The Role of Sustainer Giving in The Generosity Crisis
The most recent episode of the Purpose & Profit Podcast features a conversation with Nathan Chappell, co-author of a catalytic book that anyone passionate about causes and the state of philanthropy in the United States should read.
The book is called The Generosity Crisis: The Case for Radical Connection to Solve Humanity's Greatest Challenges, and we discuss it in this latest episode:
Purpose & Profit Podcast | Season 4, Episode 2
The Generosity Crisis and Unleashing Radical Connection
This episode covers everything from The Generosity Crisis to unleashing radical connection, moving from heart to wallet, and how artificial intelligence is transforming the nonprofit world.
In The Generosity Crisis, Chappell and his co-authors Brian Crimmins and Michael Ashley make a convincing case for the decline of American generosity. They also propose that part of the solution is to cultivate radical connection, or the connection between individuals and value-driven organizations that strive to improve life on Earth.
💡 Takeaway: The Generosity Crisis is real, and it is reshaping the landscape of philanthropy. If you care about the role of individual acts of generosity in society to make the world a better place, this book is an alarming wake-up call.
The book is a call to action. The question is, what are we going to do? What are you going to do? What am I going to do?
The Role of Sustainer Giving in Addressing the Generosity Crisis
Listening back to our conversation with Nathan, I couldn’t help but reflect on the potential for sustainer giving in the subscription economy as one tool in our belt as charity leaders and compassionate donors to address the Generosity Crisis.
Amidst the torrent of discouraging headlines over the past couple of years, recurring sustainer giving has been a consistent bright spot, countering the decline in single-gift donors, lower retention, higher churn, and higher acquisition and cultivation costs.
This trend that has been reshaping recurring donor behavior, which I call Subscription Giving, is one of the most significant opportunities available to charity leaders and those passionate about addressing the Generosity Crisis.
I was honored to give the opening keynote at the DMAW’s Sustainer Day in Washington D.C. this week. The event included some of the most seasoned and dedicated leaders driving hundreds of millions of dollars of sustainer giving to causes that matter.
Above: Speaking about how the subscription economy has transformed monthly giving and made a new kind of sustainer program possible, which I call “Benevolence”.
The talk was called The Future of Sustainable Giving in the Subscription Economy, and it makes the case that we have entered a new era of sustainable fundraising, driven by shifts in donor behavior in light of the Subscription Economy.
💡 Takeaway: Sustainable monthly Subscription Giving is a vital part of the solution to the Generosity Crisis and is accessible to more charities than ever before.
In light of this opportunity, let’s look at a critical insight from the Subscription Economy that nonprofit leaders can apply to create a resilient stream of Subscription Giving income.
Subscription Giving Requires an Ongoing Value Proposition
One of the most important lessons from the world of paid subscriptions is that a subscription requires a value proposition that is ongoing. Otherwise, why subscribe?
Subscriptions that offer a poor ongoing value proposition are destined to tread the turbulent waters of churn.
In today’s Subscription Economy, consumers quickly drop or add subscriptions if they are not providing ongoing value.
The 2023 Subscription Commerce Industry Outlook study found that while 95.8% of all U.S. Adults have at least one subscription, consumers are more discerning about which subscriptions they have. They are more readily willing to cancel subscriptions that do not provide ongoing value or switch to competitors with a better value proposition.
52.6% of U.S. Adults canceled a streaming service subscription in 2023. Take that in for a second. Over half of Americans were ready and willing to drop a streaming subscription if it didn’t provide ongoing value.
At the same time, 59.8% of U.S. Adults added a subscription to a streaming service. In other words, subscriptions are much more volatile in the consumer world. It’s all about providing ongoing value.
Above: Consumers are ready and willing to cancel subscriptions that don’t add value and are just as likely to add them. It’s all about the ongoing value proposition.
Thankfully, individuals have proven to be more loyal donors than consumers. If you are a nonprofit, your Subscription Giving donors should be more resilient than the typical consumer subscription.
But the reality is that people are more willing to drop or add monthly commitments than ever before, conditioned by the Subscription Economy.
💡 Takeaway: Subscribers are more ready and willing to drop and add subscriptions than ever before. Keeping subscribers – like keeping donors – is about providing ongoing value.
Crafting a Subscription Giving Value Proposition
Like a good subscription offer needs to make sense to a customer month in and month out, recurring Subscription Giving requires an ongoing value proposition.
