers, this can be looked at after three, six and twelve months. What needs to be measured, along with the second gift rate, is the value of the second gift as this will be a key factor in the long term value of the new recruits. Donors that upgrade on their second gift are flagging to you that they have the potential to donate more – looking at the asks these donors receive will help maximise their long term value.

Along with second gift rates and value, the number of subsequent gifts per year will be a driver of long term income. Those recruits that respond to multiple appeals in the year following acquisition will go on to be some of you best donors. The proportion of new cash donors that convert to regular giving will vary depending on your strategy – testing of the best approach is ideal if you have enough recruits.

Ongoing Costs

The final element in any assessment of the long term return from acquisition is costs. The recruitment cost is fixed at the time of acquisition, but the ongoing costs can be controlled. By looking at the performance of the new recruits using some of the metrics outlined above, it is possible to quickly ascertain which donors justify the extra expenditure – such as donor care – and which groups of donors need to be cost managed.

Cost management of donors is particularly important if the recruitment contains large volumes of low value one off recruits. These donors need to be given the opportunity to make additional gifts, but by keeping an eye on their net contribution we can make sure that the program as a whole is not compromised by their poor return. In the same way, monitoring the return from upgrade, additional cash asks and reactivations to regular givers will ensure the net return is maximised.

Creating reports to look at the performance indicators above, when combined with campaign analysis of the initial acquisition, will allow decisions about acquisition and donor development strategies to be made promptly and therefore profitably.

If you need assistance with recruitment analysis and planning, we’d love to help you out. Give us a bell on 02 8823 5800 or email us at

Downgrading: when asking for less results in getting more

By Jonathon Grapsas

For years some of my colleagues and I have been banging on about the need to seriously consider actively downgrading regular, monthly donors.

Are you going mad, Jonathon?

Possibly, but not on this one. The rationale is simple. There are certain groups of regular givers for whom we know, statistically, they are likely to stop their ongoing giving. Their characteristics have predetermined that they’ll fall out of love with us really quickly and hence cancel their gift.

I’m talking about ‘younger’ face to face recruited donors. By younger I’m talking under say 25 (may vary by client).

We look at data for F2F donors every day. Whenever we run the data through some geeky data modeling, its spits out the same result every time. Younger donors are more likely to stop their giving in the first 3 months than ‘older donors’. There are other criteria that dictate attrition levels, like payment type and housing type, but hands down every time age is the most significant variable.

So for me its always been simple. If we know statistically that a group is likely to cancel, would we not be better off tackling this head on rather than sitting back waiting for the inevitable?

Well, I was incredibly excited a couple of weeks ago when a Canadian client shared they have been doing exactly this. And guess what, it’s working.

Of course, by working you need to ensure that the drop off in income from either doing nothing and the lower average gifts is offset by more supporters staying on board.

Let’s do the math.

Scenario A. I have 1,000 donors giving me $20 a month ($240 a year). The data shows me that I’ll likely lose (because of the make up of the data) 300 in the first 3 months. So my $240k in annual income is, in crass terms likely to be around $168k if we do nothing.

Situation B. What if we took the 300 “likely” cancellations and asked them to consider dropping down to $10 a month? Assume of those 300 two thirds of them say yes, the other 100 we can’t reach of decide to cancel anyway. We now have 700 donors @ $20 per month and 200 donors @ $10 per month. That means my annual income is now $192k, a far better result than sitting on our hands and doing nothing.

There are a few things to consider here:

– Do it on the phone. Make sure the call is intended as a donor care one, not an administrative one. Thank, check in, share, acknowledge. Then discuss their giving level and how comfortable they are.

– Test the timing of this. Likely done best around month 1 after sign up, but play around with this. See what works for you.

– Just because someone may agree to lower their financial commitment, don’t forget them. F2F recruited donors need to feel the love, albeit in a slightly different manner. They don’t behave like donors from ‘traditional’ media. Long letters and dry newsletters are a waste of time. Punchy, shareable and relevant content all the way.

If you do this, let me know how you get on.

When asking for less means getting more. Sometimes direct response just doesn’t make sense.

What’s in a name?

By Sean Triner

“What’s in a name? That which we call a rose By any other name would smell as sweet.”

