The relative value of growing sustainer giving

More and more, I’m encouraged to see nonprofit organizations leaning into recurring giving. Leaders are recognizing that the Subscription Economy has made consumers and donors comfortable with discretionary giving on a monthly recurring basis. 

If you don’t yet see how the Subscription Economy is reframing monthly giving, I’d encourage you to see my 2021 post How the Subscription Economy Makes Sustainer Programs Possible.

Today’s post assumes that you already see an opportunity with sustainer giving, but you want to quantify it — for your board, your leadership team, or a key decision-maker. 

Three Key Metrics

When making the case for investment in sustainer giving, there are three key metrics to review in the process:

  1. Growth rate reflects the number of new sustaining donors there are coming into the organization. It’s easiest expressed as a percentage growth for each of the past three to five years.
  2. Retention is the first place the value of sustaining donors becomes apparent. For most organizations with an automated giving (i.e., not check-writing) program, multi-year retention hovers around 90-95%.
  3. Long-term value (LTV) is where the true power of recurring giving shines. In our research, the LTV of a monthly donor is anywhere from 3-5X the LTV of a traditional single gift donor. In a recent analysis of ten different nonprofits, we found that the five-year LTV of a sustainer ranges from $1,240 on the very low end, up to $2,444 on the high end. The average was $1,956.

With these three metrics, you can make a very simple model showing the potential additional income from improving your growth rate, retention, or LTV. In other words, you can go to your decision-makers and show that an X% increase in growth rate will result in $Y additional LTV to the organization. You can also show an estimated cash flow with these three figures.

LTV is the #1 Metric

The single most important metric when making fundraising decisions is LTV, and nowhere is that more important than with your recurring giving program. 

Every metric that you look at, every decision you make with regards to your sustainer program, should consider the LTV. Case in point — if you are only looking for the cost to acquire a donor to be as low as possible, you will never invest heavily in recurring giving. Why? Because it costs more to acquire a recurring monthly donor than it does to acquire a single gift donor. 

Put another way, if I offered you a choice between two options:

Choice A: 100 new donors at a cost of $80/donor
Choice B: 100 new donors at a cost of $250/donor

Which would you choose?

Hopefully, you sense the trick question here…I didn’t give you the information you really needed to make a good decision!

Let’s say you asked me the question — what is the LTV of the donors acquired in each scenario?

Choice A:Same as above — LTV of a new donor is $491
Choice B:Same as above — LTV of a new donor is $1,703

Now that we understand the LTV of a donor, let’s look at how these choices would play out.

Scenario A:
Cost: $8,000
LTV: $49,100
Long Term ROI: 6.1

Scenario B:
Cost: $25,000
LTV: $170,300
Long Term ROI: 6.8

Choice B would end up resulting in nearly TRIPLE the net income going to ministry and at a better ROI. 

Building and Growing Sustainer Giving at the Outcomes Conference 2022

I will be co-leading a workshop at the upcoming Outcomes Conference on Building and Growing Sustainer Giving in the Subscription Economy with Carly Berna, VP of Marketing and Communications at Jewish Voice International. If you are going to be in Louisville, we’d love to see you.

And if you aren’t registered, I highly recommend it. The Outcomes Conference is consistently the top conference for nonprofit ministry leaders. 

Hope to see you there!

Dave Raley
EVP Strategic Innovation   


CLA Outcomes 2022
Galt House, Louisville, Kentucky
April 26-28, 2022

Workshop
Building and Growing Sustainer Giving
Wednesday, April 27, 1:30 pm
Dave Raley, Executive Vice President, Strategic Innovation, Masterworks
Carly Berna, Vice President, Marketing and Communications, Jewish Voice Ministries International

Recurring giving is more important than ever. We’ll cover the trends transforming sustainer giving, changing donor expectations, and a case study for how Jewish Voice grew their sustainer program 252% over the past five years. Outcomes: 1) Comprehend the trends transforming recurring giving and reshaping donor expectations, 2) Gain insight from the six critical elements of a new breed of successful, growing sustainer programs, and 3) Apply practical lessons and examples of recurring giving programs that are growing.