1. Regular Givers: How to Get Them, How to Keep ThemTobin Aldrich

2. Regular Givers • Why regular giving • Recruitment • Retention • Issues • Case study • Conclusion

3. Regular giving and charities • Giving through SO and DD usually monthly • Has existed for decades • Membership organisations, Churches, child sponsorship charities • Action Aid had 25,000 child sponsors recruited door to door in 1975

4. Why regular giving? • Growth of low value regular giving pioneered in UK by Oxfam at beginning of 1990s • 1991-1997 increased regular givers from 40,000 to 400,000 and income from £10 million to £40 million • Recruited RGs through DRTV, inserts, direct mail • Followed by major UK charities (eg NSPCC)

5. Why regular giving • Introduction of Direct Dialogue (Face to face) in UK in 1998 led to further expansion • PDDs introduced in 1999 • New Gift Aid in 2000 • By 2004, 24% of UK adults giving through SO or DD

6. Examples Action for Blind People • Voluntary income increased from £4M in 1998 to £13M in 2003 • Almost entirely through investment in RG • In 2001, 72% of total exp went on FR Sight Savers International • Regular givers increased from 14,000 in 1998 to 56,000 in 2000 • RG income went from £1.5M to £4M

7. Why Regular Giving? • Predictable income • Reliable • Enables long term planning • Unrestricted income • Relatively low risk investment

8. Existing donors Direct mail Telephone Website Email Face to face New donors Direct mail Telephone Website Email Face to Face Leaflets/door drops Press TV Radio Other media Recruitment Sources

9. Recruiting regular givers • Cheaper to convert existing donors & contacts than recruit new supporters • Include regular gift messages into all communications (incl. donor appeals) • Member get member • Then look for new donors • Test as many different sources as you can • Don’t be seduced by numbers, go for value • Invest your money based on life time value of donors recruited from each source

10. Recruiting new donors • Importance of lifetime value modelling • For each source of regular givers you need to understand: cost of acquisitionvalueattrition rate Eg: direct dialogue campaignAcquisition cost £73.50 plus VATAverage gift £72 plus 75% GAFirst year attrition 40% 2nd to 5th year attrition 15% of live balance p.a. Is this profitable?

11. Is it profitable? • Allowing for costs of maintaining the relationship, inflation and 5% discount rate • ROI 2.5:1 • BE point month 18

13. Calculating ROI

14. New donor sources

15. Direct Dialogue • Is this the greatest evil since the Black Death? • Controversial • Donors may or may not dislike it • Trustees always hate it

16. Pros Reaches new, younger donor audience Donors who join by it like it Recruits Regular Givers in quantity Risk/reward calculation is simple Cons Some people hate it Press hates it Impact on brand? Attrition rates Rising costs Direct Dialogue

17. Direct Dialogue • Same things used to be said about direct mail, telemarketing etc.. • Distinguish between issues of principle and of market conditions • Market may be too congested now but that will change • Likely to remain important part of the fundraising mix • Don’t discard it unless you have alternatives that work as well or better • Leave the option to re-enter when everybody else has exited

18. Retaining Regular Givers

19. Retention • No point in all that effort if regular givers stop giving • Few charities pay as much attention to retention as to recruitment • Common mistakes:-Poor systems and procedures-Poor communications-No reactivation and upgrade strategies

20. Attrition is an issue • Depends on recruitment source-Inserts 4%-Direct dialogue 40% • Depends on quality of recruitment activity and message • Depends on cause • But it will be a problem • You must measure it and manage it

21. Systems and procedures • Don’t spend money recruiting regular givers until you have a proper database that works • Essential elements-ability to track RGs by recruitment source-ability to track costs-import payment files electronically & match to donors • Need resources to process new RGs

22. Communications • You need a communications strategy for regular givers • Different donors will want and respond to different things-How donors were recruited is a good guide to what communications they will respond to-Eg don’t send mail to direct dialogue recruits • Let donors choose what they want • Gather email addresses and telephone nos (incl. mobiles) at point of recruitment • Develop range of communications incl. non ask offers

23. Reactivation and upgrade • Donors cancel for a variety of reasons • You need an active reactivation strategy • At least 25% of donors who cancel will reactivate if asked • The more recently they have cancelled the more likely they are to reactivate • Don’t give up after one ask • Donors will upgrade if asked • Use mail and telephone for reactivation and upgrade

24. Cross market • Donors will be interested in other offers if marketed appropriately, eg:-challenge events-campaigning-Xmas gifts-emergency/one off appeals-legacies • But don’t just put them into your appeal programme!