Recurring giving has to be justified differently than one-time giving. Committing to giving on a recurring basis is a different kind of decision than making a one-off gift, which can be an impulse or a response to a momentary need. By contrast, monthly giving is an ongoing commitment.
When crafting a value proposition for fundraising, NextAfter is one of the best at this. NextAfter, a digital fundraising research lab, digital-first agency, and a training institute, has conducted thousands of tests over more than a decade.
Nathan Hill, Vice President of the NextAfter Institute, writes, “A strong value proposition clearly articulates to your donors exactly why they should give to your organization rather than some other organization, or at all.”
Using this framework as a starting point, we must tailor the value proposition for ongoing sustaining giving.
Let’s conclude with three key insights to tailor your recurring giving offer for ongoing value.
Don’t Assume your Best One-time Donation Ask is the Best Ask for Recurring Giving
A common mistake organizations make with recurring giving programs is to take their best-performing one-time gift offer and just ask for “12 of those a year, please.”
The most compelling ask for someone to give a single impulse gift may not be nearly as motivational as an ongoing recurring ask.
For example, the first-ever monthly giving program I worked on was nearly twenty years ago for Union Rescue Mission in Los Angeles—the oldest rescue mission in L.A. and one of the largest in the United States. When I started, the sustainer program was based on the idea of providing a “meal a day.” After all, providing meals and shelter was the best-performing single-gift offer in fundraising for the mission.
After struggling to grow the program and suffering from low fulfillment rates, we reimagined the program as a representative child and family sponsorship program. Your monthly gift helped provide essential services for the many women, children, and families that the mission was serving on an ongoing basis.
The reality was that despite the prevailing belief in the “old white man” homeless stereotype, about half of all the guests that the mission served were women, children, and families.
As a monthly donor, your commitment provided desperately needed services to get these women and children not only off the streets but away from Skid Row, one of the most dangerous places in the country.
After reimagining the program, fulfillment rates jumped by more than 20%, and the program immediately started to grow.
💡 Takeaway: The best recurring giving asks represent a value proposition that makes sense on an ongoing basis. That value proposition rarely is the same as the best one-time donation ask.
Describe the Need in Terms of Survival and Safety
Are you familiar with the classic Maslow’s Hierarchy of Needs? First proposed by American psychologist Abraham Maslow in 1943, the psychologist proposed that all human needs can be categorized at various stages, with “lower level” needs representing physiological or survival needs, then safety needs, then love and belonging, esteem, and finally, at the highest level, self-actualization.
Maslow argued that if an individual’s more basic, lower-level needs aren’t met, they can’t get to the higher levels of functioning. If you are starving, it’s unlikely you will be too worried about your close relationships or being the best human you can be.
In fundraising, particularly at larger scales, the lower down on Maslow’s Hierarchy you can articulate needs in terms of survival, safety, and belonging, the more likely donors will respond.
So, when articulating an ongoing need for your sustainer program, look for ways to describe what you are doing in terms of survival, safety, and belonging. If you aren’t able to do the work, what are the risks to the well-being of those who you serve?
💡 Takeaway: As humans, we resonate with basic human needs – survival, safety, love, and belonging. Look for ways to articulate your ongoing needs in terms of the lower-level needs of survival, safety, and belonging.
Cultivate a Connection with Human Need
Sustainer fundraising is most successful when it cultivates a human connection with need. At Union Rescue Mission, when we shifted the focus from inanimate meals to living, breathing human beings, we saw immediate increases in fulfillment, participation, and income to serve those individuals.
Subscription giving can also be a powerful way to cultivate a human connection with donors. The better we understand our potential donors’ beliefs and motivations and can meet their needs, the more they will resonate, respond, and engage, in turn being transformed themselves.
💡 Takeaway: Cultivating a human connection to human needs is a key way to build a program that resonates with donors and results in long-term relationships and transformation.
The Generosity Crisis is real. Nathan Chappell and his co-authors captured it well, and it was a blessing to interview him for the podcast. Now, we need the collective philanthropic sector to step up – and that includes you and me!
I would encourage you to listen to the episode, The Generosity Crisis and Unleashing Radical Connection. We had a great time recording it – I hope you enjoy listening to it!
Until next week… Surfs Up! 🌊
- Dave
About the Author | Dave Raley
Consultant, speaker, and writer Dave Raley is the founder of Imago Consulting, a firm that helps non-profits and businesses create profitable growth through sustainable innovation. He’s the author of a weekly trendspotting report called The Wave Report, and the co-founder of the Purpose & Profit Podcast — a show about the ideas at the intersection of nonprofit causes and for-profit brands.
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