Online platforms have increased both reach and competition in the nonprofit sector in the past 10 years. The value of recurring donors is large, and organizations are eager to increase the lifetime value of those who contribute.
GlobalGiving is a nonprofit providing a global crowdfunding platform through which donors can give to grassroots charities — it allows their 2,800+ nonprofit partners to reach far more people than they might otherwise.
Working with the knowledge that revenue generated by repeat donors is four times that of one-time donors and the cost of retaining an existing donor is three times less expensive than acquiring a new one, GlobalGiving focused on increasing the rate of conversion of donors to repeat donors.
Collaborating with academic researchers, the organization conducted a low-cost, online experiment: On the checkout page, some donors were told recurring donations would be matched by an anonymous donor. Others were told that the match would kick in only if a target percentage of donors committed to a recurring donation.
GlobalGiving received its highest level of conversion to recurring donations using a condition of 75 percent. On average, donors then continued their regular contributions for more than a year — raising donations more than tenfold for the charities featured on the site. After the match, that meant a 66 percent increase in revenue from recurrent donors — $7.3 million over five years.
Field experimentation is a valuable way to develop new approaches that can lead to palpable philanthropic impact.
The preceding is adapted from Darden Professor Lalin Anik and Case Writer Laura Steenburgh’s article “A Holy Grail for Fundraisers? Donors Who Keep On Giving,” which appeared in the 2 July 2017 issue of The Washington Post as part of the Darden School of Business/Washington Post “Case in Point” series.”
The article is based on the case GlobalGiving (Darden Business Publishing), by Lalin Anik, Thomas J. Steenburgh and Laura Steenburgh.