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We Are For Good Podcast - The Podcast for Nonprofits
705. Working Session: How to Keep More Monthly Donors + Increase Generosity - Dave Raley
00:31:26
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- [00:05]
Dave Raley
Sustainable recurring giving is more accessible to more charities than at any other time in history, full stop. That's just the truth. The question is, are you going to take advantage of it?
- [00:21]
John
Welcome to working sessions on the We Are for Good podcast. In every session, we're tackling one essential topic and give you practical steps to take meaningful action within your mission. Today, we're bringing you the experts and playbooks to help you move forward with clarity and confidence. Let's get to work. Hey, Bea, what's happening?
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Bea
I am so excited. One of our favorite people's in the house today.
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John
Yeah. You have found us friends on a working session that we wanted to bring back. One of the OGs that talked about monthly giving, but in a really evolved way. It's an honor to have Dave Raley back in the house. He's an author, advisor, and founder and CEO of the center for Sustainable Giving, y'. All. He doesn't just talk about this. He has created a legit center where they're doing all sorts of things, pouring into growing this movement, growing the research of it, and getting people taking action together. So he's also the author of the Rise of Sustainable Giving, where he writes a weekly column called the Wave Report. It's an email that you do not want to miss. But he's an advisor, he's a speaker. He has worked with thousands of nonprofit leaders to grow, both personally and organizationally. He, he also, you know, hosts the Sustainable Giving podcast, another casual side hustle, my friend, which is a show that shines a light on what's working specifically in this world. So for a working session about sustainable giving, we had to talk to Dave because he's going to help us zone in, really, on a couple of the most overlooked opportunities in monthly giving, and that is reducing churn and upgrading the donors that we already have. Dave, always a joy to see you. Welcome back to the podcast.
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Dave Raley
Oh, man. So good to be here. So good to. To see you guys. I love seeing your faces. So this is going to be fun.
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Bea
It's good to see you.
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John
It will be fun. I mean, can we just start by talking about churn? Because who doesn't sit around and talking about churn rates?
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Dave Raley
That's a great start.
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John
What a lead in, right? Let's set the table too. If you're listening, you're like, what are they talking about? Let's. Let's define what a churn rate is and why that number is just so dang critical. And what does a healthy versus a red flag look like?
- [02:17]
Dave Raley
Yeah. So churn is an uncommon metric in the nonprofit space. Let's just start there. Like, this is not a number that nonprofits think about, know, talk about. But if you're really paying attention to what's been happening in recurring giving over the last 10 years, it's really been transformed, and in large part candidly, because of the subscription economy. And the subscription economy we've talked about in the past really has led to not only the way people consume changing, but it's actually begun to change the way people think about their generosity and their giving. And so this is actually a lesson I think we can apply from the subscription economy. So if we were trying to run a subscription business right now, we would be looking very intently at our churn rate. Like, how many new people do we bring in and how many do we lose? In the nonprofit space, we use a metric that many more nonprofits will be familiar with called retention, which is, you know, how many donors give year over year. But here's the deal. Retention is pleasure. Churn is pain.
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Bea
Ooh, double click.
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Dave Raley
And when you think about retention, retention is a. Is actually. It's a nice metric. It's the. It's a common metric. But look, think about how human beings are wired when you look at, like, human psychology. Human beings are wired to avoid pain far more than we are wired to pursue pleasure. Now, I kind of wish that wasn't the case in human nature, but the truth is, we avoid pain. And so one of the things I've seen in nonprofits is we talk about retention. We say, oh, you know, I've got 42% retention, or I've got whatever that, you know, number is. All I'm suggesting is we just need to invert that number and use the churn rate. How many. Not how many donors did we keep year over year? How many donors did we lose year over year? So let's just do a quick kind of thought experiment. The average single gift donor across fundraising typically retains about 42% of the time. Yeah, okay, so just painful.
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John
Can we just air that this is crazy, that that's normal?
