After reviewing the donor files of 18 Australian charities, Carol Rhine reveals some strategic opportunities presented by their donor behaviour.

After reviewing the donor files of 18 Australian charities, Carol Rhine reveals some strategic opportunities presented by their donor behaviour.

Stepping back to examine what your donors are actually doing can provide a revealing look at a fundraising program’s strengths and weaknesses. As part of Blackbaud’s donorCentrics benchmarking program, analysis of donor transaction information from 18 Australian charities was recently completed and a number of trends were unearthed.

How are Australian donor bases being built?

Just over half of the 18 organisations’ new donors we examined were acquired as single-gift cash donors, while the rest were acquired as regular donors. New single-gift givers donated $124 on average in the first year, while the regular donors gave a total of $172. Those measures alone, however, do not tell the whole story.

Seven of the organisations brought in primarily one-off donors, seven acquired nearly all regular donors, and the other four nonprofits brought in a mix of each. For all donors acquired in 2006, the median long-term, or five-year, value of a single-gift donor is $503 while that of a donor acquired as a regular donor is $714.

The difference in those values has everything to do with the first year retention of one-off donors. Regular donors have a fairly steady rate of attrition after the first month or two of giving, generally 1%-2% per month.

After their first renewal, the rate of single-gift donor attrition is much less than that of regular donors. It is that first renewal gift (for single-gift donors) that is critical in determining donor value.

In Figure A, single-gift refers to programs with more than 70% of new donors acquired as one-off donors, regular refers to programs with more than 70% of new donors acquired as regular donors, and mixed refers to programs where acquisition is a mix of both one-off and regular donors.

Figure A

Is diversity the answer?

Organisations which acquire more than 40% single-gift donors do a better job at retaining those donors and their value (Figure B). In fact, it is the organisations with diversified acquisition programs that achieve the highest donor value and have the highest first-year retention of single-gift donors. Where a type of donor is dominant, nonprofits tend to build up expertise in managing and maximising the value of that type.

Figure B

New regular donors (Figure C) behave differently. Long-term value is highest for programs with many regular donors, but first-year retention is highest where there are few. It’s likely that donors who became regular givers within programs where that is a rarity had to work at it and so are more committed donors.

Figure C

Regular Donors Acquired in 2006 by Acquisition Program Type
Long-term ValueFirst-year Retention

Differences in acquisition channels

Direct mail is the primary acquisition channel for single-gift donors, while most new regular donors are acquired through face-to-face solicitation. Acquisition channel can affect both the demographic make-up of the acquisition pool and donor value.

There is a trend to acquire regular donors through channels other than face-to-face. Some organisations are using direct mail to acquire single-gift donors before converting them to regular giving by telephone or mail. Other nonprofits are using the internet and Direct Response Television (DRTV) to acquire regular donors.

There are several pressures on organisations that lead them to diversify their donor sources. Face-to-face solicitation is expensive and does not often reach potential donors outside of major cities. Face-to-face also tends to bring in younger donors which are harder to retain, making the cost per retained donor very high. Additionally, it is often difficult to schedule canvassers, as the suppliers of face-to-face services are at capacity. That is true not only in Australia but around the world.

The fundraising programs with the most diverse sources of giving have the highest long-term value for both regular and single-gift donors. In this era of multi-channel marketing, nonprofits can best maximise the value of the asset that is their donor file by making sure that every channel is available to donors. If a donor hears an announcement or reads an article about your organisation they should be able to find out more at your website, on the telephone, through the mail, and through social media. The choice of communication is in the hands of the donor – make certain they can reach you with their support.

Organisations analysed

The Blackbaud benchmarking project includes data from: ActionAid, Cancer Council NSW, CARE, Christian Blind Mission, ChildFund, The Fred Hollows Foundation, Greenpeace, Heart Foundation, International Fund for Animal Welfare, Make-A-Wish, Mission Australia, Médecins Sans Frontières, Plan Australia, Save the Children, UNHCR, UNICEF, The Wilderness Society and World Wildlife Fund.