It's All in the Ask: How Personalizing Amounts Can Increase Gifts

Background

Welcome Hall Mission opened its doors in 1892 to Montrealers looking for care, guidance, and support. Today, they provide a wealth of services ranging from food banks and housing to dental care and employment training. They achieved these amazing feats only through the loyal support of their partners and donors.

As Welcome Hall Mission seeks to meet the needs of a growing community, the consistent call for growth inspires us here at Frontier, as their direct mail fundraising team. We are always looking to push the limits of what we can achieve for our clients. What makes Frontier so uniquely effective is our crew of experts that specialize in multiple areas of fundraising.

Charitable organizations generally record their donor base in some way, but not every charity can analyze what makes those donors give. That’s why we have an in-house data specialist who is passionate about crunching numbers and making improvements wherever possible.

The Question

Thousands of donors give generously to Welcome Hall Mission every year, but why do they give the amounts they do, and would they be giving more if we asked for more? When we set ask amounts, how do we know if we’ll “over ask” and scare off potential donors or “under ask” and miss an opportunity?

It’s questions like these that lead us to hypothesize about new potential ask strategies.   

Previously, we sorted donors into segments using the recency, frequency, monetary-value algorithm (RFM). Once segments were determined, another algorithm set the ask amounts for each grouping. Our data specialist then manually adjusted those results to take into account the psychological factors that the algorithm may have overlooked.

Setting an ask amount is not an exact science. These amounts can be determined by multiple variables. We consider the following metrics:

• the average contribution

• the median contribution

• the most common contribution

• the highest previous contribution

• the most recent contribution

• the minimum contribution

Tweaking ask amounts often causes a seesaw effect between response rate and average donation. Asking for too much can mean fewer donations overall, but asking for too little can mean smaller gifts. Segmentation helps determine the appropriate ask for groupings of people but creates a one-size-fits-all approach per group.

The Test

With groupings of donors, it’s unavoidable that some recipients receive ask amounts outside of their comfort zone. There is always an open ask included, where donors can fill out an amount themselves; however, research has shown that ask amounts can either influence gift size or discourage gift giving altogether. This means that ask amounts wield the power of suggestion, which can be very useful to an NPO’s bottom line. So, is there a way to avoid playing the odds and tailor our asks to each individual donor? Enter, the test.

We concentrated on 3,000 donors from Welcome Hall Mission’s 2018 Easter appeal as a sample size. The control group, along with each of the 2 test groups contained volumes of 1,000 people.

• The 1st test group retained the segmentation but based the ask amounts on the median contribution for each donor segment.

• The 2nd test group removed segments entirely and provided each recipient with a set of personalized ask (or Bespoke Ask) ask amounts based on their most recent contribution.

The Results

When the results came in, we noticed a few things. Firstly, our test proved previous theories to be true: the group of median-based donors performed better on the response rate, but worse on the average gift than our control group. Secondly, we found that most grassroots donors gave more when their ask amounts were personalized to their specific donation history.

One detail stood out among the rest. Not only did the Bespoke Ask amounts achieve the highest average gift, but they also maintained a higher response rate than the control group! Our data specialist attributes a large part of this breakthrough to the psychology of suggestion, which cannot be utilized as effectively when working with fixed ask amounts or generalized segmentation across a broad donor base.

What do all these numbers mean for Welcome Hall Mission? This new strategy of customizing amounts to individual donors produced an increase of approximately 15% in revenue for the Mission! And as you know, a few dollars more from thousands of potential donors adds up to make a significant impact on the Montrealers being served.

Next Steps

A hypothesis is only as good as its method. To confirm that it’s worth the time and effort to personalize each donor’s ask amounts, we need to continue our research. We’ve adjusted our approach based on other factors in each donor’s specific giving history, focusing on the most recent contribution, median contribution and minimum contribution. By tweaking the data and retesting, we are hoping to repeat and improve our results compared to last year.

Welcome Hall Mission’s 2019 Easter appeals are in the mail, testing further personalized Bespoke Asks. We are also sending out a Mother’s Day appeal with Kelowna’s Gospel Mission to test the same Bespoke Asks. We look forward to seeing how donors respond and can’t wait to report back to you with our plans for refining the strategy and implementing this method for more NPOs. Stay tuned!