Part 2 in Creating a Monthly Giving Program
As I wrote last month in the introduction to this series, six out of every ten donors will stop giving to your organization next year. This trend is going in the wrong direction. But you can retain more donors with the right strategy. The donors currently in your database represent a hidden treasure of funds just waiting to be found (or in this case, asked!). They know you, they gave to you, and they most likely want to give more. Why not ask them to become monthly donors?
Most monthly donors stay with an organization between five to seven years and sometimes even longer. We have even seen donors who give recurring gifts to organizations for more than 20 years!
It is important to consider exactly the concept, what is monthly giving? A monthly giving program involves pre-authorized or recurring gifts. These are gifts that the donor has authorized you to deduct directly from their bank account or charge to their credit card every month on a recurring basis. In monthly giving, the donor makes a pledge to give a certain amount to your organization each month, and then provides you with a credit card or bank account number, or some other means to directly deduct the money from their account.
Monthly giving programs are very popular with non-profits in Europe, and have been gaining popularity with organizations in the US and elsewhere, and for good reason — they work. There are many benefits of monthly giving programs.
Launching a monthly giving program can be a powerful strategy for non-profits both large and small. Studies over the past decade have shown that monthly givers give more money and stay with a non-profit longer than non-monthly givers. Here are some of the reasons why monthly giving is so important for every non-profit:
Retain more of your donors for many years
The average donor retention rate is 43%. That means 57 of every 100 donors will not give again to you next year. If you start a recurring donor program, your retention rate more than doubles!
Once a donor signs up for a monthly giving program, they stay more loyal to the non-profit and tend to give more than they otherwise would because monthly donors, if cultivated right, build stronger relationships with the nonprofits they support, and because that relationship won’t be stopped just because the donor forgets to put a check in the mail. Stopping a monthly giving relationship takes a proactive step from the donor, one they are unlikely to take unless they really mean to stop their support for a particular non-profit
Monthly Giving Programs Build Strong Relationships
One of the most amazing things about monthly giving is that once a donor signs up for a monthly giving program, you can stop asking them for money, because the person is giving you money each and every month. Instead of making regular asks, you can focus 100% on stewarding your donors. Imagine, donors that get tons of attention from your non-profit, and none of it is an ask!
Okay…the truth is that you’ll want to send your monthly donors one ask per year, an opportunity to upgrade/increase their monthly gift. But other than that, all of your communications are based on cultivation and stewardship. You can build amazing and strong relationships with your monthly donors, confident in the knowledge that the money is coming in every month.
Monthly Giving Programs Provide a Stable Foundation for Your Non-Profit
Good monthly giving programs build a regular, dependable monthly income upon which your organization can rely, month in and month out. Instead of waiting around for donor checks to arrive or worrying about whether or not this donor or that donor will make a gift this quarter, you know that you are starting every month with a increasingly substantial deposit in the bank.
Monthly Giving Programs Lower Fundraising Costs
While there will be some expense in launching a monthly giving program, overall the larger your monthly giving program becomes, the lower your fundraising costs will be. As donors sign-up for monthly giving, you can stop sending them direct mail solicitations and stop worrying about scheduling asks and follow-up calls. And, because monthly givers are more loyal to your organization, you can spend less money trying to find new donors to fill in for all of the donors who lapse each year.
NEXT MONTH: Monthly Giving—How to Get Your Program Started