- [04:17]
Dave Raley
Let's make it more. Let's make it more painful, John, because turn that into churn. 58% of donors do not give again the next year. Yeah, See the difference there? 42. I keep 42% of my donors. That's not great. I lose almost 60% of my donors every year. It just has that much more candidly pain to it now versus. Let's look at monthly donors. The average monthly donor, depending on what you look at is somewhere between 78 and 86% retention. Again, let's talk about churn. That's really 14, 14 to 18 churn. Right. And so what we, what we want to do is we want to look at our churn rates because number one, they're more motivational and they're more action oriented. If you told me okay, I retained 42%, I'm like, well, what do I, what do I do with that? I mean, I guess, is that good, is that bad? I don't know. If I said we're churning 58, we need to bring down our churn. And so the first thing with churn is just use it. Non profit leaders, I think start convers and it will, it will draw you towards action because if you know it, it'll light a fire for your organization. Such a reframe.
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Bea
Yeah, I just think these are succinct and they seem simple reframes, but they can literally change everything because when you're operating in a sort of, I would almost say like when we're on autopilot and we're just looking at those retention rates and we're thinking, oh, that's good enough because you know, we're, we're within the 42% average and it's like, oh, oh no, we don't have to sit with that as being normal. And I just think that monthly giving donors, much like, like plan giving donors, like these are your most rabbity fans. Like these are people who love your organization. They stick around, they show up in many different ways. When you give someone your credit card without an end date on it for giving, like that is a different level of trust that's being exchanged there. And so I want to talk why monthly donors lapse. Talk a little bit about the theories and some of the patterns you're seeing in your work, Dave, and like what sort of elements are entirely preventable that we're missing right now?
- [06:40]
Dave Raley
And this, this, this part is critical because even though recurring donors do retain right, they churn less than, than their single gift counterparts. We still lose, depending on the size of your organization, dozens or hundreds or even thousands of donors on a recurring basis every year and for no good reason. So let me talk about the two reasons why sustainers churn. The first is what we would call involuntary churn. The second is we'll call voluntary churn. So let's start with involuntary churn and by the way, also subscription oriented term. So involuntary churn means that the donor stopped giving but through no intention of their own. And the Number one cause of involuntary churn is credit card payment failure. Yep, yep, credit card payment failure. Because, and I don't know if you've experienced this, I think our listeners can relate. You get that envelope in the mail from your bank and it's like kind of non descript but a little thicker than usual. And I'm like, oh, no, not a replacement credit card.
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Bea
Everything connected to this credit card.
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John
Or you drop all of your cards in the bottom of Lake Tahoe. Like I learned the hard way what's connected to that.
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Dave Raley
So we've all lived through that. But the reality is every time that happens, obviously, and especially the charities we give to suffer. When I was writing the book, I actually had one of those moments that one of my credit cards got replaced. And I thought, okay, this will be an good experiment because this is the one where we give to charities on a recurring basis. I'm going to see how many organizations follow up with me. One organization reached out within six weeks and about six weeks later another one reached out. So two total. And this is, I don't even remember how many organizations we give to, but over a dozen. And this is very preventable. So two things I want people to think about with their involuntary churn, automation and outreach. So those are the words I want you to think about. So number one, automate your involuntary churn. So first of all, log into your organization's donation platform. Most donation platforms, many, I will say, have what are called credit card auto updaters. They have different tools, sometimes they're not turned on, by the way, to actually auto update and try to replace that credit card automatically. It's, it's deeper than the time we have now. But actually some organizations today have such good donation platforms that it will even in the case of fraud and a new credit card, it can actually replace the credit card number and continue to charge it. That experiment, by the way, unwittingly happened again to me last year and there were actually two more charities that automatically were able to update the credit card in its entirety. So you want to basically figure out how to automate that involuntary churn process. And then the second is outreach. So in the case that a payment does fail, like we've all seen before, what is your actual process for outreach? What is the phone call? What is the email series? Sometimes your donation provider will have an email series. Other times it's just like we need a report, report once a week on which cards failed last week. And we're going to make, we're going to do give it to the, you know, the donor services team, or we're going to have, you know, one of the, one of the admins on the team just reach out. Right. Because those are the donors, they didn't intend to lapse. Right. And so upwards of 25 of credit cards will turn over every year. Wow. And that's the vast majority of U. S giving. Now I would love for you to get your donors on EFT and ach and there are some strategies that you can do that, but most donors today, especially if they're Americans, we're comfortable with our credit cards. Right. And so you've got to automate and you have to have an outreach. So that's involuntary churn. The second type of turn is voluntary turn. That's where the donor actually does, for whatever reason, choose to comes to the conclusion that there they need to stop their giving. And there's basically two things we can do there. So when somebody reaches out to us to cancel their giving, we want to acknowledge and we want to affirm them. So we want to acknowledge, you know, it's like when you. The good, good customer service, right? If, if you call in with a complaint or whatever, do they affirm? Like, do they acknowledge even what you said in the first place? Right. And so, hey, I'm sorry to hear that. You need to stop your giving today. Your gift has made such a difference in the life of the people that we work with. Right? So that's acknowledgement when an affirm.
