A metric that can change and should change over time
When it comes to Regular Giving, we all know that the role of ‘Average Gift’ is an important one. However, when looking at key acquisition channels such as F2F and Telefundraising Average Gift can be seen, at best, as a metric amongst many others, and at worst, a metric that must be sacrificed when compared to other key metrics such as conversion rates, volume, and cost per acquisition (CPA).
Public Outreach has long been an industry leader in Average Gift. Our Telefundraising RG campaigns often see averages of $26-$31 per month/4-weekly. We also see strong performance on child sponsorship programmes, making us an agency-of-choice for many organisations that have these high-value products as part of their portfolio.
There are many reasons for why we have such a robust Average Gift culture at Public Outreach. Ultimately, it comes from the knowledge that we must look at the combination of CPA, Average Gift and Retention to determine the long term value of Regular Givers.
By being industry leaders in this space we know we have an important role to play in this discussion. Both in creating a better understanding as to why Average Gift simply cannot be sacrificed, but most importantly, how do we ensure it sees appropriate growth over time in our programs?
The current landscape of Regular Giving
In recent years, Regular Giving has made up 45% of all Individual Giving income in Australia and Regular Givers make up 50% of all our donors. Regular Giving is predictable as well as forecastable making it a popular choice for many organisations.
However, the recruitment of new supporters has remained relatively flat in Australia since 2017, and many larger channels that generate significant volume have seen only very small increases to average gift over time.
According to data provided by The Benchmarking Project back in 2022 we can see this plateau effect occurring on our largest recruitment channels. The Average Gift for F2F was $30.50 in 2015 and around $33 in 2021. Similarly, the Average Gift in Telefundraising was $21 in 2015 and around $23 on average in 2021 and 2022.
The case for improved Average Gifts in Regular Giving
Average Gift is generally increasing by a small rate year on year however these increases are not keeping up with inflation. This essentially means that the value of Regular Giving as a product is eroding over time and needs to be looked at and re-evaluated.
In a time where cost-of-living discussions are dominating our headlines we understand that this can be a controversial, and even, ‘scary’ topic to raise. However, as fundraisers, we do not need to feel battered helplessly by the economic headwinds that currently lie on our doorstep.
Regular Giving helps to drive value from relationships over time in a variety of ways. Growing value in our regular supporter bases can and should include increasing Average Gift levels in line with inflation, at a bare minimum.
So, how do we change things?
The critical role of the fundraiser
The front-liner’s role is critical when it comes to Average Gift. In many ways, this is one of the areas a fundraising agency has the most control and the biggest influence in terms of shaping the outcome.
At Public Outreach we have always believed quite strongly in the power of rapport building. Rapport for us typically lasts for about 3-4 minutes which is on the longer side of the spectrum. A good call strategy involves heavy rapport building around the charity’s work but also outside of the charities work. Our brain’s are designed to detect trust and distrust quite naturally (and quickly) in our everyday conversations. Trust is the first signal we seek to determine whether we can open up and close down.
Good quality rapport moves fundraising conversations away from simply being ‘transactional interactions’ and into more 'transformational interactions’. A powerful conversation can not only inspire someone to financially support the issue you’re speaking about, it can change someone’s life. Strategic rapport also helps ensure that conversations are quickly solidified as taking place in a trustful space by turning ‘I’ sentences into ‘We’ sentences.
Conversations must be transformational, co-creating and full of trust to get the best outcomes.
If a conversation is too transactional, the supporter will feel the need to negotiate around the monthly amount and the Average Gift will erode later in the conversation. If the supporter doesn’t feel there is the right level of trust or personal transformation happening (i.e. sharing and discovering), they will raise more and more financial and non-financial concerns throughout the conversation. Again, this will have a negative impact on where the Average gift lands.
The critical role of our ‘Average Gift’ culture and our views on the ‘Ask Structure’
A sticking point on many fundraising campaigns can often occur around what the Ask Structure should be. This tension usually sprouts from the common concern many have with how Average Gift, if pushed too high, will have a negative blowback effect on attrition.
