Netflix Model Turns “Donors” Into “Subscribers”
February 6, 2018 Mark Hrywna
Nonprofits have been taking a page from the likes of Netflix and other subscriber services, suggesting donors make it a monthly gift each time they make a contribution. At least anecdotally, it seems monthly giving programs have taken over a prominent space on websites and in other appeals.
City Harvest established its monthly giving program about 15 years ago and the program has steadily grown. The number of donors and revenue doubled within the past five years, according to Robyn Rocondino, direct response officer.
“A lot of donors are turning to the web. Because of that, it’s just easier to join,” she said. “We make sure monthly giving is a mainstay on our home page, in all general donation pages and email solicitations.” Rocondino added that they make a point to ensure the ability to give on the web is never more than two clicks away for a user. About 72 percent of donors viewing the monthly giving sign-up page are on desktops. Revenue from monthly donors in the most recent fiscal year will account for about 6 percent of the direct response budget.
Monthly donors to City Harvest are called “Rescue Partners” and consist of about 4 percent of active donors, slightly more than 1,000 supporters, according to Rocondino. The typical “Rescue Partner” remains committed for about three years and the average gift is about $30. The longest tenured donor to City Harvest started giving in 1985 and joined the “Rescue Partner program” at its inception.
One of the factors at play with monthly giving is technology making it much easier to be a sustaining donor, according to Una Osili, director of research at the Indiana University Lilly Family School of Philanthropy. “In the past you had to sign up for payroll deduction or other ways that organizations had to get that gift,” she said. “Now when you go online to give, even on mobile, it gives the option of giving monthly,” she said.
About five years ago, the Contributor Development Partnership program, which has public television and radio stations from more than 100 cities participating, started to encourage public television stations to significantly boost sustainer efforts, according to Chuck Longfield, chief scientist at fundraising and technology firm Blackbaud. Stations in virtually every city began promoting monthly giving on-air and as a result, donors as well as other nonprofits saw the increased promotion, which might have led to other organizations seeing an increase in monthly giving.
There’s also the increased popularity of streaming services that automatically bill on a monthly basis, such as Netflix, Pandora and Spotify, making consumers more accustomed to it. “The consumer economy is a sustainer economy; that makes it easier for nonprofits to attract monthly donors,” said Longfield, who authored a two-part Blackbaud study about monthly giving titled, Sustainers In Focus.
New donors who started out as single-gift donors but later converted to sustainers have fared the best among donors who did not become sustainers or one-time donors acquired in 2006. By 2015, 29 percent of those 2008 sustainer converts remained active while only 14 percent of the 2008 single-gift donors who first gave in 2006 were still active supporters. The study suggested giving the sustainer program a special role in the annual financing of the organization’s mission by having it fund one important program or aspect of annual operations. And just as many nonprofits have done, Sustainers In Focus suggests making monthly giving the website default.
Catholic Relief Services (CRS) had multiple monthly giving programs about 15 years ago, specific to different areas of the organization, all with different names and pitched to somewhat different audiences. “Maybe it was a good idea at the time but we realized it was not sustainable to have multiple monthly giving programs,” said Emily Anderson, director of annual giving at the Baltimore, Md.-based charity.
Recruitment to “Footsteps In Faith” wasn’t much more than one direct mail invitation each year, up until about a decade ago. Today, that’s two appeals per year but each has a follow-up, initially only an ask but the second will ask for a monthly gift. “It’s really just asking, pushing for that monthly gift, and talking in the first invite about monthly giving and why it’s so important,” Anderson said. “It creates a bit of a campaign feel around it.”
At any given point, CRS has about 300,000 active donors with about 10 to 15 percent of those being sustainers. That’s up from about 8 to 9 percent of donors about five years ago, “before we really started promoting it in the way we are now,” she said.
During the past five years, the Footsteps in Faith program has grown from about 20,000 donors to more than 28,000. “The growth has really been the result of the level of investment and recruitment,” Anderson said. Monthly giving is the leading ask on the CRS “How To Donate” page, which was not the case several years ago. It had been buried under 12 giving options, she said.
The first month can be a bit of a key hurdle when it comes to retention. People might change their mind or agree over the phone because they want to get off the phone, or they signed up for monthly giving thinking it was a one-time gift.
Promoting “Footsteps In Faith” in the mail and via email mirrors the direct mail campaign, along with some general digital ad displays online that at times highlights monthly giving. CRS also has been recruiting by phone in the past two years.
Online is still the most popular channel for sustainers to join, followed by phone and direct mail. “We look at retention a lot by method of payment. EFT [Electronic Funds Transfer] is by far the best,” Anderson said. “We are highlighting EFT as the optimal method of payment,” she said, though CRS still accepts monthly donations by credit card and check.
Almost half of monthly donors to CRS give via EFT and more than one-third through credit cards; more than one in five still give by check. Sustainers typically stay on for two to three years, according to Anderson. The average gift to “Footsteps In Faith” is about $41, varying slightly by channel, with a couple of dollars more via credit card.
The majority of sustainers at City Harvest give via credit card but there’s still a good portion who send checks and request an invoice, Rocondino said.
There’s an understanding that monthly giving is cost effective and a good way to keep donors engaged over the long term instead of just a one-time gift, according to Osili. The nonprofit sector as a whole also has focused more on retention, she added, examining what models are working and what tools are available, whether it’s mobile, text or online, so it’s a recurring gift.
“Think about companies that give you monthly statements,” she said. “Charities are realizing lower cost to have that option set up from the beginning, where consumers can make that commitment at the beginning of the year,” Osili said.
Nonprofits generally shift monthly sustainers into a different bucket of direct response, to not send as many solicitations but steward them along, informing them of the impact of their gifts.