For years some of my colleagues and I have been banging on about the need to seriously consider actively downgrading regular, monthly donors.

Are you going mad, Jonathon?

Possibly, but not on this one. The rationale is simple. There are certain groups of regular givers that we know, statistically, are likely to stop their ongoing giving. Their characteristics have predetermined that they’ll fall out of love with us really quickly and hence cancel their gift.

I’m talking about “younger” face to face recruited donors. By younger I’m talking under, say, 25 (may vary by client).

We look at data for face to face (F2F ) donors every day. Whenever we run the data through some geeky data modelling, its spits out the same result every time. Younger donors are more likely to stop their giving in the first three months than the “older donors”. There are other criteria that dictate attrition levels, like payment type and housing type, but hands-down every time, age is the most significant variable.

So for me it’s always been simple. If we know statistically that a group is likely to cancel, would we not be better off tackling this head-on rather than sitting back waiting for the inevitable?

Well, I was incredibly excited a couple of weeks ago when a Canadian client shared they have been doing exactly this. And guess what, it’s working.

Of course, by working I mean that the drop off in income from doing nothing and having donors cancel is offset by keeping more monthly supporters at a lower average gift.

Let’s do the math.

Scenario A. I have 1,000 donors giving me $20 a month ($240 a year). The data shows me that I’ll likely lose 300 in the first three months. So my $240k in annual income is, in crass terms, likely to be around $168k if we do nothing.

Scenario B. What if we took the 300 “likely” cancellations and asked them to consider dropping down to $10 a month? Assume that of those 300, two-thirds of them say yes and the other 100 we can’t reach, or decide to cancel anyway. We now have 700 donors at $20 per month and 200 donors at $10 per month. That means my annual income is now $192k, a far better result than sitting on our hands and doing nothing.

There are a few things to consider here:

• Do it on the phone. Make sure the call is intended as a donor-care one, not an administrative one. Thank your donor, check in, share, and acknowledge their contribution. Then discuss their giving level and how comfortable they are.
• Test the timing of this. It’s likely best to do best around month one after sign up, but play around with this. See what works for you.
• Just because someone may agree to lower their financial commitment, don’t forget them. Face-to-face recruited donors need to feel the love, albeit in a slightly different manner. They don’t behave like donors from “traditional” media. Long letters and dry newsletters are a waste of time. Punchy, shareable and relevant content all the way.

 

If you do this, let me know how you get on.

This article was reprinted with permission and originally appeared on Pareto Fundraising.