However, there are many ways to increase Average Gift and maintain similar (or better) retention levels. When conducting our own retention analysis internally - increasing Average Gift works when the overall conditions are conducive to it (more on this below), and the fundraising strategy used is one which herds the majority of people to the middle.
Increasing the Average Gift is not about raising the maximum from $50 to $60. It’s not a genuine increase if you’re relying on a few extra $50-$60 gifts to inflate the average. It’s about getting the majority of new supporters on board for $20, $30 and $40, whereas previously, they were donating $10, $20 and $30.
When looking at retention rates, we do genuinely see attrition issues across Telefundraising and F2F supporters signed up for more than $50 per month (excluding child sponsorship). However, we can also sometimes see these same attrition rates on supporters who were signed up for $15 or less.
Generally the friction is happening at the beginning or end of the Ask Structure. With regards to those donating more than $50 - this seems to simply represent a genuine issue of ‘too much for the long term’ for most Aussie supporters. In the case of higher attrition for $15 and below, this generally happens because the supporter was moved through the Ask Structure in a transactional way. A negotiation took place where they were offered options A, B and then finally C and you can see the ‘wear down’ effect that has occurred. This is the unfortunate problem with not building enough good quality rapport which has diminished the quality of the fundraising.
Ultimately, a transactional interaction at the point of sign-up will lead to an unsustainable transactional relationship between the charity and the donor thereafter.
The role of lead providers, digital teams and appropriate physical locations
It’s important to note that the success of the two above areas are dependent on if they’re allowed to occur in a conducive environment. F2F has good natural flexibility here. A F2F front-liner can choose who they speak to, and therefore, who they interact with and bring on board. Having said this, access to good locations and sharing knowledge around physical locations which have historically performed well (on both sides) will ensure that the front-liners are continuing to meet the charity’s donors in the places they most typically frequent.
The role of lead providers and digital teams is more paramount in ensuring the success of the Telefundraising interactions. This does not necessarily mean we need the most expensive leads out there. There are many pockets of opportunity in the current lead landscape that are available and ‘what works’ tends to differ from organisation to organisation.
Before good conversations can occur - there are many factors that should be considered beforehand. Are the prospects cause-aligned? Are we targeting people in an appropriate socio-economic bracket? Has the call-to-action been linked to the need for financial support? Do these individuals exhibit behaviour that indicates they are comfortable with taking unpremeditated action, and are therefore open to ‘taking action on this issue today’?
What can you do? Easy steps you can start implementing now
Work on your supplier relationships -Do you have a good relationship that shares the same goals around Average Gift? Do you have a good ‘Average Gift culture’ on all sides that understands the need for average gift parameters, but at the same time, is unapologetic when asking supporters for higher Average Gifts once trust and quality have been established? The importance of our causes are important. Are we demonstrating the right level of loyalty to supporters as well as to the beneficiaries we represent and advocate on behalf of?
Collaborate with your agency to create an effective Ask Structure -Dollar handles can be incredibly powerful for front-liners and is one of the biggest ways a charity can assist in this process. What impact can we demonstrate to a supporter in a visual and tangible way?
Upgrades - Do you already have a lot of regular givers on a low Average Gift? Beefing up your Upgrades strategy and program is a brilliant place to start! Regular Givers acquired via Telefundraising are a key place to focus on first as you’ll get the best results. These Regular Givers commonly have the highest propensity to upgrade. This is due to the fact that the majority of upgrade activity is being run via Telefundraising and due to the fact that - by function of their recruitment - these donors are most likely to have a telephone number as well as a history of picking up the phone.
Donor Stewardship -Are we happy with this or does this need work? Is the supporter journey ‘good enough’ for someone who is giving us, let’s say, an average of $360 per year?Donors at the very beginning often report that their first gift gives them a sense of wellbeing. They had an amazing conversation with a front-liner, they feel great about giving and consider it a positive action. However, this needs to be maintained over time. Supporters need to feel they are appreciated, that their gift makes them feel like they’re taking direct action, and most importantly, they need to receive a sense of ‘value’ for their donations.