The church has long been a pillar of support for persons of all faiths to call on in times of hardship. In addition to spiritual development, churches often provide food, clothing, bill payment assistance, and counseling to parishioners who have fallen on hard times. Churches have traditionally financed these services through donations at the collection plate, capital campaigns, and other church fundraisers like bake sales and raffles. But now, with so many people out of work, churches are finding themselves squeezed at both ends: church collections are decreasing, while the need for church services is increasing.
Fortunately, churches can turn the tide against the recession, stabilize donations, and set the stage for increasing contributions through a simple, commonly used marketing method: RFM. RFM (which stands for Recency, Frequency, Monetary) is a formula commonly used in direct mail marketing and is especially popular in nonprofit marketing. Basically RFM is predicated on three principles:
- Someone who has donated recently is likelier than someone who has donated sometime ago to give again in the near future;
- Someone who donates often (frequency) is more likely to continue donating; and
- Someone who donates a lot (monetary) is more likely than someone who gives less to donate again.
With just the giving history of their congregants, churches can identify ways to:
- Increase the average amount their parishioners give;
- Increase how frequently they give; and
- Revive donations from donors who have ceased to give.
Increasing the average donation amount
Obviously, one strategy churches can employ to increase donations at the collection plate is to entice their regular donors to give more than they presently do. Nonprofits such as colleges and universities, foundations, and other charities have mastered this tactic by establishing “clubs” – providing donors different levels of recognition and treatment based on their contribution levels. For example, a church might print the names of all members who have donated at least $500 during the past 12 months in their bulletin. However, parishioners who have given $1,500 or more might be in a different club, where they not only have their names published, but also get invited to brief events to hear advance news on church initiatives. Still, people who give $2,500 or more might receive other forms of donor appreciation.
The “club” tactic is often effective in enticing parishioners to increase their contributions, as recognition and feelings of contribution and inclusion often motivate them to give. Churches might start by sorting their parishioners by the total amount of money they gave in the last 12 months, and tailoring their marketing efforts based on the donation level. So, if the church has a parishioner who gives $100 per month, it might encourage the parishioner to give $125 per month by inviting him/her to be part of a “Supporters Club,” which is comprised of those parishioners who give $1,500 during a 12-month period. By stressing the benefits of being in the “Supporters Club,” the church can increase the likelihood the parishioner will increase his/her offering.
Increasing the frequency of donations
Imagine having two parishioners who each give the church $1,200 per year. Are they worth the same to the church? Not necessarily! If one parishioner gives the church a monthly donation of $100 and the other an annual lump sum of $1,200, the former parishioner is more valuable! Why? Because people are more likely to give small gifts more frequently than one-time large gifts. Also, the one giving a small gift each month is more likely to have established a routine, or habit, of giving. The one who gives $1,200 in one lump sum is more likely to lapse, especially if he or she gets hit with an extraordinary expense in the month he/she normally makes that donation.
Churches should sort their members by how frequently they give and identify how much they gave in the last 12 months. Then the church should try to encourage more frequent giving among those who don’t give as regularly. If the church notices that a parishioner gives $100 every two weeks ($2,600 per year), they might send an appeal asking him/her to give $60 per week. The club concept can also be employed here. If the church can convert that parishioner to giving weekly, it can increase the parishioner’s annual gift to $3,120!
Reviving gifts from lapsed donors
Next, churches should look at the recency of their members’ donations, sorting them by when they last gave. Parishioners who have ceased to give in the last 18 months might have been impacted by the recession. Churches can these parishioners personal letters informing them of church services available to them, such as bill payment assistance, food banks, job referral services, etc. If positioned correctly, the church can benefit in three ways: 1) earned recognition by letting parishioners know that the church is looking out for their well-being, 2) setting the stage for these persons to start donating again once they get back on their feet, and 3) reviving donations from parishioners who’ve lapsed for reasons other than hardship by informing them of the services their donations pay for.
That last benefit can be expanded. For parishioners who have ceased to give for other reasons, a “win back” appeal can be conceived. Churches can send a letter to these parishioners requesting a small gift. The church can then work towards rebuilding its relationship with the donors who respond to the appeal, and work towards graduating them to higher giving levels.
Although churches should embrace such marketing methods to increase donations at the collection plate, their efforts will be futile if they do not communicate the value or benefit their parishioners will receive by giving more. Most people don’t buy an item at the store if they don’t see how the product will benefit them. The same applies to charitable giving. If parishioners don’t see how their donations are being used – or feel some psychological benefit of giving – they won’t give. In its appeals, the church should not only state the services parishioners’ donations pay for, but also how many people were helped, how much was given to a cause, how the community benefited, and so on.
Churches can minimize the recession’s impact on their donations by employing a marketing tactic like RFM. By increasing both the amount and frequency parishioners give, reactivating lapsed donations, and stressing the benefits of the services they provide, churches can begin to reverse the economy’s squeeze on their bottom lines.