Key Performance Metrics for Public Media FY21
How are public media stations performing against key metrics, and how is your station stacking up? In this one-hour benchmarking session we’ll use Allegiance Group’s Strategic Growth Analysis as a foundation to gain an understanding of what’s happening in public media fundraising. We’ll discuss the difference between information vs. insight and how you can develop a customized plan for your station.
Debbie: Hey, good afternoon, everyone, and welcome to today’s webinar, Key Performance Metrics for Public Media for FY21. Brett Jones and I, Debbie Merlino, are your hosts for this afternoon’s webinar. The session will be about an hour, and we’ll make sure that we do end on time. So, as we go through the session, please use the chat box that you should be able to see on your screen to add any questions as we go.
To review today’s agenda, we’re going to start by having a quick review about something that I think often gets overlooked, which is the difference between information and insight. From there, we’ll jump into the real meat of today’s presentation, which are the key performance metrics for public media.
This is an aggregate of the data from the public media stations that we work with at Allegiance, and it will provide benchmarking, and the opportunity for you to compare how your own station is doing compared to those key performance benchmarks. And then we’ll wrap up the session about how you can use that data in the key performance benchmarks and incorporate those findings into your own fundraising plans as you start thinking about the next fiscal year. The first thing I want to talk about real quickly is information versus insight. So, even to back up the train, even before information, let’s just quickly talk about data.
So, data is the raw and unprocessed facts. Something like the average gift is $92, net revenue from the campaign was $130,000. We’re all really familiar with sharing facts or data. The next progression is information. And this is data that has been processed or aggregated in some way. So, think about campaign results reports that you might see, whether it be for direct mail or digital campaigns, the sort of smashing together or all of those different facts together in a results report is information. But what I think often doesn’t get dug into enough is insight. And that’s where the rubber really hits the road. So, insight is once you have that information, what’s the takeaway? What’s the potential action item? What’s causing that information to be true? And what can you do next?
So, as we go through these key performance metrics today, we’re going to really want to focus, not just on the facts, the information, but also insight in what you can do and how you can look at information in your own program, and then turn that information into action or into insight.
I think there’s so much effort around campaign results reports and just campaign in general. You’re selecting a theme and a package, you’re determining the timing and the number of hits, the audience segmentation, the offer, that it’s really easy to get hyper-focused around a campaign and to look at just campaign by campaign results.
But if you only look at campaign level data and you don’t pick your heads up out of the weeds, then you get lost. You get stuck in those weeds. Instead, what we planned to do today, and what we think is important for you to remember is that it’s only when you look at the key performance metrics that you can really see the whole picture. Like this aerial view of this corn maze, right?
When you’re in the corn maze, you can’t really see that it creates this picture. You really need to have that 72,000-foot view. And that’s what we want to bring you today. So, again, campaign results are great for reading individual test results within a certain campaign, determining if campaign goals were achieved, identifying opportunities for incremental improvement in the next campaign.
But database metrics or key performance metrics like we’re going to be talking about today, really help you understand the health of the donor file, irrespective of channel or technique. Sometimes we talk about the lifecycle of donors and then this information is also super important because it really creates the foundation for determining a strategy and then you can then apply different tactics to that strategy.
Brett: Thanks Debbie. Now we’re going to start digging in and really looking at the metrics that we found in our FY21 analysis.
To start, this shows the revenue trends for the year or so before COVID and after through the end of FY21. This trend report would look very different for other verticals, food banks, for instance, or museums, lots more peaks and valleys.
We’re really encouraged that we’re seeing a positive, steady trend. Sometimes those jumps are great because it gives you a big rush to see those big jumps. But at the same time, it also makes it harder to sustain those revenue levels with those jumps. So, again, very positive revenue trends, but we know just working with stations and just being in the world today, that there are certain things that have changed.
So, even though revenue is steady, there are certain things that have happened in public media. And there are some things that we need to consider in terms of messaging. So, for our public television stations, for instance, a lot of stations have seen jumps in Passport activation.
