When millions of shoppers canceled their credit cards following the December 2013 breach of retailer Target’s customer data, some nonprofits took a hit in their monthly-giving programs.
Many organizations process recurring donations by charging the donor’s credit card each month, but when cards are canceled or expire, the gifts stop.
“It’s a huge issue in monthly giving programs,” says Anne Ibach, director of membership at Oregon Public Broadcasting, which has roughly 30,000 monthly donors, or sustainers.
Before the Target data breach, the organization would see 250 to 300 cards declined every month. That number jumped to about 1,200 credit cards being declined each month following news of the compromised cards. Since then, it’s fallen back to 500 to 600 cards declined each month.
To try to cut those numbers, the nonprofit made changes to its program and started a campaign to encourage monthly donors to direct payments through their bank accounts, not their credit cards. The process is called electronic funds transfer, or EFT.
Oregon Public Broadcasting kicked off the effort in May 2014 with a new online form that monthly donors can use to update their payment information and their monthly contributions. During the first month, 332 donors used the online form to change their payment method, the amount they gave, or both, with 18 percent increasing their monthly gift.
The group’s online payment form also now defaults to the EFT payment method, which is marked with the message: “Easy for you. Best for OPB!”
The organization ran a series of radio spots with a similar message. The next month, all sustainers received a letter urging them to convert to EFT payments.
“We are putting a lot of emphasis on EFT,” Ms. Ibach says.
A little more than eight months into the campaign, about 48 percent of the group’s monthly donors gave through EFT—about 8 percent more than in early 2014. Those donors tend to have much higher retention rates than donors who give via credit card, says Ms. Ibach.
The organization has set up a process to encourage donors whose credit cards were declined to update their information—and switch to EFT:
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Sustainers whose cards were declined in the previous week get an email that includes a link to update their payment information and a pitch to convert to EFT payments.
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Monthly donors who don’t respond to the first email get another one with a similar message.
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People who don’t respond to the email messages get a letter and a telemarketing call a month later. (The nonprofit is in the process of changing this, so that donors will get the call within a week of when their card is declined, rather than at the end of the month.)
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After another month, supporters who haven’t responded to previous efforts receive another letter.
The organization is keeping an eye on both donor retention and revenue retention as indicators of this effort’s success, says Ms. Ibach. Overall donor retention is currently around 74 percent—about an 8 percent jump from 2011. Revenue retention has gone from about 76 percent to more than 88 percent in that same time period.
“We can see clearly that we’re retaining more donors and more revenue each year,” she says. “That’s a beautiful thing.”
By the Numbers
Number of members (donors who give between $1 and $1-million a year): 124,700
Amount raised annually from members: about $13.5-million
Number of sustaining members, or donors who give monthly: 34,000
Percent of revenue raised from sustaining members who give less than $1,000 per month: 31 percent, or almost $4.2-million annually
Amount donated monthly by sustainers who give in installments of less than $1,000: about $500,000
Number of sustaining members who give more than $1,000 each month: about 500
Percent of sustainers who give through EFT: about 45 percent
Amount spent to maintain sustainer program: around $235,000
