Using AI to Unlock the Potential of Your Donor File
For nonprofits, the value of monthly recurring donors is clear. Compared with single-gift givers, donors who have committed to an automated monthly gift will retain better, provide higher long-term value, and cost less to effectively cultivate.
When launching a recurring donor recruitment campaign, nonprofits face a critical decision: which donors should be asked for an additional one-time gift and which donors should be invited to join a recurring gift program. Asking for monthly commitments will often result in a lower response rate compared to single-gift appeals. Additionally, not all donors on your file will be willing to convert to monthly recurring donors, but if the right donors are asked, a monthly donor recruitment campaign can result in meaningful long-term revenue growth.
Fortunately, nonprofits can simplify the decision-making process by leveraging artificial intelligence (AI). Machine learning models, such as the Masterworks Recurring Gift Model, allow organizations to make smart and informed decisions about which existing donors to include in a recurring donor recruitment campaign in order to maximize long-term return on investment.
The Value of Monthly Recurring Donors
In a turbulent economy, it is difficult to overstate the value that a strong base of recurring donors provides a nonprofit. The steady, predictable stream of revenue allows organizations to plan and execute programs with greater confidence.
Expanding your recurring donor program goes beyond creating a reliable revenue stream. It also holds the potential to elevate your organization's impact by increasing the value of donors already in your database. According to recent analysis conducted by our team, the conversion of active single-gift donors to recurring donors resulted in a remarkable growth in value, exceeding 2x in the first year after conversion. Additionally, these converted donors exhibited a retention rate 23% higher than other active donors who contributed an additional one-time gift in the same year.
The Power of AI
The Masterworks Recurring Gift Model is a prime example of leveraging AI's potential. This model considers a wide range of behavioral factors (e.g., a donor’s gift frequency over the last 12 months) and donor demographics (e.g., age, income) in order to determine the likelihood of a recurring gift signup for each donor on your file. This enables organizations to optimize their recruitment efforts and allocate resources efficiently. In a recent recurring gift recruitment mailing, we found that donors that scored in the top model segment (S1) were 24x more likely to sign up as monthly donors than donors in the bottom segment (S5).
The information this model provides allows organizations to make smart and informed decisions while selecting which donors to include in a recurring gift recruitment campaign.
Optimizing Recurring Donor Recruitment
In the nonprofit fundraising world, recurring monthly donors hold immense value. With better retention rates, higher long-term value, and cost-effective cultivation, they are increasingly vital to organizational success. Leveraging the power of AI through models like the Masterworks Recurring Gift Model enables nonprofits to identify potential monthly donors within their existing base, optimize recruitment efforts, and allocate resources efficiently. This strategic use of AI and machine learning technology empowers organizations to make informed decisions, maximize the growth of their recurring donor programs in an efficient way, and ultimately, increase their programs and impact.
Do you need more active, passionate donors giving to your cause monthly? We’d love to talk about building sustainer programs and models that will help your organization thrive!