So, the question is how do you retain those new members? Like when the world goes back to whatever the new normal is, how do you retain those streamers and adjust the message to remind people how important public television was in providing educational resources for children when they had to do school from home.
If you’re a news station, continuing to emphasize how important local news is, not just during a pandemic, but really every day. If you’re a music or news station, how do you shift your on-air pitching with people commuting at different hours?
A lot of people are now working from home permanently. Some people are going back to work, some people are in between, and you need to be on air when people are listening. And then ask yourself, how are you cultivating these relationships, and with the sustainer trends, something that you’ll hear us talk about a couple of times today is posing the question of what are you doing to message your lapsed sustainers.
So as sustainer programs have gotten bigger and bigger, and they do have significant retention, but we’re starting to see that a lot of programs have a notable amount of lapsed sustainers on their file. So, how do you recapture those people?
Debbie: Great. Thanks, Brett. So, one of the first things we want to look at this afternoon is total revenue trends for donors giving less than $1,200 a year. Before we dig into the details, I want to talk a little bit about how the data is presented. So, if you look at the bottom of the slide, you can see that it shows the revenue trend starting from FY17 and through FY21.
Because FY17 is the starting point, a lot of the data we’re going to be presenting today is in the form of an index. So, with the data starting in FY17, you’ll see that’s a hundred percent and then each successive year is in comparison to that starting point of FY17. So, for example, you can see here revenue for regular donors, those giving less than $1,200 a year, cumulatively in FY21 revenue from these donors was up 30% compared to FY17.
So it’s index at 130 compared to that FY17 number. Something for you to consider, as you think about your own program, is have you seen those same types of increases in your own program? Especially if you look at FY20 and FY21, where that growth tends to be a little steeper. And if you’re not seeing the same big gains at your station, why not?
Did you pull back on fundraising early in the pandemic? And if so, how can you turn that around? Is there an opportunity to go back and perhaps do some specialized messaging in either mail or digital campaign to lapsed donors? If you’re not seeing this upswing in revenue, it could be a function of a number of things.
It could be fewer active donors, smaller average gifts, or fewer gifts per donor. And we’re going to share the benchmarking for all three of those indices this afternoon as we go through this presentation.
So, the next KPI we want to talk about is the active donor index. So, the number of active donors, those who have given in the last 12 months, active donor counts are up 20% since FY17. So, previously we saw how revenue in FY20 was up 19%. And then in 21, it was up 30% from that baseline of FY17. This chart shows that a lot of that revenue growth was driven by the growth in the number of donors.
So, one of the things we often talk about is how dollars follow donors. And you see that here. The number of donors is increasing at a similar rate compared to the revenue that we saw in the previous slide. Now there’s three ways that you can grow your donor counts. And as you are building your budgets for the upcoming fiscal year, think about the following things.
What are your strategies for acquiring new donors? What’s your strategy for recapturing lapsed donors? And then, what’s your donor retention strategy? One of the things that I often think that stations can’t always put their finger on so easily is if their active donor count is growing or shrinking. That’s not how many records you have in the CRM, but it’s how many donors have made a gift in the last 12 months in the most recent fiscal year compared to the prior fiscal year. So, if your active donor file is shrinking, think about as you’re building your budget for the next fiscal year, are you budgeting enough for new donor acquisition, whether that be mail or digital? Are you taking advantage of all of the digital acquisition strategies, whether it be lead gen or advertising?
What’s happening in your lapsed recapture program and renewal programs. So, when you’re building your budgets, you should be thinking about what’s your target for the number of new donors for the next year, and how are you going to get there? Simply copying pasting the prior year’s acquisition strategy into next year’s budget could perhaps not get you where you need to be. It really needs to be understanding what’s that gap in the number of active donors, and then developing a strategy to get you there.
So, here we’re looking at again, those quote unquote, regular donors. So, those with cumulative giving less than $1,200, and this is really a mashup of the last two charts. So, we have both revenue and the number of active donors shown here together. And I think this is really a great illustration of the point that I was just trying to make, where dollars follow donors.
