Now Everything Depends on Sustainers, Part 1

Is a robust monthly donor program the only reliable path to nonprofit growth? The answer, increasingly, appears to be yes.

Blackbaud’s Luminate Online Benchmark Report 2017 confirmed what many of us were seeing and feeling — dramatic growth in sustainer giving online (+20.4%) offset losses in new donor support to enable more than 10.2% growth in online revenue.

The implication is pretty significant: Online giving is keeping charities moving forward right now. Total giving, according to Blackbaud’s Charitable Giving Report 2017, has inched along at just 4.1% since 2016 . Take the double-digit online growth out of that equation, though, and it’s closer to flat.

To put it simply: Charities wouldn’t be moving forward much without online growth. And online giving wouldn’t be growing much without the contribution of sustainers.

Or, to put it even more simply: Nonprofits that aren’t building a healthy sustainer file are either flat right now or will be soon.

What’s going on?

It was not always thus. It used to be nonprofits had many potential paths to growth. And sustainers were just one good option among many. Serving in marketing at World Vision from 1999 to 2010, I saw firsthand the power of sustainer marketing . . . and its challenges.

Back then, the monthly donor model was largely dependent on a powerful offer. People weren’t that eager to commit to monthly gifts, apart from a strong inducement to do so. So successful monthly programs depended on the promise of experience-rich, personalized donor-child relationships or large, concrete offers made accessible as a series of installments.

You needed urgent, heartrending appeals for sick children or wounded animals that created a one-to-one connection through monthly photos and stories.

But you had plenty of other options for growth. And many organizations seemed to grow without sustainer programs. Monthly donors were a (very) “nice-to-have,” but not necessarily a “need-to-have.”

Something has changed since then. And it has made monthly giving both more attractive to potential donors and more essential to nonprofits. For a clue to what has changed, I’ll refer to Zuora’s The Subscription Economy Index (2nd Ed., June 2017): “Subscription businesses grew revenues about 8 times faster than S&P 500 company revenues (15.2% vs. 2.0%) and about 5 times faster than U.S. retail sales (15.2% vs. 3.4%) from January 1, 2012, to March 30, 2017.”

The new normal

Those data essentially mirror what charities are experiencing. The conclusion seems clear to me: We’re seeing a tectonic shift in consumer habits that is rendering monthly or subscription-based giving as a dominant preference.

Once you think about it, the trend is obvious elsewhere. Netflix is soaring, and DVD sales are plummeting. Spotify is leading a pack of subscription-based music services forward, leaving digital music purchases in its wake. From your kid’s favorite video game to your favorite online megastore, chances are pretty good you’re paying a monthly subscription for the experience.

This is what our donors want. And we need to get with the program. That’s why I invite you to join me on August 2nd for the second posting in this two-part blog series. Now that we have the background firmly in mind, we can talk about 7 ways to rev up your sustainer giving in order to better acquire and cultivate these most valuable of donors: monthly givers.

Stay tuned . . .