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Bea
And.
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Dave Raley
And then I would just ask, hey, would you consider decreasing your gift amount or even just pausing your gift for six months or for a few months or whatever? Depends on the person, right? Just ask. It doesn't hurt to ask. And in that you can learn, like, well, why are they canceling? Sometimes it is financial hardship, sometimes it's. Sometimes it's just, you know, I've lost connection with the organization and real world example. Real world example. Last week I called a charity who will remain nameless because basically we had come to the end of our gifts. Nothing against the charity, it's just had been years and it was just like, you know, and so I thought, well, I'm gonna just call in and oh, by the way, first thing, tried to go online. You couldn't even find a way to, you know, to. To cancel your gift or pause or whatever. But literally I said, you know, I'd love to, you know, I need, we need to cancel our gift or whatever. And they were like, okay. And then. And it was a very transactional. They were kind, but it was very transactional. They were like, all right, what's your name again? Okay, what's your information? Your address? And then they canceled it. And then. And then they were like, do you need anything else? I was like, you could have just asked why or, like, suggested an alternative. But. But it's just, you know, we're busy, right? And we're not thinking, oh, yeah, what happens when somebody does call in, you know, to cancel? How do we acknowledge and affirm them and offer them some alternatives?
- [12:39]
John
Taking a quick pause from today's episode because we wanted to tell you about some amazing upcoming events that we don't want you to miss. So first up, on April 29th, we've got our monthly working session live. And we are excited to have Dana Snyder back in the house to walk us through forecasting our monthly giving growth in 2026. So you're going to walk away with a growth forecast for the year and all the pathways to get you there. Really excited about that session. Then in May, you can join us for our next Impact up gathering. You know, four times a year, Impact up brings the we are for good community together around ideas that really matter most. This quarter, we are going deep on the most powerful tool that you already have and probably aren't fully using. Story ImpactUp is also met with local meetups happening around the world. So you can find one popping up somewhere near you. Head to weareforgood.com or go to this episode's description for the direct links and you can save your free seat today. Yeah, I mean, you're lifting just like the raw, the real. These are the small moments that really do change and experience. Even though you're ending your donation, you would have left with a completely different feeling about that and you would have felt appreciated. And that is like a. A line in the sand moment. Like, I love that you're lifting this. What a great hack. Let's talk about retention. Is that a good transition? Um, I mean, we're talking about the small moments, but I feel like that's the story of this, of, like, what kind of touch points, what small moments do we need to keep monthly donors engaged? And what should organizations really have in place that maybe those listening don't have in place today?
- [14:21]
Dave Raley
Yep, yep, Absolutely. So when you have somebody that's coming in and they're choosing to make that sacrificial gift, I want you to think of three words. We talked about one of them already, and that is to affirm.
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John
Yeah.