You can see here that they swing up together at the same rate in the same time period. So, if your active donor file isn’t growing, you’re not going to be on a path for long-term revenue growth. Like some stations you may say, you know what, that’s fine. Maybe our donor counts are flat, but our overall revenue is increasing.
Some stations do experience that for a year or maybe two, but at some point, you’re not going to be able to squeeze more juice out of the donors that you have. So, if your active donor file isn’t growing, your revenue is either not going to be growing next year, or very soon you will see a lack of revenue growth.
Brett: Yes. And, if it’s a sustainer or a single donor, they tap out, they fall off the file. They might move out of your area. They might have financial issues and stop donating. They might pass away. Maybe you lose some because they update their bank information, and they don’t share that with you.
It’s great that you have a loyal following of people that are there for you in an emergency, when, files are shrinking. We saw this a lot during the great recession where everybody’s files shrank. But for the most part, organizations were getting more out of that donor base.
And what they were left with was really like their core loyal supporters, which is terrific, but you can’t really sustain your program in that mode. So, when circumstances allow, it’s really important to keep feeding new donors, both single donors and sustainers.
Debbie: And I think we have a representation of that on the very next slide that shows the single gift versus the sustainers.
Brett: Yes. It’s very exciting to see the sustainers growing. Their retention rates are terrific. It’s a really convenient way for organizations to collect revenue and for the members to pay.
But it is really important to grow both sides of that. It’s encouraging to see the single-gift donors are remaining pretty level. It’s very difficult to do that. It’s very difficult to grow both sides. But it is really important. So, during times like pandemic, you just really have to stay the course and remember what the larger goals of the program are.
It can be tempting to make quick immediate decisions, to go for the immediate revenue. But in the big picture the damage that you can do to your program lasts for years. Staying the course will make sure that you avoid any issues like that.
Debbie: And I think what you’ll hear Brett, and I say multiple times this afternoon, is that what you really need is what I call an And strategy.
You need to be paying attention to both your sustainer program, as well as the single-gift program. And you can’t forgo one for the other.
And so, I think a good example of this right here. So, what we see here in this slide is that during the analysis period, revenue from the sustainers has increased from 27% to 39% of total revenue. And at the same time, the share of revenue from single-gift donors has declined from 73% to 61. This is really just a function of how people are giving, but it should not give you the impression that you can forgo the single-gift program and not pay attention to it.
We all know that sustainers are terrific because of their high renewal rate, but there’s two things to be mindful of. And Brett was just talking about both of these. Number one, you don’t want to be bringing sustainers on at too low of a level. So, we know that once sustainers pick a giving level, it’s often difficult to get them to move up off of that initial gift amount.
So, no $5 sustainers, even if you’re a TV station or a joint licensee and you offer Passport just because the floor for Passport is $5, we don’t want to be promoting that $5 level. Ten is the new five. So, I would say that $10 is the new monthly entry point. I think equally as important, and this is what Brent was talking about a couple of minutes ago, is that at some point growth from those high retention sustainers is going to top out. Right now revenue from sustainers is growing because people are converting existing one-time members to sustainers.
They’re also adding new donors as sustainers. They’re coming on to the file for the first time as a sustainer. That’s great. And that’s what sort of driving the large number of new sustainers on the file. But over time, all of your existing donors will have already heard the sustainer message.
And many of them will already have made that decision, those multi-year donors, about how they want to give. So, again, it’s really an And strategy of paying attention to both your sustainer program and your single-gift program. It’s just more work for you all. We know that. You’re going to hear that a lot, it’s just really, you can’t forego one program for the other.
So, moving off of the sustainer versus single-gift discussion, and instead talking about annual value mix. This shows for all donors, regardless of how they give, and regardless of channel, how much those donors are giving cumulatively. So, what percent of the donor base are donors in each of these giving levels and what percent of the revenue that is.
Something for you to think about as you start to plan your next fiscal year is, do you know what percentage of your donors are giving at each of these levels and how much revenue is represented at each of these giving levels? This would be something that I would use as a benchmark. So, I would suggest that you calculate these numbers for your own station and see how you compare to this benchmarking that we have to share here.
