5 Behavioral Science Theories to Convert One-Time Donors to Recurring Donors

The following is a guest post by Creative Science, a digital agency that aligns behavioral science with design and technology to help companies rethink the way they engage with people. Learn more at www.creativescience.co.


The average nonprofit only retains 21% of their donor base year over year.

The term LTV (lifetime value) of a customer is often talked about in the for-profit space but can often be overlooked in the social good space. This is a critical KPI (key performance indicator) to track in order to build a successful nonprofit and speaks to the underlying sustainable health of your donor base. The LTV of a donor is simply the amount of money given over the lifetime of the donor.

In contrast, CAC (customer acquisition cost) is the cost to acquire a donor. The LTV needs to be higher than the CAC or you are losing money on every donor you acquire. There are two ways to increase donor margins; either decrease your CAC or increase your LTV.

Today we’re going to look at increasing the LTV of your donor base. Specifically, focusing on converting one-time donors to recurring donors (rather than finding new donors every year).

Recurring donors give on average 42% more over a year than one-time donors. Typically recurring donor programs enjoy retention rates of over 80% in year one and 95% after 5 years. This has a strong compounding effect and a great way to build sustainability into your social good organization.

So, how do you successfully convert one-time donors to recurring donors?

It starts with understanding five key theories from behavioral science, the study of how humans make decisions.

1. Certainty Bias

Assuring potential supporters that their support will have a certain effect will make your nonprofit more appealing than other nonprofits in which the impact of the donor’s contribution is probable, but not certain.

Screenshot of a donation page

Donation landing page showcasing exactly what each donation provides.

Studies show donors are more likely to give when they understand the impact of their donation. Provide your donors with visibility into how their money will be spent and the impact it is making. Even if you cannot directly relate, it is critical you do provide some visibility into these metrics.

2. Anchoring

Anchoring refers to the cognitive bias to use another number (even if unrelated) as reference for a decision. Provide donors with a reference point of how much they should donate.

Sample donation page

You can do this by referencing that specific donor’s previous donation amount or by referencing the donation amount of a random previous donor.

3. Default Bias

Make it easy. Humans have a cognitive bias to default to the path of least resistance.

sample donation page

If you’re sending a recurring donor to a donation form, don’t provide the option to donate once. Have ‘monthly’ donation select as the default with a default donation amount selected. Ensure your donation forms are mobile optimized. There is a high chance that a donor will experience your donation processing on a mobile device and if it’s too much work they won’t complete the process.

4. Hyperbolic Discounting

Humans tend to discount the future, we prefer smaller rewards now rather than larger rewards at a later date. Would you prefer $20 today or $30 in six months?

You can use this to your advantage by asking donors to pledge to a larger donation amount in the future. Ask donors to commit to just a $1 a month today with a pledge to increase their monthly donation to $5 six months in the future.

5. Reciprocity Effect

If you subscribed to the Economist and stopped receiving your monthly magazine, what would you do? You would cancel.

sample donation page on a mobile phone

The same holds true with a recurring giving program. It is critical to provide updates at least monthly to donors so they are reminded of the impact their giving is making. This can be a simple email update or even an SMS text notification.

95% of all our thoughts, emotions and learning occur before we are even aware of it. Integrating these behavioral science theories into your monthly giving program will allow you to work with the human mind rather than against it.

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TechNow 2018 Conference Registration closes Sept. 28!

TechNow: A technology conference for nonprofitsAbout TechNow

Join us on Wednesday, October 3, 2018, for the 15th anniversary of the TechNow Conference, organized by The Bayer Center for Nonprofit Management at Robert Morris University. Anyone who has an interest or stake in their nonprofit’s technology management or usage is encouraged to attend.  TechNow has something for everyone!

TechNow 2018 will be held at the DoubleTree by Hilton Hotel in Monroeville, Pennsylvania.

Registration opened July 1. Visit the conference website, www.technowconference.org, for more information.

Registration Fees

This year, thanks to Microsoft sponsorship assistance, we are able to offer nonprofit organizations tiered, budget-based pricing for TechNow registration:

  • Nonprofits (Based on annual budget)
    • Under $500,000: $25/person
    • $500,001 – 2,000,000: $50/person
    • $2,000,001 – 5,000,000: $75/person
    • $5,000,001 and up: $100/person
  • For-profit companies and independent consultants: $200/person
  • University and college students: $25/person

Learn more and register at: http://technowconference.org/registration/.


Headline sponsor

Microsoft

About Lucy Bernholz, Ph.D. – Our 2018 TechNow Conference Keynote

For this year’s TechNow conference keynote speaker, we are delighted to feature Lucy Bernholz from Stanford University! Among her many duties and projects there, Lucy annually writes a report called the Blueprint, in which she makes (pretty doggone accurate) predictions for the coming year on technology, philanthropy and digital civil society.

You can download her 2018 Blueprint for free here. Lucy is expecting to have her 2019 Blueprint drafted by the date of the conference and we are looking forward to hearing a preview of her predictions for the coming year!

