Guest Post: Full on Nerd — What Maximum Donor Consistency Means for Your Fundraising

Full on Nerd- What Maximum Donor

I’m a big fan of What Gives, so I talked to Maeve about dropping some of my giving research nerd on the topic of donor consistency.

Why talk about this? Consistency in giving matters.

It could matter a whole lot for your program. I’ll show you why, if you can agree to nerd out with me for a moment.

First, two definitions:

Maximum Donor Consistency (MDC): This is the longest stretch, year to year to year, that a donor has given consecutively. To determine a donor’s max consistency you look for the longest number of “years in a row” a donor has given in any amount. If a donor gives for 4 years, skips a few years, comes back for a few, their MDC will be 4 until they exceed that stretch.

Lifetime Donor Value (LDV): This is the total amount that a donor has given during their lifetime – along with any eventually received bequest – to any fund, cause or project with your organization. People who buy cars also buy oil changes, parts and service from a dealership (and some buy more cars). Donors contribute to annual funds, special projects, reunions, crowdfunding campaigns (and some also make big donations with major or planned gifts).

If there was a simple linear relationship between these two things, or the hypothesis: “consistent annual donors give more over their lifetimes” was true, a graph would look like this:

ldvmdchypgraph

However, if we switch the hypothesis and say: “consistent donors are more likely to increase annual gift amounts over time and also make major gifts”, then we should see a curve. The plot won’t be straight; it will slope up over time. The steeper the slope of the curve, the more lifetime giving from donors with higher consistency.

What do we actually see? We borrowed data on all gifts from alumni to eight higher education institutions and graphed it out. Here’s how it looks:

max donor consistency and LT giving donor study_w_curve

You see the curve? Consistency seems to have a significant association with donors giving more over time. The annual giving program is warming up a bunch of future major donors as well. The relationship isn’t just positive, it’s exponential.

This phenomenon is likely one of the reasons that that Nonprofit Research Collaborative told us last year that programs with annual funds are more likely to be on track with total fundraising goals and is confirmed when fundraisers say over two thirds of their major donors were regular givers.

Warming donors up with regular giving and becoming a part of their lives is absolutely crucial in increasing giving over time and building your donor pipeline.

How do you maximize donor consistency? Personalization matters. Recognizing a donor’s history, referring to it, and tailoring your appeals to consistent donors is worth the time it takes.  Many organizations are also establishing consecutive giving societies as well.

You might have to also consider when a donor seems to be lapsing, or has told you they can’t contribute this year, asking for a smaller amount to keep them on the rolls for another year. It’s controversial, but there does seem to be merit in establishing consistency early in the relationship.

The biggest mistake I have seem organizations make is focusing on broadcasting their donor base with appeals (which is important) but failing to be responsive to what a donor or group of donors is doing. For example, few organizations run a list of “consistent donors who are about to lapse.” They just send more appeals.

I have also heard that some organizations are being drawn in by big major gift totals and pulling away resources from annual giving because it is expensive. The impact to the future major gift pipeline could be severe.

Overall, the idea is that you should be considering the long-term relationship, judged by maximizing consistency, at least as much as you are considering the bottom line cash.

This special relationship, when it is recognized, reinforced and valued is also likely to provide a great deal more joy to donors.

Focus on long-term, incremental relationships while you hunt the big money. You’ll be rewarded with a sweet curve rather than a straight line in your increasing results.

nerdyannualgiving3

Read more about getting nerdy with donor behavior in this RNL blog post, and check out our full blog for this and other fundraising topics.

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Written by Brian Gawor

Brian Gawor 2

Brian Gawor is Vice President for Research at Ruffalo Noel Levitz, a platform company that helps institutions and charities build loyal donors.

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