I know that as I’m talking to stations that work with our agency and stations that are all over the country, whether they use our agency services or just our CRM, I know that a lot of stations are starting to talk about and think about putting their shoulder into a mid-level giving program at around that 500 to 1,199 level, with many major donor programs starting at a thousand or $1,200.
So, there is, I hear a lot of chatter about mid-level donors and needing to do something for mid-level at that 500 to 1,199. But based on the data that we’ve seen in the survey of stations that we’ve done across the system, what we’re really seeing is that it’s hard for most stations to move donors off of the hundred to 149 level.
And you can see here that’s where there’s a majority of the donors and a majority of the revenue, at that a hundred to 249. What we are recommending is that you start thinking about developing strategic giving levels with associated benefits that provide destination points to help move your donors up the giving ladder.
So, our recommendation is that each destination point or each giving level should include benefits in four different categories, communications, engagement, recognition and then what we call swag, not necessarily just premium oriented stuff, it could be stationed branded things that sort of show their support.
Allegiance offers a new Always Be Upgrading program that provides stations with a strategic approach to mid-level and major giving that can be customized as you see fit. So, our approach would be to find out where your donors are giving compared to this matrix and then work with you to identify, do you have the right destination points for your station? And do you have the right benefits in the right communications to help move your donors up the giving ladder? If you are interested in learning more about our Always Be Upgrading program, either reach out to myself, Debbie Merlino, or any of our client managers if you already work with the agency.
Brett: So, this next slide circles back to something that we’ve talked about before. So, this is showing the revenue per active donor in the five-year timeframe. So, it’s really exciting to see this going up. It means that, per donor, donors are giving more. But between FY20 and FY21, that is a pretty big jump.
The prior years the growth had been a bit more steady. And again, not that it’s bad news, we’re certainly happy to see that, but like we talked about before, we can’t depend on this for revenue growth. We need to keep on doing acquisition and cultivating donors at the lower levels as well in order to keep funneling new donors into the program.
Debbie: So, this next slide is a little more detail about what Brett was just recently talking about. So, this slide shows the revenue per active donor for sustainers versus the single-gift program. And last year in a similar webinar, this is something that we noted and quite frankly, were a little surprised about the first time we saw it, which is that the revenue per active donor for sustainers and single-gift donors is very much reaching a sort of similar point.
And that’s one of the reasons why we said earlier that you can’t pay attention to only one program, that you really do need this And strategy focusing on both sustainers and the single-gift program. So, while they are very nearly the same, in a single year, the higher value in the sustainers comes from their overall higher retention rate compared to the single-gift donors.
But again, I cannot say this enough, I’m going to keep saying it until you’re tired of hearing it. You really need as a strategy for both types of donors, your sustainers and your single-gift program. Both are nearly equally valuable when it comes to the revenue per active donor.
Brett: Something else to keep in mind, Allegiance has a strategic partnership with an organization called Arjuna. They use artificial intelligence to calculate the optimal gift string for your donors, lapsed donors and your prospects for that matter. They work with all different types of nonprofits, and their goal is to balance average gift with response rates.
We’ve been seeing terrific results in public media. So, if that’s something that you’re interested in getting more information about, please let us know.
So, this is an interesting slide. This is the percent of donors that are both sustainers and have single gifts on record.
Because of the way that sustainers don’t convert for fiscal year, so they might start off the year giving single-gifts and then convert in the middle of the year. Some of these people are people that did just that, where they converted, in the year.
But we’re comparing the same trendlines from year to year. Anyway, it’s just interesting to see that this number is growing. We know that upgrading in getting sustainers to give single gifts is very difficult. We’re trying to do more and more engaging sustainers and would suggest that you really think about how you message your sustainers.
Are you setting that expectation that you’re going to continue to ask them for additional gifts? But also think about all the ways that our audiences engage with our programs. Now, if it’s on-air fundraising, direct mail, phone, or one of a number of ways that they can engage with us digitally, you can’t necessarily speak to your whole sustainer audience as a monolithic group. Similar, with your single gifts or your lapsed, that you really need to think about what is their motivation, who are they, what’s their history with you and consider how to message them differently. With sustainers, that might mean if you’re a television station, maybe some of your sustainers are behaving more like subscribers as opposed to donors.
