Regular giving strategies to ride out the economic storm
In financially tricky times donors often make the difficult - if understandable - decision to cut back on charitable giving. Even if many of them see this as a temporary measure it can deliver a big hit to a charity’s bottom line. For many charities now is therefore a good time to step back and consider how to boost their strategies for regular giving.
Regular giving statistics are surprisingly difficult to find for the UK, but there’s certainly evidence of a trend showing charity supporters tightening their belts in this area. Regular donations accounted for almost two-thirds (64%) of total charity income in the decade to 2020 but, according to the Wood For Trees State of the Sector Report, it now represents an average 54% of revenue.
In addition to this finding, a study by CAF published in summer 2022 calculated an economic downturn’s effect on donation value. The research claimed a £20 recurring gift that began in 2017 will only be worth £14.90 by 2024, unless the donor actively increases their gift. As we’ve seen, the odds against that happening will lengthen as our economic situation gets worse.
So, with regular giving seemingly under constant stress, how can charities bolster their strategies to ride out the storm?
TRIED AND TRUSTED METHODS ARE STILL A GOOD OPTION.
While it may be tempting to rip up the fundraising rule book in favour of finding fruitful alternatives to traditional regular giving, falling back on traditional methods could still be the best option.Strategy and tactics
This means carefully examining current strategy and tactics; having a laser-like focus on understanding donors and potential supporters; and devising campaigns that cut through the fundraising clamour to engage people, and ultimately persuade them to become a regular donor.
Regular giving strategy begins with knowing the purpose of the ask. What is the charity’s reason for being and how will it prompt donors to keep giving? Align ideas to important aspects of fundraising goals, the team driving activity and the overall strategy will save time and resource that might otherwise be wasted on pointless pursuits.
Charities should then turn the focus on donors. Consult donor data, monitor social media for sentiment and speak to supporters for their thoughts on what makes them give. People are always keen to share their opinions if they feel engaged.
Then consider what works best. It’s easy to view innovation as shiny new ideas that haven’t been tried before. However, re-skinning existing products or initiatives can be just as exciting. A new name, new creative or new appeal based on an idea that worked in the past can do just as good a job as an untested approach.
Getting the message right is crucial. Compelling story telling is the biggest difference charities can make in a cluttered market. They must ensure authentic and relevant cases are put to supporters to demonstrate the need, probably dialled up a notch or two during recessionary times when the charity might be in greater demand as well.
It’s vital to test different messaging, images and assets, along with frequency and type/level of ask. This is a useful way to understand what donors want.
Whatever the chosen strategy, remember that it’s better to do something imperfectly than nothing perfectly. Experimenting with regular giving initiatives and feeding learnings back into a fundraising strategy is key.
SEEK REGULAR SUPPORT BY GIVING SOMETHING BACK. As an example that wraps in all of the features of a successful regular giving strategy mentioned above, memberships and subscriptions are becoming more popular for charities and donors alike.
Loyalty and commitment
Memberships are one way to drive loyalty and commitment. This can be a club offering discounts, free events or exclusive content. It is also a good way to bring a charity and its supporters closer together.
Moving membership one step further, digital subscriptions are taking off. They are a reflection of a shift to online donations and a good way to encourage regular giving, by offering the subscriber something of value in return.
Subscriptions are particularly popular in the health and wellbeing sector. Charities offer their members regular, tailored content based on their users’ interests - often their own or a loved one’s condition - that is gated behind the subscription, which is then exclusive to subscribers.
Having a subscription service also allows the charity to build a more dependable channel of recurring income; create relationships and supporter loyalty; establish a community and exponentially grow its supporter base without additional resource.
Three initial considerations before embarking on a subscription or membership strategy are content, resource and technology. Creating a meaningful subscription proposition and its ongoing content requires a strong understanding of target supporters and what will engage them. Offering exclusive advice and information on “training for a marathon” may not be so relevant if potential donors are aged over 70, for example.
People power also counts. What additional human resource is involved to get the initiative up and running, and keep on delivering the exclusive benefits of the subscription that is on offer to supporters?
Mechanics and technology
Finally, mapping out the mechanics and the technology required is vital. How are new registrations going to be taken, how will the recurring fees be processed and keep the data secure? Determining whether to use a third party to implement the area or handle it in-house, and whether the member/subscriber area will be hosted on a main website or must sit in a new microsite are additional considerations.
There are a number of tools to help create a membership/subscription site. But charities must remember to seriously consider which tools will be right, and the tech knowledge and resource available internally, to ultimately ensure the highest quality user experience for supporter members or subscribers.
DON’T OVERLOOK THE POWER OF DIGITAL. Supporters are moving on from Direct Debit being the only digital payment option. Research has revealed a change in behaviour, with a growing number of donors giving through other methods such as digital wallets.
If one looks at payment methods used for regular donations across all charities, while Direct Debit is still the most common, other payments such as PayPal, Apple Pay and Google Pay have been significantly growing year on year.
Growth of digital wallets
Digital wallets now account for a fifth of monthly online donation payments, and nearly half (43%) of all one-off donations made online. In 2021, the number of one-off ApplePay donations increased by 60% compared to 2020. GooglePay, although a smaller share of the transactions, also jumped by 45% in the same period.
Direct Debit’s share reduced from 65% in 2020 to 58% in 2021. The shifts towards other forms of digital payment mirrors wider transactional trends. If you think about how we pay for many subscriptions, such as Netflix, Spotify or a monthly wine delivery, we mainly use cards or digital wallets.
Meanwhile, industry data suggests that one in every ten online donors makes recurring monthly donations. Revenue growth of almost 18% year-on-year is coming from sustained donors, and just under 16% for one-time online charitable giving, according to wider fundraising statistics - which suggests regular giving remains a viable part of digital strategies.
According to the 2021 Charity Digital Skills report, half of charities now see digital fundraising as a priority, which is a massive increase on previous years, showing the shift within the sector. Despite this, only two in five charity leaders (41%) are increasingly adopting online fundraising and just a quarter (24%) report having the knowledge to make online fundraising truly effective, according to CAF.
Power of platforms
While fundraising via social media warrants an article in itself, it’s worth noting here the power of these platforms within donor strategies. For example, charities report their highest social media following is on Facebook, with 736 users per 1,000 email subscribers; while the average volume of Instagram followers for leading charities is rising by 25% annually. As another way to engage potential regular donors these channels can’t be ignored.
IT’S TIME TO BRING REGULAR GIVING BACK INTO FASHION. While these are worrying times for charities which rely on recurring donations for the lion’s share of their income, the Wood For Trees research mentioned earlier did in fact suggest regular giving income in the UK has been stable for the past two years - even if the trend is pointing towards longer term decline.
In some ways, the wide range of donation options on offer that are allowing individuals to pledge their support to charities of their choice - from cash boxes to cashless giving, and one-off asks to legacy funds - may have reduced donors’ intent to make regular payments to their top one or two causes.
However, this doesn’t feel as if it’s the end for regular giving and the huge value it delivers for charities. If charities can lean on traditional techniques and combine them with a foray into technology driven fundraising innovation and online giving, there is no reason why this decline can’t be arrested or even reversed.
