Study Proves Triple-Digit Revenue Hike From Sustainers
October 27, 2016 Andy Segedin
National Harbor, Md. — Fundraisers are frequently hungry for more donors and revenue, but they might be leaving both on the table by not diving into sustainer programs. In fact, converting donors to sustainers could result in a post-conversion revenue increase of up to 300 percent.
“Sustainers in Focus,” the first report published by the newly formed Blackbaud Institute for Philanthropic Impact, was released yesterday at bbcon, Blackbaud’s annual nonprofit conference. The report’s purpose was to dig into how much better the outcomes of sustainer giving can be as compared to other donor models.
The “Sustainers in Focus” report is the first in a series on the subject. Institute leaders are in the process of conducting written surveys and interviews with collaborating organizations to get behind the how and why of sustainer programs’ apparent value in retained revenue and return on investment.
Sustainer programs have the capacity to both double average gift size and retention, thus doubling overall revenue from the same number of people, according to Chuck Longfield, Blackbaud chief scientist, author of the report, and founder of Target Analytics. The fundraising method is more popular in Europe than stateside, though its imprint is growing, he said.
Fundraisers are often looking to do three things: retain quality donors, grow value and find more such donors. Sustainer programs are able to achieve all three, Longfield said in an interview with The NonProfit Times during bbcon. While many organizations dabble in sustainer programs, relatively few are firmly committed to them, he said.
Longfield said he analyzed hundreds of organizations, settling on 12 with fleshed-out sustainer programs, what he found was strong parity from organization to organization.
The study breaks out the 10-year giving data from one of the organizations. The organization received 76,982 single, first-time, non-sustaining donations in 2006, averaging $38. The average gift among this group dropped precipitously to $8 per original donor in 2007 – a product of attrition – and as of 2015 only 3 percent were still giving – $2 per original donor.
That same year, the organization received 14,143 new donors who made a sustainer gift that same year, averaging $54 per original donor. That subgroup topped out at $61 per original donor in 2008, before sliding down at a more gradual rate than non-sustainers, resulting in $11 per original donor in 2015 with 13 percent sill giving.
The biggest revenue-driver was new donors in 2006 who didn’t give a sustainer gift until 2008. Those donors’ engagement topped off at $171 per original donor in 2008 and kept at $73 per original donor in 2015, above 2006’s $66 average, with 10-year retention levels at 29 percent. It is hypothesized in the study that the reason for the increased value of this type of donor is that they had already shown retained support at least once before taking the step to be a sustainer.
The donation pattern mirrored that of the other organizations examined, Longfield said. A look into a broader pool found that average two-year revenue changes between pre- and post- sustainer conversion was in the triple digits across many subsectors, most notably:
* Public and society benefit organizations, 250 to 300 percent;
* Human service organizations, 200 to 250 percent;
* Higher education organizations, 150 to 300 percent; and,
* Environmental organization, 150 to 190 percent.
In addition to sustainer program’s ability to double-up on revenue, Longfield highlighted the relative uniformity of data across industry subsectors, meaning that the strategy tends to work for all kinds of organizations. Longfield referred to his oft-used line about how, in the medical profession, if significant resources are invested on a treatment proven to be effective, doctors won’t question the use of the treatment. Nonprofit leaders, curiously, are more skeptical. “The default should be that you are the same as everybody else,” Longfield said.
A counter example that could be a weakness in sustainer programs is that while the average donor gives to multiple organizations it is unlikely that the same donor will serve as a sustainer for many different organizations. Thus, the key for sustainer programs is to secure donors early on in their giving lifespan.
Millennials, through their other spending habits, might find themselves comfortable with the way sustainer programs are supported — more likely to give $25 per month than $300 in one chunk annually, though the contribution is the same. Younger donors are already used to paying small sums automatically each month through purchases such as Netflix or Spotify subscriptions, he said.