So, the question is how do you identify those different levels to pull out the people that have more philanthropic goal in their support and try to cultivate them further while still maintaining that relationship with the people that perhaps aren’t going to give you additional gifts, but you want to keep them giving us a sustainer.
Debbie: Brett, just quickly before we move forward, there was a question that I just wanted to address. I think the question came a little earlier on, and it speaks more to the data in this presentation as a whole, as opposed to any one metric, which is that, does this information match the data of a station of my particular size?
So, what I just wanted to say is that this benchmarking data aggregates the data from stations that work with Allegiance Group with our agency. So, it does include data from stations of all different sizes. But when we have looked at individual stations and how they compare to the benchmark, we have found that this benchmarking data does end up holding true for stations of all sizes, because what we’re really doing is looking at overall trends.
Brett: I would also add that the data includes television stations, radio stations, classical joint licenses. So, it is a mix of formats as well.
This index looks at new donor acquisition. So, we’ve been beating this drum for a while. We can see that the acquisition performance is lower in the five-year timeframe. Like we’ve talked about before, sustain our retention is amazing. It does a lot for sustaining the size of your file and your donor base, but you need to keep feeding new donors into that, both to hopefully come on either as a new sustain or convert to sustainer or continue to be a single donor and giving you the one-off contributions.
You just have to keep up with the acquisition to continue feeding new donors into the pipeline.
Debbie: Yep. And I think, again, to beat that dead horse all the way into the ground, what this really is showing is an indication that there’s more and more pressure on the existing donors to drive revenue.
So, at some point you are going to be, you know, bleeding those existing donors, dry, not being able to get any more juice for the squeeze. We do really want you all to be mindful of, as you are building your budgets for the upcoming fiscal year, to make sure that you are adequately planning for new donor acquisition activities in all channels.
So, here a little deeper view at the new donor index where we’re breaking out sustainers versus the single-gift program. So, you can see that there’s 8% more new sustainers, but fewer new single-gift givers. And as we’ve mentioned a couple of times, of course, it’s important to continue to be working both the sustainer and the single-gift program. Each has their place in any program. And again, as you’re looking at plans for the upcoming fiscal year, make sure you’re paying adequate attention and have adequate plans in place for bringing on donors, not only through all channels, but different types of donors as well. So, it’s like playing two- or three-dimensional chess.
You want to make sure that you’re using all channels, both direct mail and digital to be bringing on new donors. And then you also want to make sure that you have adequate messaging in all channels about becoming a new donor as a sustainer, as well as becoming a new donor through a more traditional, single-gift program.
Brett: We can see here that sustainer giving average gift is remarkably steady. There is more fluctuation with the single-gift donors. So, would that you need to ask yourself with all of the channels, how are you trying to upgrade your sustainers? But, even more important, what are you doing to maximize that initial gift?
Sustainers are difficult to get to upgrade. So, making sure that you get the largest gift of that outset is really important. Debbie mentioned $10 is the new $5, so not that you can’t give people the option to give for $5, it’s just about what you’re asking for and how you present that in terms of your messaging.
Debbie: I think it’s a really good point, right? It’s not that Passport is not available at $5, but as Brett said, you get what you ask for. So, while it’s available, it shouldn’t be promoted at that level. The vast majority of the stations that we work with are starting the sustainer ask at $10, some even a little higher.
And with those that have moved off of the $5 a long time ago, they have done so without seeing it depress response from folks converting to sustainer. So, I think that’s important. So, if you’re embracing the $5 because you want to make sure you’re getting as many sustainers as possible, I would say that’s wrong minded and you’re shooting too low.
So, again, 10 is the new five.
Here we are looking at the average gift for new donors in the single-gift program. And you can see here how this has been increasing over time. And again, just a reminder that this reflects giving from all channels, so on air, as well as mail, digital. I think it’s important as you go into the next fiscal year for you to calculate this metric for your own station for those single-gift donors.
