After years of banging on about regular giving, I think it is fair to say that many charities now get it – regular giving is the thing to do.

After years of banging on about regular giving, I think it is fair to say that many charities now get it – regular giving is the thing to do.

In collaboration with 33 charities in our benchmarking cooperative, we analysed the donations of 127,583 people recruited in 2005 and found that after four years, the average mail appeal ‘cash’ donor, or direct mail (labelled DM cash in the chart), has given $163. A regular giver recruited through mail at the same time (DM RG in the chart) gave $597 and a regular giver recruited through face-to-face (F2F RG in the chart) had given $569. The chart below compares these three types of donors, and extrapolates over ten years – but does not include bequest potential.

Implied life time value, based on donors recruited in 2005 across 33 charities

Huge growth in regular giving

Yes, the big growth is in regular giving. So is the consistent, safe money. And non F2F RG often contributes new donors to the appeal pool.

According to our analysis it would appear that more money is raised from regular giving than cash appeals. Whilst this data is across a specific pool of charities, a quick look at the annual reports of top fundraisers World Vision (who raise about the same as the 33 charities added together), Oxfam and Compassion backs this up.

Total annual income across 33 charities in Pareto Benchmarking

Are you missing out on a pool of donors?

Many smaller charities have yet to take on regular giving, but applying the Pareto principle (less than 20% of charities raise over 80% of money) we can safely say the Australian fundraising sector- and Australian public – have embraced automatic debits as a great way to donate.

But, it still only accounts for half of donors. A few years ago the British fundraising press was full of stories about the reliance on regular giving (especially recruiting by face to face), leaving UK charities without a bequest pool. It also cited research that a greater proportion of donors wanted to give sporadically rather than through regular giving. This meant that regular giving focused programs were missing out on a huge donor pool. And I mean huge. Whilst all the spotlights have been on regular giving, the fact is that regular giving and cash together just manage to raise slightly more than bequests from our 33 benchmarked charities’ $1.5 billion income over the last ten years.

Income by type of benchmarked charities, 2000-2009

The bottom line?

The final piece in this puzzle is all in this bit of data from my genius colleague, Andy Tidy. He looked at all non-F2F recruited donors who had made a transaction (that is, donated in some way) in 2009, and had supplied their date of birth. With 83,326 people fitting this criteria he then looked at how likely they were to be a regular giver (42,374) and how likely they were to be a confirmed bequestor (2,716).

The bottom line is that older people are more likely to be confirmed bequestors and less likely to be regular givers.

How likely someone is to be a bequestor or a regular giver, based on age

So older people are slightly less likely to choose to be regular givers than younger people (which depends on lots of other factors as well, but it is a trend). Of course older people are, ahem, more likely to die and therefore good bequest prospects.

Ignore cash at your own peril!

Regular giving is brilliant – the best thing to happen to charities in the past decade by a long shot. But charities ignore cash at their own peril. Nonprofits which include cash donations as part of their fundraising strategy will build up a great pool of older donors. Provided nonprofits have a good bequest program, this will likely go on to raise much more through the tiny proportion that leave bequests than all their collective cash donations. And it is generally cheaper to recruit cash donors.

Have a balanced portfolio

All this conflicting information! What are we to do? We have spent so much energy and time trying to persuade boards and bosses to invest in regular giving, why should we go backwards

The answer, of course, is a balanced portfolio. Don’t panic, no big rush. It’s just about making sure your regular giving program is up and running and that you are acquiring more new regular givers than you are losing.

But if you have got that going, then dust off the old rules of direct marketing and start thinking how you are going to recruit some of those older donors not willing to give you an automatic debit.