Learn more about TechNow and register at www.technowconference.org. Thanks to Microsoft sponsorship assistance this year, we are able to offer affordable, tiered registration fees for nonprofit organizations.

Lucy Bernholz, Ph.D.
Senior Research Scholar, Stanford University

Lucy Bernholz

Bernholz is a Senior Research Scholar at Stanford University’s Center on Philanthropy and Civil Society and Director of the Digital Civil Society Lab. She has been a Visiting Scholar at The David and Lucile Packard Foundation, and a Fellow at the Rockefeller Foundation’s Bellagio Center, the Hybrid Reality Institute, and the New America Foundation. She is the author of numerous articles and books, including the annual Blueprint Series on Philanthropy and the Social Economy, the 2010 publication Disrupting Philanthropy, and her 2004 book Creating Philanthropic Capital Markets: The Deliberate Evolution. She is a co-editor of Philanthropy in Democratic Societies, published in 2016 by the University of Chicago Press. She writes extensively on philanthropy, technology, and policy on her award winning blog, philanthropy2173.com.

She studied history and has a B.A. from Yale University, where she played field hockey and captained the lacrosse team, and an M.A. and Ph.D. from Stanford University.

Follow Lucy on Twitter: @p2173


Headline sponsor

Microsoft

TechNow 2018 Conference Registration is Open!

TechNow: A technology conference for nonprofitsAbout TechNow

Join us on Wednesday, October 3, 2018, for the 15th anniversary of the TechNow Conference, organized by The Bayer Center for Nonprofit Management at Robert Morris University.  Anyone who has an interest or stake in their nonprofit’s technology management or usage is encouraged to attend.  TechNow has something for everyone!

TechNow 2018 will be held at the DoubleTree by Hilton Hotel in Monroeville, Pennsylvania.

Registration opened July 1. Visit the conference website, www.technowconference.org, for more information.

Registration Fees

This year, thanks to Microsoft sponsorship assistance, we are able to offer nonprofit organizations tiered, budget-based pricing for TechNow registration:

  • Nonprofits (Based on annual budget)
    • Under $500,000: $25/person
    • $500,001 – 2,000,000: $50/person
    • $2,000,001 – 5,000,000: $75/person
    • $5,000,001 and up: $100/person
  • For-profit companies and independent consultants: $200/person
  • University and college students: $25/person

Learn more and register at: http://technowconference.org/registration/.


Headline sponsor

Microsoft

If You Cannot Find a Local Community, DIY It!

By guest author Rebekah Jenkins, Director of Operations, Grow Pittsburgh. For more information about the Peer Operations Network, email Rebekah: rebekah@growpittsburgh.org.


“What you do today can improve all of your tomorrows”
Ralph Marston

I absolutely adore nonprofits. I love how they are mission-driven and are built on serving others. I’ve worked for nonprofits in some capacity for the last 18 years. One thing I’ve noticed, though, is that many of these small organizations are not always fully staffed. Sometimes there’s not enough money for everything and people are forced to wear many hats. This much has been true in the previous positions I’ve held at nonprofits and it is still true in my current role as Director of Operations for Grow Pittsburgh.

Operations work has never been ‘sexy’ but it has always been vital to every organization, no matter the industry. Operations work is needed to keep programs work moving, but the level of support for operations staff never seems to be as accessible as it is for program-centered employees or high-level leadership. For a long time I searched for a support system…a group of individuals who do the same kind of work that I do, and who understand what it means to be a nonprofit operations professional. I had found support for the ‘accidental techie’ in me from the Bagels & Bytes group, sponsored by BCNM, but I was looking for the equivalent for my operations work. I looked around to see if someone else had started such a group – with little success. I searched and asked around and no one had heard of such a thing. Thus the Peer Operations Network was born.

I was really anxious about starting something like this. What if my request went ignored? What if I was the only one who was dealing with these issues? How did everyone else find their support system??

I started by sending messages on LinkedIn and Facebook, two easy and quick ways to reach real people. I figured it was an easy way to organize folks around this topic. When I first sent out the message only a few people responded. One of those people was Robert Young from Simpson McCrady Insurance. He responded with a desire to support this work, after having spent some of his career in nonprofits as well, and offered to help recruit and supply an important need for each of our meetings: FOOD.

Between the two of us we brainstormed and came up with some names and/or organizations that we thought would benefit from these meetings. Slowly, individuals in the area who held the roles of Operations Coordinator all the way up to Chief Operations Officer responded with a desire to hear more from other professionals doing operations work and how they helped their organizations run more efficiently.

We’ve now held several of these monthly meetings and our numbers keep growing! We’ve discussed a variety of topics such as how to pick an auditor, how to handle sensitive documents and best practices for storing documents in the cloud. I’ve learned so much and I find pleasure in knowing that there are other people in the Pittsburgh area who do what I do and have the same needs that I have. I am know thoroughly convinced that having the willingness to step out of your comfort zone any day can improve all of your tomorrows.

TechNow 2018 Conference Registration Opens in 2 Weeks!