William Shakespeare, through Romeo and Juliet, may have had a point. But actually, a common knowledge is useful, especially in teaching.

I presented two sessions at AFP last week, to a mostly American audience and spoke about two things – what we in Australia call regular giving and a method of recruiting them, called face to face.

By regular givers, I mean someone who has money debited automatically again and again in an agreed time period, usually monthly.

By face to face, I mean the act of speaking with someone, in person, and asking them for such an automatic donation.

These two names don’t really work.

To many fundraisers, a regular giver is, understandably, someone who gives – um – regularly. This could include people who donate every Christmas. So regular givers is not the right term. The Canadian approach is to call them monthly givers, but this doesn’t quite work either, since some are quarterly and some are fortnightly.

As for face to face, many fundraisers have, for decades, referred to the act of asking major donors for money, in person, as face to face. So this confuses people. Even if you define what you are talking about, people need to train their minds to the crossed meaning, which reduces the impact of the point of the teaching.

My proposed solution is to grab the best descriptions that exist and make them universal (for English speakers anyway – I don’t know where to start with Chinese or Spanish equivalents).

I recommend for monthly donors / regular donors / automatic debitors we take on the American descriptor: “Sustainer”. It makes sense, isn’t a re-branding of the word and is not ambiguous.

For face to face / street fundraising / chugging we should go with the old British descriptor: “Direct dialogue”. I won’t even complain about the inevitable American misspelling (dialog) which is more environmentally friendly anyway. (Think about it).

Anyone want to help me with the re-branding campaign?

First presentation at AFP: Monthly giving online

By Sean Triner

Here is my first presentation from the AFP Conference – I hope that you find it useful, whether you were there or not.

AFP 2011 – Harvey McKinnon on monthly donors

By Sean Triner

Blogging from Harvey McKinnon’s session at AFP. He is talking about ‘How to Build a Highly Successful Monthly Donor Program’

Right from the beginning, some data – all organisations should be able to get 5% of their current donors to monthly giving. Some will get 20%.

Shocking! Of 300 or so fundraisers, no one put their hand up to having more than 5,000 monthly donors. Nearly all had less than 500. But at least half had some form of monthly giving program.

The USA really is behind Europe and Australia on embracing and growing monthly giving.

Why bother?

Monthly programs…. 1. Increase income – value of the donor will at least double 2. Better relationships 3. Donors stay longer – monthly donors stay for ten years on average 4. Predictable – the money just keeps rolling in 5. Savings 6. Income grows over time 7. Convenient for the donor

Although some monthly donors make their payments by cheque, as opposed to EFT or credit card, they tend to be worth half of their automatic debited peers.

Myths about monthlies…

1. It didn’t work – it may not work straight way, but you need to get the proposition right 2. Small amount of money – it is a lower average donation, but not over a year 3. Worries about access to bank and credit card info – insignificant number of people 4. Are donors too old – some old people will sign up, it is still worth it

So, you want to start a program? What are the essential components.

1. A donor base 2. An appealing mission – accept that some organisations are easier to fundraise for, but it works for pretty much every cause that can get single donors 3. An audit – what are you doing well? 4. Effective processing – must debit quickly and act when people drop off 5. Strong communications 6. Integrated marketing – don’t talk about it, do it 7. Senior management support

Harvey was saying to take people out of general direct mail appeals programs once they become monthly donors. He did say there are some caveats, but we find that monthly donors who used to respond to direct mail appeals should still get them – but perhaps fewer, and always personalised and recognising their monthly donation.

How much to ask for?

Try and tie the amount to something specific. ‘Your $50 a month will buy…’

According to Harvey, the easiest method of gaining some monthly donors is having a monthly option on forms. This has worked really well for many charities, but at some point you should send specific monthly donor asks (my opinion not Harvey’s).

Phones are a great way to do it too. In his opinion there is not a lot to decide between the phone and mail. I say do both.

Harvey reckons that face to face (direct dialogue) can be too expensive to start for smaller organisations.

Age is a huge factor on early attrition in Canada. This reflects the pattern in Australia. His data shows that average donations effect attrition too. The higher the average, the worse the attrition. To fix, always proactively downgrade young donors giving higher amounts.

Greenpeace and Amnesty are pioneers of monthly giving fundraising – check out their websites. They ‘slice the salami’ – 33c a day etc.

