“Election Effect” Drives Unprecedented Increase in Recurring Donations
This post is written by Classy Senior Data Scientist Robertson Wang and Data Engineer Michael Jalkio.
You’ve likely read press coverage regarding President Donald Trump’s impact on the fundraising space. For example, the New York Times reported that many nonprofits opposed to President Trump’s policies saw an explosive surge in support right after the election. The Atlantic reported on the same trend, as has GQ, and CNBC.
At different times this has been referred to as a “Trump Bump,” or the concept of “rage giving” or “rage donating.” We’ve observed this trend in our data as well and we refer to this phenomenon as an “election effect.”
We noticed that the impact of the 2016 election wasn’t just isolated to total giving, but rather that the real story behind the election effect is the rise of recurring donors. To illustrate this finding, this post examines the election’s impact on donations, recurring gifts, and different causes.
Election Impact on Donation Amount and Number of Donations
One obvious place to look for an election effect would be the total amount donated right after the election. Below is a plot of daily donation amounts. The y-axis represents total gross transaction volume (GTV).
There’s clearly a bump around the election. However, we see bumps every year around November. If we look instead at the year-over-year growth rate, we don’t actually see significantly different behavior. If there was something special about the 2016 election, we would have seen a large jump.
The election effect did not result in an increase in donations for organizations on Classy’s platform. Donations for the week of the 2016 election were not abnormal when compared to the prior year’s donations. Rather, the bump in November 2016 can be explained by Giving Tuesday. Similar results were found when looking at the number of donations.
Election Impact on Recurring Donors
Recurring donors are invaluable. In fact, our data suggests a recurring donor’s lifetime value is $796. Even better, recurring donors are 75 percent more likely to make an additional one-time gift within a year than one-time donors.
Let’s continue our analysis by plotting the number of weekly new recurring plans. A recurring giving plan is a pledge by a donor to give on a recurring basis—most recurring plans are monthly.
Clearly, there’s a peak. Just by looking at the graph, we can see that most of the increase occurred right after Election Day—before Giving Tuesday. With further analysis, we can safely say that Giving Tuesday did not drive the increase in recurring donors.
We get an even starker picture when we look at the year-over-year growth rate for new recurring plans below. Compared to the plot of year-over-year growth rates for donation amounts, the growth rate of new recurring donors saw an enormous surge.
Election Impact on Different Cause Categories
Let’s zoom in on the types of organizations that most benefited from the election effect by plotting the percentage of newly created recurring plans by NTEE major group for all of 2016. In the below plot we’ve only included the top three groups that saw the highest number of recurring donors per week for 2016.
Organizations in the civil rights category benefited from the election effect. Specifically, we found that an organization supporting the LGBTQ community had 31.2 percent of total newly created recurring plans and another civil rights organization had 21.3 percent of total newly created recurring plans for the week following the election. This indicates that the bump in recurring plans was driven by specific groups of donors rather than all donors being more motivated.
To understand why this category had so many new recurring plans, let’s focus on how the election effect impacted two anonymous organizations.
The line for the civil rights organization is particularly interesting because it shows four distinct peaks (in order):
- The day that Philando Castile was killed
- The day of the civil rights protests in Charlotte
- Election day
- Inauguration day
The election effect generated more new recurring donors than the day Philando Castile was killed and significantly more recurring donors than the protests in Charlotte.
Donors were especially motivated right after the election: they were more likely to donate after visiting campaign pages for these two organizations. For both the organization supporting the LGBTQ community and the civil rights organization, the election effect pushed up conversion rates immediately following the election up until inauguration day.
Election Effect Recurring Donors vs. Typical Week Recurring Donors
People were not only more likely to sign up to be recurring donors during election week, they were more likely to stick around longer and to donate more. In fact, our analysis revealed that recurring donors that signed up during election week were more likely to stick around for the next 18 months than recurring donors that signed up during a typical week in 2016. This means that recurring donors that signed up during election week had greater expected value than recurring donors that signed up during a typical week.
Results for the civil rights organization were even more striking: recurring donors that signed up during election week were over 50 percent more likely to keep donating 18 months down the road than recurring donors that signed up during a typical week in 2016. This means that the expected value of recurring donors that signed up during election week was more than three times the expected value of recurring donors that signed up during a typical week in 2016.
- While past reports on fundraising after the 2016 Election found that people donated more, and more often, we found that it led to an unprecedented increase in recurring donors for certain organizations
- Organizations should be ready for surges of supporter enthusiasm with recurring giving programs
- Recurring donors who signed up during the time surrounding the election were more valuable long-term than recurring donors who signed up during a typical week
We found that total donations and total transactions did not immediately increase as a result of the 2016 Election, but recurring donors did. This shows that charged political climates can be a key opportunity for organizations because, if they can convert donors when they are most motivated, they will continue to see greater than normal value from these donors for a long time. Not all organizations will be impacted by major news stories, but organizations without a well-established recurring giving program will find themselves unable to maximize how they capitalize on the opportunity.
A Nonprofit's Guide to Recurring Giving
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