For the first time, we exhibited at the International Congress on Fundraising, held around this time of year near Amsterdam, Netherlands. This year they had record breaking attendance, and it was fantastic to get a world view of fundraising that’s different from our own.
For example, person to person is BIG in Europe. It works like this: charities hire 18-25 year old solicitors with good looks, put them in uniform, and have them patrol the downtown area of major European cities, especially in the UK and Scandinavian countries. In fact, people now have a word for it- they call them “Chuggers“, as in Charity Muggers!
Despite what they are called, the programs are indeed successful. It’s my understanding an average Chugger will sign up a new donor once per hour. In addition, they don’t ask for a one time gift- oh no, they are going much higher. They are actually able to persuade strangers to sign up for a monthly giving program, with an average monthly gift of $10 US.
As one can expect, attrition rates can be high- but they are actually very comparable to traditional pledge non-electronic programs and averages about 15-20% / year (Meaning the renewal rate is about 80-85%).
However, once a donor lasts into the second year, then their behavior matches that of a more reliable donor, and the attrition rate drops into the single digits.
Recurring revenue is critical for any organization, and it’s one of the main reasons why these programs (at least from the non profit’s perspective) are very popular. While ‘Chugger’ fundraising hasn’t taken off in the US (and it might never), monthly giving programs can still be established through traditional solicitation requests, including direct mail and on-line fundraising.
In these uncertain economic times, organizations that rely on this type of recurring revenue certainly sleep easier at night as they know, with laser like precision, their future revenue stream.