Changing Environments

Across the direct response fundraising industry, nonprofit organizations experienced a “pandemic bump” of revenue and gifts during 2020 and 2021 and then spent much of 2022 experiencing declines in revenue. In many cases, that decline was caused by lower response rates.

This was the case for a large, nationwide MWD client in their direct mail program.

With donors lapsing in their giving, we asked ourselves what we could do to keep these supporters active, even if it meant retaining them at a slightly lower gift level.

As we all know, one of the most tried and true ways to raise response rate is by lowering the ask array.

But how low do you go? Where’s the line?

Taking a Risk

Most fundraising programs rely on a “control” ask string, which is likely tested countless times. For many organizations, that ask string is built on the donor’s highest previous contribution (HPC), with the hope that they will be so motivated and called to action that they will give a gift of *at least* their highest previous contribution, maybe more. And it makes sense — when you’re trying to raise as much money as possible, why ask a donor for an amount lower than they have given in the past?

But for many donors, 2020 and 2021 were extraordinary giving years. They gave gifts beyond what they normally would — spurred into action by a global pandemic, wars, unprecedented natural disasters, civil unrest, and an especially frightening political environment in the United States.

We felt it was imperative to find the gift level donors felt most comfortable giving at in this new environment. And that we could help usher donors to the place we already saw them heading — giving smaller, more frequent gifts. This outcome could increase retention, donor value, and immediate revenue.

But how do we know what gift level is most comfortable for our donors? Maybe it’s right there in their giving history — in the gift amount they have made most often — also known as their modal gift. We decided to test it.

First Things First: Ground Rules

To execute a modal ask string test like we did, you first must decide what your ground rules are, asking which donors qualify as having a modal gift amount.

For example, your brand-new donors, who have only ever given one gift, would be receiving the same ask no matter how you build your ask string because they’ve only made one gift.

But for donors who have given multiple gifts, what timeframe do we want to look at? And how many gifts are enough?

With the hope of creating as large a pool of qualified donors as possible, we looked at donors who had given to our client in the past 0–24 months and who had given at least three gifts in the last five years. We found that 62% of the donors giving under $499.99 qualified.

After segmenting out the donors who did not qualify for the modal ask, we split the modal-qualifying donors into head-to-head control and test groups. The control group received the control ask string: $HPC, $HPCx1.5, and $HPCx2. The test group received the modal ask string: $Modal, $Modalx1.5, and $Modalx2.

Results

With a statistically significant increase in response at a 99% confidence level, we found that the test group who was served the ask string built off the donor’s modal gift amount had an 18% higher response rate, and yet only an 11% lower average gift. This resulted in 6% more net revenue!

Six months later a retest was conducted to the same audience with similar results: the modal ask resulted in a 13% higher response rate and an 11% lower average gift, resulting in 2% more in net revenue (again a statistically significant increase in response rate at 99% confidence)!

With our goal of retaining as many donors are possible, we were extremely pleased by this result.

Based on these results, we’re rolling out a modal ask for the under $500 giving group to raise more money and boost response and retention.

Donors are constantly giving us insight into what they are thinking by what they are *doing*. For this program—and due to the current environment—the gift amount that donors have given most frequently is the gift amount they are most comfortable giving again. So, by serving donors ask strings built off their most repetitive giving amount we can show them that we are meeting them where they are financially right now.  

About the author: Melanie Smith is a Senior Account Executive at Mal Warwick Donordigital. She has twelve years of fundraising experience specializing in political and advocacy causes. When she's not helping progressive nonprofits raise money, she enjoys cheering for the Buffalo Bills, reading mystery novels, and spending time with her dog and two cats.