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Dave Raley
And I don't mean just affirm the first gift Although you need to. A lot of organizations just send a receipt, right? And that's not, that's sort of a little bit of an affirmation. Maybe the receipt has a cover letter on it. But I'm saying no, no, no, really affirm. And that may look differently to different organizations. It may be a phone call, maybe a handwritten card, it may be a note, you know, maybe a voicemail. But we want to affirm. But and here's the key with, on with ongoing giving is it needs to be on an ongoing basis. You need to help me see how my gift is making a difference in the life of, of the, of the people that I care about. So we want to affirm, we want to engage. The second thing is we want to engage. So how do we actually invite that donor into the opportunity for engagement? Now, spoiler alert. Not every donor wants to like be a part of your close knit community and there maybe, you know, they may not participate in your events and that's fine by the way, we can invite them. But when I say engage, I mean like ask them, you know, why did you choose to give to us in the first place? You know, I work with a number of faith based organizations. Like hey, is there any way we can pray for you? Right? Like how can you actually offer the opportunity for a two way conversation? One of the organizations I've worked with basically has an individual that's on their team that's essentially the call it rep for their monthly giving program. And so you, everybody knows this person and, and they get emails from this person and they get notes from this person. Now this is all using marketing tools. This person's not sending 6,000 emails a month, right? But that person embodies who the program is. And so then that person actually can, you know, we can send emails on behalf of that person inviting engagement. And so, so what does it look like to engage so affirm. That's the most important thing and an ongoing basis. Because by the way, while we've been talking about pet peeves, one of my pet peeves is the phrase set it and forget it.
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Bea
You are, are you Gen X? I totally remember said it.
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Dave Raley
I hear that when I go and speak, you know, I'll go give a, give a keynote and somebody will be like, yeah, yeah, for monthly giving that's like set it and forget it, right? I'm like, I don't know. Have you paid attention to subscriptions in the last five years? Like we have entire apps now that monitor our subscription that you can subscribe to to Monitor your subscriptions, which includes your monthly giving, by the way. And so they're not forgetting that they, you know, like I didn't forget that I'd been giving to that organization for 12 years. Right. And so we want to affirm them on an ongoing basis. We want to engage them and, and this maybe sound counterintuitive to retention, but we want to appeal, we want to ask them for additional gifts. Your recurring donors are some of the most generous additional gift donors you will possibly have.
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Bea
Hard.
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Dave Raley
When we stop.
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Bea
Yes.
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Dave Raley
When we look at this data for the organizations we work with, where we come in, we do our deep dive roadmap and training and workshops and stuff like this. I see on average, the average recurring donor, whatever they give annually, they will typically on average give 25% in addition to whatever it is they're annually giving. So if they're giving 400 a year as an annual donor or as a recurring donor, they will on average give another 100 bucks at year end or in response to some disaster or some moment. Because think about it like, these are the people who've raised their hand that say, I care about the cause. I care about the cause so much that I want you to have the steady support and recognition that, that this is an ongoing need. Right. And so those are the same people that would actually respond to that additional appeal. And so we actually don't. One of the mistakes I see organizations make is, oh, somebody's getting now giving monthly. Cut them out of all communications because we, you know, we don't want to like, ask them too much or whatever.
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Bea
And it's like them. Yes.
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Dave Raley
Yeah. We don't annoy them. It's like, those are the most loyal people you have. Those are the people that need the updates, you know?
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John
Yeah.
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Dave Raley
Now if you send 30 appeals a year. Yes. Let's reduce the number of appeals to recurring donors. But most people listening today are not doing that. Right. You're actually under communicating to your most valuable donors.
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Bea
I, I just think there's so many good takeaways here. And if you are of the mindset that monthly giving should be set it and forget it, I would say you are leaving 98% of what they can do for you on the table. You already have the 2%. It's recurring, it's going. But the ability to co build alongside with them a more vibrant community, storytelling engines, amplification of network. Like I just think about, we have a word and we are for good in our impact framework that we call stoking. It's like you cannot just put something out in the world and let it just germinate. You have to stoke, you have to go back. You have to remind people why they signed up for this, why there is value. I don't remember signing up for Netflix or Spotify. I know it goes in the background of my memberships and my subscribing, but I definitely want those impact reports for those monthly donation for. I'm in a couple of monthly donor clubs, and I want those recurring reports. I want to see what's going on and what a way to deepen the relationship. To get to this next question, which you sort of already teased already, which is upgrades, and I want to talk about how we upgrade on monthly donors. Who do you target? When do you ask? What does a good upgrade sequence look like? What are flags? Where it's like, don't go back there right now. I feel like, you know, all the tips. Give us the goods, my friend.