TechNow: A technology conference for nonprofitsAbout TechNow

Join us on Wednesday, October 3, 2018, for the 15th anniversary of the TechNow Conference, organized by The Bayer Center for Nonprofit Management at Robert Morris University.  Anyone who has an interest or stake in his or her nonprofit’s technology management or usage is encouraged to attend.  TechNow has something for everyone!

TechNow 2018 will be held at the DoubleTree by Hilton Hotel in Monroeville, Pennsylvania.

Registration opens July 1. Visit the conference website, www.technowconference.org, for more information.


Our Keynote Speaker

Lucy Bernholz, Ph.D.
Senior Research Scholar, Stanford University

Lucy Bernholz

Bernholz is a Senior Research Scholar at Stanford University’s Center on Philanthropy and Civil Society and Director of the Digital Civil Society Lab. She has been a Visiting Scholar at The David and Lucile Packard Foundation, and a Fellow at the Rockefeller Foundation’s Bellagio Center, the Hybrid Reality Institute, and the New America Foundation. She is the author of numerous articles and books, including the annual Blueprint Series on Philanthropy and the Social Economy, the 2010 publication Disrupting Philanthropy, and her 2004 book Creating Philanthropic Capital Markets: The Deliberate Evolution. She is a co-editor of Philanthropy in Democratic Societies, published in 2016 by the University of Chicago Press. She writes extensively on philanthropy, technology, and policy on her award winning blog, philanthropy2173.com.

She studied history and has a B.A. from Yale University, where she played field hockey and captained the lacrosse team, and an M.A. and Ph.D. from Stanford University.

Follow Lucy on Twitter: @p2173


Headline sponsor

Microsoft

NEW at the Bayer Center: Microsoft Summer Bootcamp 2018

MicrosoftAbout the program

Thanks to the generosity of our sponsor, Microsoft Corporation, the Bayer Center is offering a two-day intensive Microsoft product and technology training program FREE of charge to nonprofits in the Pittsburgh region. (A $250 value!)

There are a limited number of seats available. Applications will be accepted through June 30, 2018. We will notify applicants about acceptance in early July 2018.


The program will be held in two separate cohort groups on the following dates:

  • July 25-26, 2018
  • August 22-23, 2018

Applicants must attend both days of one cohort or the other (e.g.. cannot select to attend Day 1 from one cohort date and Day 2 from the other cohort date).

Both program cohorts will be located at:

The Bayer Center for Nonprofit Management at RMU Downtown
339 Sixth Avenue, Suite 750
Pittsburgh, PA 15222

Laptops will be provided for the hands-on instruction portions of the program.

Program Agenda:

Day 1
9 am – 10 am: Getting to Know Windows 10
10 am – 11 am: Microsoft Word 2016 Tips and Tricks
11 am – 12 pm: Fundamentals of PowerPoint 2016
12 pm – 1 pm: LUNCH (please plan to bring brown bag or eat out)
1 pm – 2 pm: Online Safety – What You Need to Know
2 pm – 3 pm: Fundamentals of OneNote 2016
3 pm – 4 pm: Cybersecurity Basics for Nonprofits
Day 2
9 am – 12 pm: Introduction to Microsoft Excel 2016
12 pm – 1 pm: LUNCH (please plan to bring brown bag or eat out)
1 pm – 4 pm: Intermediate Excel 2016

Program Instructors:

Cindy Leonard is Consulting Team Leader at the Bayer Center for Nonprofit Management at Robert Morris University. She manages the consulting program and technology program, working with the consulting team to maximize client satisfaction and identify areas for growth. Her own consulting specialty is helping nonprofits leverage technology to meet their missions. In addition to technology assessments, planning and decision support, she specializes in website development on the WordPress platform and community organizing around nonprofits+technology. She presently serves on the board of the Alliance for Nonprofit Management. She holds a B.S. in computer science, an M.B.A. and a M.Ed. in instructional design technology, all from Seton Hill University.

Gina McGrath is the Technology Director at the YWCA Westmoreland County. In addition to being the network administrator for the organization’s two sites, Gina also manages the YWCA Technology Center, creating the curriculum and class schedules and regularly teaches technology classes to adult learners. She also manages the afterschool YWCA TechGYRLS robotics program, organizes the nonprofit technology meetup group, Bagels & Bytes in Westmoreland County and is an adjunct instructor at Westmoreland County Community College. Gina holds an associate degree in computer science from Westmoreland County Community College and a bachelor of science in business management/information technology from Seton Hill University.

Additional Information:

  • There is no registration fee for this program. (Course value is $250.)
  • Applications will be accepted until June 30, 2018.
  • Only one applicant per organization will be accepted.
  • Preference will be given to organizations with small- to medium-sized annual budgets.
  • Parking, travel and lunch costs are the responsibility of the applicant or the applicant’s organization and will not be reimbursed.
  • If an applicant is accepted to the program and is unable to attend, the organization is responsible for giving the Bayer Center notice 5 days prior to the start date of the program and must send another staff member in the applicant’s place.

How to Apply:

Apply for the program today!

Questions?

Please email Cindy Leonard, leonard@rmu.edu, with any questions you may have about the program.