And remember the goal is to bring on the maximum number of new donors. So, if you’re ask string, regardless of whether it’s on air or digital or indirect mail, if the ask string is too aggressive, you’ll hinder their response because oftentimes average gift and response rate, it’s like a Seesaw as one goes up, the other goes down. So, if your new donor, or if your acquisition ask amount is too high, you’re likely going to be suppressing folks from giving for the first time. If it’s too low, you could be leaving money on the table. Similar to what Brett was talking about with our partner Arjuna and the exact ask product, it’s really about finding a way to find that sweet spot.
So, this is a reason for you to think about, if you haven’t already, do some ask string testing and acquisition and making sure that you’re maximizing the overall average gift at a place where you’re not hindering the response.
Brett: And I wanted to share some testing that we’ve done in the past, because I feel like it demonstrates all the things that you need to consider in evaluating your new donor ask.
We’ve tested for a number of stations an open ask, where the donor decides how much they’re going to give, and any amount qualifies them to become a member. When we’ve done those tests before I think that the most extreme results that we’ve seen are the response rates doubled and the average gift was in half.
So, the great part about that is that the net revenue, the net investment was the same for both the control and the test, that they had twice as many new donors in the test. But what we really needed to look at beyond that was what does the long-term look like?
So, we examined what sustainer conversion rates of giving add gift, as well as what the averages were for those, looking at renewal rates, renewal averages to make sure in the long run that we weren’t just getting an immediate payoff, but in the long run that those new donors are paying off.
And we did find that those long-term numbers did pay off. But it is really important to really consider what the larger impact of an ask is.
We’ve talked a bit today about acquisition as a way of adding donors. We also don’t want to forget about donor reactivation. So, cultivating those relationships is really important. We talked a little bit about Exact Ask. they have a companion program called Exact Donor, which similarly works with the Exact Ask to identify who the most likely targets are for reactivation.
But you don’t have to even use a tool like that. You can use the information that you have on your file. Consider in your lapsed donor file, not just recency. When you’re going to a lapsed donor, did they give multiple gifts before, did they make add gifts? When they gave their gift, did they take a premium or not? And use that information to find your best lapse targets to go back to. You don’t want to get just an initial gift, the goal is to really reacquire people who are going to be supportive of your mission, and that they’re going to make add gifts, hopefully become a sustainer. So, again, all that information that you already have in your file will help you do that.
Debbie: So, here we are looking at a slice of retention. So, second year donor retention for sustainers versus single-gift donors. And there’s an old fundraising adage that goes, a donor isn’t a donor until they make their second gift. So, there’s so much time and effort into bringing on a new donor, regardless of whether it’s a sustainer or through the single-gift program, that you really want to make sure, as Brett just said that you’re doing everything that you can to keep them once you get them.
So, if your second year retention rates are declining, and for the single-gift program, if they’re not reaching metric or this KPI, this benchmark of 35%, then I think there’s a number of things that you can do as you think about planning your next fiscal year. So, number one would be to evaluate your current acknowledgement program. Are they going out in a timely manner, is the very first thing? Oftentimes donors of all sizes will test an organization and perhaps give them a smaller gift and use that as a way to test the waters and see how they’re treated before they make an ongoing commitment to an organization, even when that they feel very positively about.
So, one of the easiest and quickest things that you can do if you see that your single-gift second year donor retention rate is not reaching this benchmark is to really look at your acknowledgement program. Number one, are you holding back and not asking donors for that second gift as quickly as possible?
I hear it a little less commonly now, but I heard it when we were in the worst of COVID times early on. And I still hear it a little bit that some stations feel like, someone just gave a gift, and we want to rest the donors and we don’t want to be too aggressive or we don’t want to be too aggressive, especially now. That’s actually counter to what the data says.
So, when somebody makes a gift to you, whether it’s their first gift or their twenty-first gift, at the time that they make their gift, that’s when they are feeling the most positively about you. And that’s a perfect time to ask them for another gift. But always remember that your donors are not ATM’s. So, it can’t just be asking for a gift and asking for a gift and asking for another gift.