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Dave Raley
Yeah, that's. That. That is a perfect segue. Because one of the. I wouldn't call it advanced, but more intermediate strategies with regards to recurring giving that most charities are not even thinking about is what would it look like to increase the monthly giving amount that we're seeing from these charities? Most recurring giving programs, and I think this is a good thing, by the way, are whatever the donor chooses to give. You know, it could be 25 bucks, it could be 2, $500. We see that regularly, by the way, organizations having donors that are at larger amounts choosing to give significant monthly gifts. We had a. We had a client just this last year who we ran a campaign. They had a donor sign up for $5,000 a monthly to the email campaign, right? And it's just because for whatever reason, that that's where that donor was comfortable. But here's the deal. Don't just assume that the whatever amount that they initially give on a recurring basis is the amount they'll only ever give on a recurring basis. And so the first trick to upgrading your monthly donors is to actually ask them to consider increasing, which I don't even. I don't even want to quote a percentage. But it is very seldom that charities even out to their existing recurring donors. And here's the deal. How do you ask? Is the next question. And so you want to do it in a timely and specific way. So you don't want to just say, hey, you've been, you know, you. You give 50 bucks a month. Would you give more, please, today? So you want to basically, when you reach out to your existing donors, and you should, in my opinion, a couple of times a year and invite them into increased ongoing impact. But then you need to say, why is this? Just because it's that time of year and you want to ask for more money? No, it's because of some specific and timely reason. So I'll give you a couple examples. We had one charity we worked with, a social services charity that works with the homeless. They had just expanded their women and children's capacity. Incredible opportunity. They were overwhelmed with demand. They had actually tripled the number of women and children that they were able to work with in their program. And they had tripled it in the prior year. And when, when they brought us in, we were asking questions like, you know, what are some specific things that we might think about in terms of communicating the increased need? And they were like, well, we did finish this, you know, this expansion, and we're now serving triple the number of women and children. I'm like, that sounds like a timely and specific reason to go to donors, right? So, so think about this. These are your most faithful donors. They may or may not even know you've tripled your capacity is the first thing. Number two, like, that is a very timely reason to go back to them and say, did you know that since you've started giving, we have more than tripled the number of women and children that we're working with in our program? Blah, blah, blah, blah. Would you consider increasing your gift amount? Another example would be crisis, right? If there's some sort of disaster or crisis response, that's another moment where you can say, would you consider increasing your gift amount or a new or expanded program? So there's different reasons, but it just needs to make sense to the donor, and many of them won't respond, and that's fine. But a couple of times a year, I would make sure you're asking. And then the other thing I would say is, you know, if you can, if you are asking people to give on a monthly basis, just try to incorporate that. Ask that upgrade, Ask to your existing donors within your existing efforts. Like, ideally, this shouldn't be an additional. Now we got to do another campaign to our recurring donors. The truth is, most organizations aren't doing campaigns that are recurring donors. So you may have to do another campaign. But in the organizations we work with, we're regularly doing three, four times a year, we're doing campaigns to invite people into recurring giving. And all we can, all we do in those campaigns, and we just create a variation to existing recurring donors and say, hey, you are a faithful smart so and so, you know, would you consider increasing your, your impact?
- [24:31]
John
Yeah. And all of this stacks because if you, you aren't doing what you just had said about staying informed and keeping updates, the conversation is awkward to show up. But if they've been engaged and you've been actively sharing impact, like this feels like a natural progression.
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Bea
Yeah.
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John
And the fact that you ask is an invitation, which is, which is beautiful too. So I mean, you know, these are working sessions. We keep them tight. We try to get activated together. What's bubbling up for you, Dave of like someone listen. Wants to move the needle for their monthly giving program today. Like what's something that people could get started with today?
- [25:05]
Dave Raley
I love this. I love acting. It's just like I was speaking with a well known leader in this space that's done just incredible things with recurring giving and he was going through this really complex like strategy thing and I was like, dude, end of the day, what should nonprofit leaders do? He was like, just get started. Yeah, so like just totally just go. So three specific just get started things. Number one benchmark. Like how many do you know? How many recurring donors do you have today and how much they're giving on a monthly basis? So how many, how much? Second thing I mentioned at the beginning of our conversation, look at your failed credit card outreach. Like do you have one? Log into your donation platform and look for what happens when payments fail. Like sometimes there's a toggle, sometimes you can go from two reminders to three reminders. If you have a donor services team, you can say but bottom line is what happens when a credit card fails? Like who, who knows about it and what do they do? And then if helpful, if helpful. The third thing is we and you, I think John and Becky, you might have seen this, but we've put together this blueprint for growing sustainable giving and it's, it's a little more than one thing. It's actually seven things. So we've next steps to growing your sustainable giving program.