Was shown a direct mail stoning pack – sending stones the same size as those used to kill women accused of adultery. It was a campaign, but all responders were asked for monthlies. They got 25,000. (I think he said that much – it is a lot!)

Monthly programs are worth it. For example, a specific charity where the average monthly donor gives 6x as much as their non monthly counterparts. It takes a while, but it is brilliant.

You should look after the donors though. Send them invites to special events, open house, send cards – give them a good experience.

Great session. If you are at a conference and Harvey is speaking, even if you know about monthly giving, you should go watch him.

For more on monthly giving, search my blog for ‘regular givers’ and ‘fundraising is beautiful’ and listen to this podcast.

Don’t forget direct mail cash donors

By Sean Triner This article was first published in Fundraising and Philanthropy E-bulletinin July 2010

Are you focusing on regular giving so much that you may actually miss out on significant funds from good old fashioned cash donors?

After years of banging on about regular giving, I think it is fair to say that many charities now get it – regular giving is the thing to do.

In collaboration with 33 charities in our benchmarking cooperative, we analysed the donations of 127,583 people recruited in 2005 and found that after four years, the average mail appeal ‘cash’ donor, or direct mail (labelled DM cash in the chart), has given $163. A regular giver recruited through mail at the same time (DM RG in the chart) gave $597 and a regular giver recruited through face-to-face (F2F RG in the chart) had given $569. The chart below compares these three types of donors, and extrapolates over ten years – but does not include bequest potential.

Huge growth in regular giving

Yes, the big growth is in regular giving. So is the consistent, safe money. And non F2F RG often contributes new donors to the appeal pool.

According to our analysis it would appear that more money is raised from regular giving than cash appeals. Whilst this data is across a specific pool of charities, a quick look at the annual reports of top fundraisers World Vision (who raise about the same as the 33 charities added together), Oxfam and Compassion backs this up.

Are you missing out on a pool of donors?

Many smaller charities have yet to take on regular giving, but applying the Pareto principle (less than 20% of charities raise over 80% of money) we can safely say the Australian fundraising sector- and Australian public – have embraced automatic debits as a great way to donate.

But, it still only accounts for half of donors. A few years ago the British fundraising press was full of stories about the reliance on regular giving (especially recruiting by face to face), leaving UK charities without a bequest pool. It also cited research that a greater proportion of donors wanted to give sporadically rather than through regular giving. This meant that regular giving focused programs were missing out on a huge donor pool. And I mean huge. Whilst all the spotlights have been on regular giving, the fact is that regular giving and cash together just manage to raise slightly more than bequests from our 33 benchmarked charities’ $1.5 billion income over the last ten years.

The bottom line?

The final piece in this puzzle is all in this bit of data from my genius colleague, Andy Tidy. He looked at all non-F2F recruited donors who had made a transaction (that is, donated in some way) in 2009, and had supplied their date of birth. With 83,326 people fitting this criteria he then looked at how likely they were to be a regular giver (42,374) and how likely they were to be a confirmed bequestor (2,716).

The bottom line is that older people are more likely to be confirmed bequestors and less likely to be regular givers.

So older people are slightly less likely to choose to be regular givers than younger people (which depends on lots of other factors as well, but it is a trend). Of course older people are, ahem, more likely to die and therefore good bequest prospects.

Ignore cash at your own peril!

Regular giving is brilliant – the best thing to happen to charities in the past decade by a long shot. But charities ignore cash at their own peril. Nonprofits which include cash donations as part of their fundraising strategy will build up a great pool of older donors. Provided nonprofits have a good bequest program, this will likely go on to raise much more through the tiny proportion that leave bequests than all their collective cash donations. And it is generally cheaper to recruit cash donors.

Have a balanced portfolio

All this conflicting information! What are we to do? We have spent so much energy and time trying to persuade boards and bosses to invest in regular giving, why should we go backwards.

The answer, of course, is a balanced portfolio. Don’t panic, no big rush. It’s just about making sure your regular giving program is up and running and that you are acquiring more new regular givers than you are losing.

But if you have got that going, then dust off the old rules of direct marketing and start thinking how you are going to recruit some of those older donors not willing to give you an automatic debit.


For more information about the Pareto Fundraising Benchmarking program please click here