‘Tis the season for holiday discounts, a bit of showrooming, bumper-to-bumper shopping mall traffic – and for those of us feeling particularly generous, holiday charitable donations. But according to a recent survey, for every $100 in donations a charity receives, it loses $96 to donor attrition. PYMNTS caught up with two-click online checkout providers @Pay to find out how they’re making moves to combine two-click checkout technology with the most cost-effective fundraising channel, and ultimately reduce the complexities nonprofit organizations face in receiving donations throughout the year.
FIXING THE DONOR ATTRITION PROBLEM
Donor attrition is the non-profit fundraiser’s greatest challenge, according to the 2013 Fundraising Effectiveness Survey Report, a joint study published by the Association of Fundraising Professionals (AFP) and The Urban Institute. Survey results gathered from the 2840 nonprofits that participated indicated that for every $100 in donations gained, $96 was lost due to donation attrition. At the same time, for every 100 donors gained, 105 donors were lost through attrition.
So what’s a nonprofit organization to do? It’s important for them to watch their overall growth-in-giving results carefully, says the AFP, and that means paying close attention to the gains and losses that make up those results. Looking only at the overall net performance, the bottom line, doesn’t accurately show management and boards what’s really happening in fundraising. Significant losses can substantially reduce or even eliminate gains. For example, an organization that gains in annual giving of 65 percent from one year to the next, but then has annual losses of 55 percent, only reaches a net growth-in-giving of 10 percent, says the report.
By reducing losses by 10 percentage points in this example, the net would double – if losses were reduced by 20 percentage points, the net would triple. To do so, the report suggests that nonprofits can take on tactics that their commercial counterparts take on.
Survey results also highlight the fact that it is more expensive to acquire a new customer than to retain an existing one. Much like for organizations on the commercial side, the best customer is a repeat customer.
“For most organizations – especially those that are sustaining losses or achieving only modest net gains in gifts and donors – taking positive steps to reduce donor losses is the least expensive strategy for increasing net fundraising gains,” says the AFP.
WHERE EMAIL CHECKOUT COMES INTO PLAY
According to @Pay, email is the most cost-effective fundraising channel for nonprofit organizations to leverage. Direct mail, on the other hand, is 245 times more expensive than email.
With that in mind, and as consumers increasingly rely on their mobile phones and tablets for just about everything, 2 out of every 3 emails are now read on a mobile device, says MovableInk. However, as reported by SeeWhy, when consumers shop online via a smartphone, they abandon 94 percent of their shopping carts in the final checkout stage.
When it comes to sending online donations, the current process can be compared to a “leaky bucket,” says @Pay. While some online donation revenue is collected, so much of it is lost from the checkout abandonment problem.
An “express checkout” experience can lift online sales by up to 55 percent, says Edgar, Dunn & Co., and according to Just Giving, an “express donation” experience can lift online donations by up to 30 percent. But, as @Pay suggests, a 2-click donation button could serve as THE “express” of all “express donation” options out there.
HOW THE FUNDRAISER’S WEAKEST LINK IS @PAY’S GREATEST STRENGTH
@Pay calls itself “The Email Payment Gateway,” a simple, secure email payment platform that makes buying, paying and donating easier. Donors can give in less than five seconds – directly from a fundraising email with just two clicks and zero keystrokes. There is no need for a checkbook – and donors can stay on their mobile devices to complete the simplified charitable gift-giving process.
Serving New Mexico’s hungry, distributing 26 million pounds of food a year to state food pantries, shelters, group homes, soup kitchens, and more, the Roadrunner Food Bank was one organization that recognized that they could leverage @Pay’s platform. By doing so they successfully increased their donation revenue, and made sending donations easier and more effective in time for the holiday season.
According to the case study, the checkout buttons offered by @Pay to the Roadrunner Food Bank include one for donations, tickets and matching gifts. One in three donors from RFB’s email program donate via 2-click. Almost half of the donations from the email program come in via 2-click, and almost half of donation revenue from the email program can be attributed to the 2-click checkout.
RFB also sees the highest email open rate among repeat donors. @Pay’s platform facilitates and encourages those repeat donations, turning ordinary email into a revenue stream without any set-up cost, monthly service fee or technology purchase, the company says.
“We have found @Pay to be a valuable addition to our fundraising program. Different supporters like to be communicated with in different ways, and more and more, they like donating from a mobile device,” said Stephanie Miller of Roadrunner Food Bank. “Checkout is seamless for donors. I would recommend @Pay for any group that wants to offer a simple option.”
Example of RoadRunner Foodbank’s Fundraisong Email Using @Pay’s “Donate By Email” Platform