Monthly giving - why every nonprofit needs it

publication date: May 29, 2012
author/source: Sumac

There is no question that monthly giving works. The success stories are countless and the benefits are huge for both the nonprofit and the donor. That's what Canadian authority Harvey McKinnon argues in Hidden Gold: How Monthly Giving will Build Donor Loyalty, Boost Your Organization's Income, and Increase Financial Stability.

The benefits of implementing a monthly giving program are undeniable. Here are the big ones that McKinnon mentions.

Raise more money

It's a proven fact that monthly donors stay loyal longer. As McKinnon points out, "It takes proactive action from the donor to stop," and it is rare for them to take that action even if the nonprofit messes up.

So while donors who require constant renewal rarely make it past two years, monthly donors keep giving for ten years plus. Also, they tend to give more. Donors who would give $100 per year will give $20 to $30 per month. All of this translates into huge boosts in revenue for non-profits.

Establish predictable income

The benefit of this additional revenue is more than just value; it's predictability. Having guaranteed income each month allows you to better plan and implement programs, marketing and events. Even if you just have a hundred monthly donors, you can count that revenue every month.

Lower administrative costs

Each donor who signs up also gives you the added benefit of lower administrative costs. Because monthly donors give automatically, you don't need to solicit them repeatedly. Because they give longer, you don't need to find as many new donors. That all translates into reduced postage, marketing, and handling costs.

Build better relationships with donors

The long-term benefit of a monthly giving program is that it improves the organization's relationship with the donor. Communication is better because you're not always asking donors for money, says McKinnon. Instead the focus is on "reporting back on how their gifts have made a real difference to the program and the mission of the organization."

McKinnon also argues that giving regularly, and the good feeling that comes with it, often translate into a real commitment to the organization, with many of those donors becoming advocates.

Makes sense for donors

Finally, a monthly giving plan is also relatively easy to sell to donors. Their lives are already designed around monthly payments, and because donors are able to give small amounts, it's hardly noticeable to them.

Having a monthly giving program just makes sense. Surprisingly these programs are pretty easy to implement. You just need a few things.

Simple, consistent message

Monthly giving programs really work best if you have an appealing, ongoing mission. If you think your mission fits this bill, then you just need to come up with a clear, simple and consistent message that sells donors on providing ongoing support.

Want to know what sells? According to The NonProfit Times, the focus used to be on the ease of the transaction, but now charities are "replacing sensible with sensibility, and injecting emotion into their monthly giving appeals."

The most effective messages focus on the connection donors will have with the organization and its work, and tell them specifically what their ongoing support will achieve. For example: "$20/month provides clean drinking water to 10 families," or "Your gift of $50/month enables us to provide lunch to two children every school day."

Candidates for the program

Another thing you'll need to think about is where you are going to find your monthly donors. Some larger organizations recruit monthly donors on the streets. They actually stop complete strangers and ask them to sign up for their monthly giving program right there.

That technique works for larger organization because they are well known. Smaller charities will probably need to tap into the supporters you already have. Focus on your most loyal donors, maybe those that have been giving for two years or more. They will be your best bet for switching to monthly giving.

The technology to support the program

If you're a small nonprofit, you may be thinking that you don't have the resources to support this kind of program, but really you don't need very much. Low-cost database software allows you to set up and process recurring donations in-house or on your website. It also allows you to track all donation information so that you can thank donors, provide updates, and keep the program running smoothly. If you've already got a donor database in place, you can look into online donations tools. Most of them allow for recurring donations.

Learn from what works

Wondering how often you should thank monthly donors, how you should solicit them, what kind of message to use?

"Learn from what works," McKinnon says. Look at what Greenpeace, Amnesty International, World Vision, and Oxfam are doing. They're running very successful monthly giving programs, some with over a million donors. "They're testing things all the time, finding out what's working."

Join those programs and find out what they're doing.

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