Maximizing Lifetime Value Part 1

This is the first post in a 2-part series I’m writing about maximizing lifetime donor value.

Sustainers are where the money is.

What are sustainers?  You probably already know, but it bears some discussion of terminology since there are many gifts that fall under the broad designation of “recurring giving.”

• Sustainers are donors who make a regular recurring payment to your organization.  Their gift has no end date, and it could be monthly, quarterly, or annual.  It’s an open-ended commitment to support the mission of the organization or a specific program until such time as the donor chooses to terminate the gift.
• Pledges are donations made to an organization for a specific period of time (until the election) or for a specific project (help us accomplish this goal during the next two years).  When you know the end date and the total amount committed, it’s a pledge, rather than a sustaining gift.
• A specific type of pledge is an installment gift – the constituent makes a pledge to give a specified total amount, but chooses to pay in a series of installments.  This is most common with major giving as opposed to direct response – for example, capital campaigns or very large gifts.

Different organizations may call these gifts by different names, and that’s okay.  The point is, you
should track them differently.  There might be a darn good reason you
are asking for a pledge vs. an open-ended gift.

Why should you care?

Here’s why:  sustainer giving yields very high return on investment and sustaining donors typically stay active two to three times longer than occasional donors.

Tom over at The Agitator discusses how donor retention is in “free-fall” – combined with soft acquisitions, donors are becoming less loyal all the time.  Amergent recently put out a paper detailing how getting the second gift more quickly raises lifetime value and loyalty.  The point here is, if the second gift – or even the first – is a sustaining gift, then both lifetime value and loyalty increase.

A couple of other sustainer nuggets:

• Many organizations have seen good results from combining sustainer asks with premium offers
• The sweet spot for asking sustainers to upgrade their gift seems to fall into the 9-12 month window
• Offering sustainers the ability to be excluded from all but the most urgent fundraising asks can be attractive

Next month we’ll talk more about stewardship – a key piece of maximizing lifetime value.  People support your organization because they support the mission, so connecting their support to your work is key.

And speaking of sustainers, mark your calendar now for the Convio Summit – October 3-5 in Baltimore – because David Glass from World Wildlife Fund is going to be presenting a session again this year on sustainers.  David’s work in this area is groundbreaking, and if you attended his session from 2010, you know what a treat you’re in for.

See you there!