The communication process should be, you ask them for a gift, they make the gift, you acknowledge the gift, thank them for the gift, close the loop with them about how that previous gift was used. What were you able to accomplish? And then let them know how much more work there is still to do and how much more can still be accomplished with their help and with another gift.
So, make sure that you are not resting your donors. And do you have variable copy in your monthly renewal series? So traditionally what you’ll see us do for the clients where we manage their monthly renewals, we are crafting customized copy for new versus multi-year donors in the first or in the first few efforts of the monthly renewal series to make sure that message is really tailored, especially around those people that are up for becoming second year donors.
We really want to embrace them, let them know how important their first gift was to the organization, how it was used in the past year and how we need their ongoing support to be able to achieve the missions of the organization.
Along with the number of donors and the average gift, gift frequency is what I refer to as the third leg of the revenue stool. So, you’ll see a steady rise here, both in the number of gifts for both sustainers and single-gift donors year over year. If you’re not seeing a similar rise for sustainers, one of the things that you should be looking at your program, if you’re not seeing an upward trend that looks like this is making sure that your backend processes are all spot on.
So, do you have adequate processes in place to manage any rejects? Also, for sustainers, but as well as single-gift donors, what is your calendar year-end series look like? This is a time when majority of folks are making gifts to their favorite nonprofit organizations. So, between Giving Tuesday and New Year’s Day, this drives a significant amount of revenue and gifts for most organizations, including those in public media.
Some of our strongest calendar year-end series include a total of 14 emails during that period from Giving Tuesday to New Year’s Day, with maybe just two or three stewardship emails out of that 14 with the rest of them being asks. So, again, make sure that you are taking full advantage of calendar year-end, make sure that you’re building that into next year’s budget with a very robust program.
And then lastly, if you’re not seeing these increases in gift frequency, consider adding another campaign. It’s just a truism that the more you ask, the more you get. So, maybe that’s a special appeal during the course of the year in addition to your three or four quarterly campaigns, or maybe it’s something like a printed newsletter during the course of the year to help increase and nudge up the number of gifts per donor or the gift frequency.
Brett: And then, back to the second gift strategies that we were talking about, the data shows that the sooner that somebody makes a second gift, the more likely that they’ll renew. So, consider how you’re welcoming your new donors, but really how you’re stewarding all of your donors.
And just remember that we know how much all the stations that we work with appreciate their donors. You just need to make that clear to them and say thank you, share what’s happening at the station and the impact that their support makes on the programming that’s available.
Debbie: So, we have about nine minutes left, so we’re going to amp up the pace just a tad to drive to the hard finish, because we also want to make sure that in addition to sharing these KPIs with you, that we also have adequate time to talk about steps that you should be taking as you’re building your budgets for the next fiscal year.
So, just quickly, I wanted to touch on donor retention. Here you can see that the average donor retention for sustainers has been in the 80% range plus or minus. And that for single-gift program, their attention rate has hovered near 60%. Outside of public media, anything over 50% for retention for a single-gift donors is very strong.
So, I think in the world of fundraising in general, I would say that public media enjoys better than average overall donor retention rates. And again, I would use these as benchmarks and see how your own station is fairing compared to these numbers.
Here we have a breakout of second year retention rates by first gift channel. Traditionally, and as you will see represented here for FY21, if someone’s first gift was made through direct mail, that has been an indication that they will have the highest second year retention rates. What we’re seeing is that online and digital is also very strong at that 52%. And I think that this is really an indication you need to be using all of the channels to communicate with your donors. So, if you have your donors siloed into different communication channels, that’s certainly a mistake. You should be using all of the channels that you have at your disposal to be communicating to all your donors.
Brett: And I would just add, consider the motivation of the gift. So, somebody who’s a premium donor might not be as committed as somebody who’s not, like somebody who might be joining to get Passport content, might not be as strong of a donor as somebody who might have demonstrated, their commitment in other ways to the mission.
Debbie: And so I think, as you’re building your budgets for next year, if you find that you’re in a cost cutting position one of the things that you can think about is what are some of those sub-segments, like Brett mentioned, that you might be able to whittle out of later efforts, in your direct mail renewal series, for example, but only if you find that you’re in a cost cutting mode in the next fiscal year.