- [26:30]
John
Love it.
- [26:31]
Dave Raley
So if folks are interested, they're more than welcome to, to grab that, grab a copy of that. It's free. It's like a 20 page PDF. It's built off of some of the principles in my book, but we've put that together for folks who are interested.
- [26:45]
John
Well, heck yes, we want that.
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Bea
We love a good freebie. We will drop that into the show notes because we want everybody to get as much help as they can. And I want to add one more if I can ju in here. Something else you can do. I can't say this as a marketer. I, I can't not say this enough as a marketer, but give your monthly giving friends a symbol or a name to rally around. I, I really believe this is kind of a differentiator when I think about, like the spring over at Charity Water is the one that a lot of people know, but even Alex's Lemonade stand, you know, for cancer, has a one cup at a time. And Breakfast Club is one, and the Breakfast and Butter Club. There' many cool names. But the reality is it makes people feel like they are in the inner, inner circle. They're getting things, they're. They want to wear them, they want to talk to their friends about them, they want to invite them into something. So I also think that that is a great hack too. But we're wrapping up, we're coming to the end, we're landing the one good thing, my friend. Dave, you've been on the podcast several times in the past, so curious. What's a one good thing you would leave with this audience that's specific to this topic that you would pass around?
- [28:00]
Dave Raley
Yeah. I would say that the truth is that sustainable recurring giving is more accessible to more charities than at any other time in history, full stop. That's just the truth. The question is, are you going to take advantage of it?
- [28:21]
Bea
Please do.
- [28:22]
John
I mean, what a way to end the show. And I'm thinking from the donor side, it's the accessible path. You know, a lot of us want to be major gift donors, but if that's not your reality, you can be a consistent donor to the causes that you care about in a amount that fits into your monthly budget. Like, this is an accessible way to get involved. So, heck yes. Let's open up the doors. Let's open up the floodgates. So inspired every time we get to talk to you, Dave. I mean, you're running the center for Sustainable Giving over there. You got a lot going on. Always, like, what's the best way for listeners to connect with you and frolic in the land of sustainable giving with you?
- [29:01]
Dave Raley
Easiest place to get anything sustainable giving is just go to sustainablegiving.org that blueprint, by the way, is just going to be@sustainablegiving.org blueprint. So that's super easy. And we can include that in the show notes. And then if you're looking for me individually, just seek me out on LinkedIn. It's like my happy place. I love, I love the fact that we have a, like, social media that we can actually connect with. You can find me on Instagram too. But you're going to see mostly pictures of my daughters and like, you know, that's also joyful happy times, which is fun too.
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Bea
Totally. And we want you to get more information about this. You know, May is like monthly giving month. Like it. We are going to be focusing on this. We've had a lot of conversations on the podcast with Mary Whitehall, with Mary's List, with the Tim Tebow foundation, with Vic Harrison over at Charity Water. There are a lot of people doing a lot of interesting things that are moving the needle in massive ways. And the thing is, friends, you glow, you grow monthly giving, you're going to grow your movement that those two things will correlate together. So thank you, Dave Rayleigh, for being one of the wisest people that come in and talk about this topic with us. Please go check out Dave's links, connect with him. He's got all the goods over there.
- [30:16]
John
Good to see you friend.
- [30:18]
Bea
Thank you, my friend.
- [30:18]
Dave Raley
Good to see you guys.
- [30:19]
Bea
Yep, take care.
- [30:21]
John
Hey friend, thank you so much for joining us today. If you find yourself looking for a place to stay connected and keep learning between episodes, I hope you'll come and join us inside the We Are for Good community. Yeah, it is free. It's full of incredible non profit leaders like yourself and it's now an app in the Apple App Store and Google Play Store. So you can take this community with you wherever you go. Head over over to WeAreForGoodCommunity.com to find us. We cannot wait to see you inside.