25. Issues

26. Issues & Learning • Saturation • Quality • Communicating with & keeping RG donors

27. Saturation • Have we reached saturation point? • 50% of adults don’t have bank accounts • Intensity of activity required to produce numbers in small market • Can we maintain the intensity of activity without increasing donor resistance? • Competition is increasing

28. Quality • Agencies heavily used for donor recruitment in 2001 and 2002 • Quality was variable • Particular issues with some suppliers • Concern brought street & DTD recruitment in house in Oct 2002 • Has reduced the volume of recruits but major cost savings & quality improvements

29. Keeping Regular Giving donors • Attrition is an issue • 15% of regular givers need replacing each year • Newer recruits less loyal than existing • Attrition rate of DTD & FTF donors the highest, 25% to 30% of donors fall off in year 1. • Managing and reducing attrition major task

30. Communicating with donors • New donors may not look like your existing file • Average FTF recruit 32 -Doesn’t read DM -Moves house regularly • Communicating with these donors in the right way major challenge • Offer donors communication options • Get them to tell you what they want • Email and telephone at least as important media as direct mail • Develop communication plans for each segment

31. Concern 2000-2003

32. Concern in 1999 • Income £27M • Voluntary income £13 million -£8 million ROI -£5 million UK • Emergencies over half voluntary income • Regular giving income £1.25 million

33. Issues 1999 • Income fluctuating year to year • Emergency dependent • Market share slipping-No 2 to Trocaire in ROI fundraising market-ROI VI €7.5 million behind Trocaire-Other charities gaining ground (Sight Savers, GOAL) • Very small player in UK market outside NI

34. Concern Income 1991-1999

35. Strategy 2000 • Achieve growth based on long term reliable income sources • Regain leadership of ROI fundraising market • Double non emergency income to £15 million by 2004 • 40% of income to be from regular giving

36. Why regular giving • Long term • Predictable • Not emergency focussed • General funds

37. 2000 Plan • Significant investment (£500K) in regular giving recruitment • Test following methods:-F2F-DTD-DRTV-Inserts-Cold DM-Reciprocals-Press ads-Radio • Roll out winners

38. Test outcomes All methods worked with Year 1 return on investment >1:1 except press ads Concern Council agreed proposal to increase level of recruitment Substantially increased investment planned in 2001 Results ahead of target in 2001, led to increased investment

39. RG recruitment • 2000 6,000 • 2001 70,000 • 2002 50,000 • 2003 45,000 • Primary recruitment sources: - DTD (agency Caring Together) -FTF (agency PFP)-DRTV-Inserts

40. Concern Regular Givers (ROI)

43. Return on Investment • First year crude return on investment 1.4:1 • 5 year real-terms ROI, allows for-Attrition-Inflation-Discount rate on money invested-Cost of communications-Value of additional gifts & tax • Total 5 Year ROI 5.01:1

44. Outcomes • In 3 years Concern increased regular givers from 15,000 to 180,000 • RG Income £14.5 million in 2004 • RG 40% of total VI increased to £30 million from £14 million in 1999 • I household in 10 in ROI now has a Concern SO or DD

45. Attrition • Existing donors recruited pre 2000, 7% p.a. • New donors recruited in 2000 & 2001, 20% first year and 12% second and subsequent years • New donors in 2002 and 2003, 25% and 15% • Direct dialogue highest first year attrition (25% to 30%), inserts lowest (4%), DRTV in the middle (15%) • Attrition highest in GB, lowest in ROI, NI in the middle

46. Conclusion

47. Conclusion • You should be doing this • Do the cheap stuff first, existing donors, website etc. • Produce a robust return on investment model • Test as many recruitment sources as you can • Consider all the options • Roll out the winners

48. Conclusion • Monitor performance-cost of acquisition-average gift-attrition • Ensure that you have proper systems and sufficient resources to process donations • Develop appropriate communications plan for each segment • Develop proper upgrade and reactivation programmes • Cross sell different offerings

49. The Future • Reducing cost-effectiveness of direct dialogue • Need to develop alternatives:-telemarketing-DRTV-member get member-new media • Re-visit regular giving “products”