So, moving to this multi-year donor retention, you often hear people talk about the high retention rate of sustainers, and you can see how it’s been improving since FY17, currently at 85%. But what you don’t hear as much about, and I think you should, is the high retention rate for single-gift givers for those multi-year donors, here at 72%. So, if you thought I forgot from 20 minutes ago, I have not forgotten. Again, this is a reason why you need that And strategy, especially for those multi-year donors, those single-gift multi-year donors are still extremely important and you should not ignore them and put all your efforts on the sustainers. It really needs to be an And strategy.
Lapsed reactivation. So, here are the reactivation rates for both lapsed sustainers and single-gift donors. I think the message here is especially around the sustainers. So, we recommend taking lapsed sustainers and putting them back in the regular communication flow. So, worry less on getting them to renew their sustaining gift and focus more on bringing back the donor as an active donor. So, again, one tactic to put in your quiver for the upcoming fiscal year.
Brett: We’ve seen this in other places today before, the sustainers and the single gift giving in any given year is pretty close. So, really the value from the sustainers comes from the higher retention.
Now we’re going to just take a couple of minutes to talk about how you can incorporate these findings into your own fundraising plans. and we do say plan very intentionally. When you start your budgeting process for FY23, which I can’t believe they’re already talking about, but you need to start with a plan first, not go straight to the budgeting.
Building your plan means that you need to know what are your KPIs, what are the trends on your file? are you shrinking in any areas, overachieving in any areas where you want to make the most of what’s happening that’s positive, and then make any fixes where you might be underperforming.
And that’s looking at retention, gift frequency, average gift, your overall donor counts, revenue. And then with that information, think about what are your goals. Ultimately, the goal is that you want to raise as much money as possible year over year, but really digging in, is it that you want to increase the number of new donors acquired, that you feel like your best opportunities with second year retention, whatever that goal is.
And then you build your plan around those goals, taking the actions that you need to achieve those goals and making sure that you’re investing your budget in the areas that are going to get you where you want to go.
So, we talked a little bit about this earlier, but there are three ways that you can increase your gross revenue, and that’s by getting more donors, getting more gifts from your donors, and increasing your average. So, again, as you’re building your plan, something to think about. Another way that you can increase your net is of course, by cutting costs. We talked a little bit about ways that you can do that, as doing more targeting, being more efficient with your mail or your digital efforts for that matter.
But making sure that you’re really going to the right audiences.
Debbie: If I can just add onto that. I think it’s really important that there are times when cost cutting is an important tactic that you can leverage in your budget, but that’s really an extreme measure when times call for it.
Growing your net revenue strictly through cost, cutting, that might happen in emergency situations for a year, hopefully not two years back-to-back. But it’s not a long-term strategy for growth, right? That’s more an emergency situation. So, as much as possible focusing on the three ways to make more money, more donors, more gifts per donor, and a higher average gift is really a growth strategy that’s going to propel you and your station for growth well into the future.
Brett: A lot of stations struggle when they’re looking at their budget with their board or their accounting department. And when they look at the cost of acquisition, you just have to remember what the bigger picture is, what the long-term payoff is.
So, when we talk about cutting costs, it’s really about making your campaigns more efficient, but not cutting off investment. You definitely need to keep that bigger picture in mind.
Debbie: So, I think I would just say if the KPIs that we talked about today are something that you don’t have a way to calculate for your own station, please reach out to either Brett or myself, [email protected] or [email protected] All of this data came from the Strategic Growth Analysis that we perform for our clients and could do so for you as well, if you’re interested.
I think with that we want to thank you for your time and attention today. If you have any questions about anything that you’ve seen in today’s webinar or would like some help planning for the next fiscal year or executing any programs for the next fiscal year, please reach out to either myself or Brett, or if you’re already working with Allegiance Group, reaching out either to your account executive or your fundraising strategists on the agency team.
Again, thanks for your attention and have a great day, everybody. Thank you.