Regular Giving Fundraising Tech to Help Recession-Proof Your Fundraising

Katrina – 15 September 2022

The importance of regular giving cannot be overstated as it provides a solid stream of predictable income each month. It is also one of the best ways to diversify your fundraising revenue, helping to reduce reliance on appeals and more effectively recession-proof your nonprofit.

So how do you protect your regular giving program from the impacts of rising fundraising costs and inflation?

Staying on top of your regular giving retention and conversion strategies is key and using new fundraising technology like Dataro’s AI Predict and Fundraising Intelligence are you secret weapons, helping you to leverage your existing donor data in ways that drive results.

With this in mind, we wanted to share some important regular giving trends and insights, plus key strategies to help you protect your regular giving income during this current period of economic uncertainty.

What happens to regular giving in times of uncertainty?

Converting existing cash donors and reducing churn are two of the most cost-effective ways to protect your regular giving program from the impacts of inflation and an economic downturn.

That’s because as consumer confidence drops and donors feel the pinch of rising costs we tend to see a drop off in giving, including regular giving. Rather than reducing the level of their monthly gift, donors typically reduce the number of charities they support – so you want to do everything you can to retain your regular givers’ support (read on for our top strategies).

Analysing the data from our growing data pool of +100 global nonprofits (with 20 years of retrospective data), we consistently see this trend play out in periods of economic downturn.

In particular, when COVID happened, consumer confidence declined and we saw an increase in the amount of donor churn and a reduction in recurring giving revenue. Importantly regular giving drove the recovery of many nonprofits post-pandemic, so protecting your regular giving program is key to weathering the storm and ensuring a speedy recovery.

To learn more about how the uncertainty of COVID impacted recurring giving, read our blog here. 

To learn more about Dataro’s Fundraising Intelligence and benchmarking data pool, read here

Regular giving churn has increased again in the last 12 months

In 2022 Dataro is already seeing early evidence of the impact of inflation on regular giving churn. 

Because donor churn is a lagging indicator, it takes a while to understand churn metrics and how the trend will play out. But already, Dataro’s analytics reveals the typical charity is currently seeing an increased level of regular giving churn, particularly over the last two quarters. 

So what does that mean for nonprofits – retention is going to get harder!

In uncertain times fundraisers need to work smarter and leverage all of the donor data available to them to inform their fundraising strategies and give them the best chance of success. Dataro’s Fundraising Intelligence tool is helping fundraisers to identify important trends in their data (and the sector) as they are happening. This can help give them a head start to improve donor retention and reduce the impact of inflation. 

Using Fundraising Intelligence nonprofits can proactively measure their regular giving KPIs against live industry benchmark data from +100 global nonprofits to better understand their performance and help identify trends and performance gaps and discover new opportunities.

Cash donors who convert to regular givers are retained longer, with 2x higher LTV

Dataro’s analytics reveal that newly acquired and converted regular givers typically have the same average gift size. However regular givers converted from other fundraising activities have almost twice the lifetime value (LTV) of newly acquired givers, because they are retained for longer.

While acquisition plays a role in growing your giving program, converted donors have a much higher ROI because they are less costly to acquire, have higher retention and deliver a greater LTV.

Converted Regular Givers Have 2xHigher LTV Compared to Acquired Regular Givers

Unlike the set and forget segmentation approach, Dataro’s donor propensities are updated weekly in the charity’s CRM, as our machine learning models analyse all of the data and pick up on new changes that are happening live in your donor database. Plus we add new ML models regularly. That means your campaigns are based on the most recent data and most recent donation history. 

So as fundraising costs continue to rise, conversion is the most cost-effective strategy for building stability in your regular giving.

Using Fundraising Intelligence fundraisers can compare their regular giving results against live benchmarks to understand how their conversion strategies are fairing against other similar organisations and which conversion channels deliver the best response rate. To learn more about reducing acquisition through conversion and reactivations read our previous regular giving blog – Why acquisition isn’t your only strategy for growing your regular giving.

Improving your conversion and retention campaign targeting is key

Knowing that regular giving conversion has the strongest ROI and LTV but retention could be tricky in the coming months, the key to successful conversion and retention campaigns lies in improving your campaign targeting.

The problem today with many fundraising campaigns is that they aren’t as targeted as they should be. 

That’s because charities are still using traditional segmentation processes based on the recency, frequency and value (RFV) of donors that looks at past behaviour only and doesn’t take into account all of the other interactions a donor has had with your organisation that would indicate their engagement and likelihood to give. 

Dataro’s AI-powered donor predictions help fundraisers identify the right donors to include in their campaigns based on where they are at in their own unique donor journey. This approach uses deep machine learning to analyse thousands of donor data points in your CRM to make accurate predictions about how each donor is likely to behave next, taking into account all of the touch points the donor has had with your organisation. Dataro’s donor predictions are then laid out nearly within the charities CRM, providing predictions across a range of fundraising programs and activities to make data selections in your CRM fast and effective.

AI Donor Predictions Are Based On Hundredds of Data Points

Unlike the set and forget segmentation approach, Dataro’s donor propensities are updated weekly in the charity’s CRM, as new machine learning models are added and analyse all of the data and pick up on new changes that are happening live in your donor database. That means your campaigns are based on the most recent data and most recent donation history. 

Want an in-depth explainer of how Dataro’s ML works – read here.

Using AI-powered predictions to stop regular giving churn

Dataro’s Fundraising Intelligence data shows that on average charities lose just under 50% of their new regular giving cohorts in the first year. And the average regular giver makes 16 – 17 gifts before they churn, according to our data pool. So by proactively identifying the at risk donors and engaging them with a thank you call you have a better chance of stopping them from churning. 

Dataro’s RG Churn donor predictions help nonprofits to identify those regular givers most likely to churn – so you can better target your intervention campaigns and improve donor retention. 

So what does moving away from a segmented targeting approach based on historical data to predictive targeting look like?

In the height of COVID, Victor Chang Cardiac Research Institute saved 296 regular givers in 3 months using Dataros churn propensities to call the most at risk donors – generating an estimated $57,311 in continued monthly gifts. 

In 2021 the Fred Hollows Foundation NZ also teamed up with Dataro to improve their regular giving campaign targeting using machine learning. In their thank you intervention calling campaign, Fred Hollows Foundation NZ stopped 211 regular givers from churning, retaining an estimated $104,005 in net income through secured monthly gifts. 

Fundraising expert Andrew Jung also recently shared his top tips for planning better regular giving retention calls – read the blog to maximise the effectiveness of your targeted calls.

Want to improve your retention strategies even further – read our step-by-step guide to retaining more donors here.

Using machine learning to convert more regular givers in tough times

An obvious source of potential new regular givers are a charities existing one-off donors. Conversion to regular giving programs can yield lower acquisition costs and double the LTV compared to newly acquired donors. That’s because these donors are already engaged with your cause and have a desire to increase their impact. 

In 2021 the Wilderness Society teamed up with Dataro to improve their regular giving conversion campaign targeting using machine learning and found AI-driven donor predictions increased response rates in their calling campaigns (compared to their normal data selection methods). 

Over 5 months the Wilderness Society converted 48 new regular givers by calling those most likely to give a monthly gift, securing an estimated $14,172 in net income through monthly gifts.