Friday, June 3, 2016

Quick Quiz: Who is Most Likely to Give You $5000?

Quiz question: Who is most likely to donate $5000?

Picture this scenario. We have two donors. 

Donor A

Kate (and her husband, Clarke).  In their mid 40's, with two kids.

They donate automatically every month through their credit card.  They sponsor two children, costing them about $1,200 per annum. They've done so for three years. 

Two or three times a year their own kids swap letters with the sponsored children.  They also get regular progress reports on the sponsored children, their families and local community.

Donor B

Margaret, in her late 60's.

She has donated three times in the last four years. Each time was $1,000 in response to direct mail. No donation in year three, but her most recent gift was about nine months ago.

No other correspondence, except for she received a thank you call from our CEO after the most recent $1,000 donation. This is when we started trying to call such donors to say thanks.  She said she liked the work the charity was doing and to '…keep up the good work.'  No other communications.

The ask

We have a mid value donor program, which for us, is trying to raise $100,000 from about 100 people, aiming for an average donation of $5,000.

We only have the resources to follow up 100 donors and have decided to visit them at their home.  But which donor is most likely to give us $5,000 if we ask?

For a little more context, we know the average five-year-value of a monthly giver who is also a child sponsorship donor is around $2,000. Our average five-year-value of a direct mail donor is about $400.  

So Kate and Clarke, as well as Margaret, are already telling us they are 'better than average' by beating that average soundly within just three years. 

The charts below show average values of donors by 'type,' focusing on how they were acquired in the first place. You can see we are already at the top end with our five-year average.

Five-year value of face to face acquired regular donors. From Pareto Fundraising Benchmarking 2016.

Five year value of cash donors. From Pareto Fundraising Benchmarking 2016.

Cash gifts over $1000 by age. From Pareto Fundraising Benchmarking 2016.

Who is most likely to give us $5,000?

The answer seems obvious.  Surely Kate and Clarke?  They give more, are more reliable and they correspond with their sponsored children.  They seem more committed – more involved.

But on the other hand, they are younger than Margaret and probably arrived at the cost of sponsoring through a discussion process and most likely budgeted for it.  They are likely giving what they think they can afford.

Also, they are likely have less disposable income because of a mortgage, school fees etc. 

Margaret, however, is likely to not have these things and she donated a grand without an intimate relationship.

I would love to speak to them both, but I haven’t the resources.  So I am going to focus on Margaret.
Margaret is most likely to give me a larger one-off gift.

Even without my theorising about budgeting process, mortgages and school fees I would still go for Margaret.  It is her age that seals the deal for me.

The plan

My plan would be to send Margaret a great high value direct mail piece, and am also keen on following her up with a personal visit.

Quiz answer

In reality, you don’t know.  But you have limited resources.

With these limited resources, I would be using my high value cash techniques (direct mail, phone and personal visit) on people like Margaret.  Only when I have tried all the Margaret's, or have budget to spare, would I be aiming for big cash gifts from the Clarke's and Kate's.

Interested in more explosive tips like this one?

Watch the recording of my webinar with Tom Ahern:'Release the Explosive Generosity LockedInside Your $100+ Donors ... With These Proven Direct Mail Secrets.'


No comments:

Disaster Fundraising Guide download it here