One of the most effective, but underused, fundraising strategies for non-profits is the Monthly Giving Program. A Monthly Giving Program is a smart strategy for all nonprofits, but particularly for small shops. Your fundraising dollar goes further with each acquisition of a monthly donor, because those donors will likely continue to increase their giving over a longer period of time. Monthly Giving Programs can make it easier for donors to give more annually and build a stronger relationship with your organization. According to Network for Good, the average recurring donor gives 42% more in one year than donors who give one-time gifts, and retention rates are over 80% for Monthly Giving Program, especially for donors who reach the one-year mark.
Some Quick Tips on Starting a Monthly Giving Program
If you don’t have a Monthly Giving Program it's important to start one soon. Here are some things to keep in mind.
- Name It: Usually, non-profits give a name to their group of monthly givers – something like The Founders Club or President's Circle. Giving the group a specific name gives your donors the feeling of joining a club or exclusive circle because, essentially, that is what they are doing. By joining the named Monthly Giving Program they are joining a group of dedicated supporters who help keep the organization going.
- Ask for it: It is not enough to just start the program, you have to promote it. Putting a link on your website, or an ad in your newsletter isn’t enough. You have to invite people into this elite program. You do this by running specific Monthly Giving Campaigns through direct mail and online. Once or twice a year, invite people who are already on the donor list to become monthly donors. Make it very clear what they are doing, let them select a gift amount, and let them know clearly that their credit card or checking account will be debited for the amount they commit to on a certain day each month.
- Explain it: Make sure you explain to them the benefits the Monthly Giving Program offers to both the donor and your organization. We make it very clear that for donors it is just like paying a utility bill automatically with your credit card or your mortgage payment through an automatic draft from your checking account. Make it clear that they are able to opt-out of the Monthly Giving Program anytime they want, for any reason at all.
The Benefits of Monthly Giving
At LDMI, we have found that establishing a Monthly Giving Program as part the non-profits' regular or annual scheduled mailings has several very significant benefits.
One major benefit is that once the donor has agreed to become a monthly giver, the cost of bringing in their monthly gift is low. The transfer of funds is done electronically from either a credit card or checking account at a bank. It “is among the most cost-effective, long-term fundraising methods. The gift is only solicited once, and, because it is handled electronically, processing costs are kept low.”
Another benefit of Monthly Giving Programs, and something we make clear in our appeals, is that it helps with planning and budgeting. Let's say the Monthly Giving Program is triggered on the 15th of each month. The CFO now knows that on the 16th of every month, he/she is going to see another $20,000 or $200,000 or $2,000,000 deposited into organization’s bank account. It's like a paycheck for the organization that you can count on.
The third thing we found is quite surprising. The people who give these monthly gifts do not want you to stop sending them other mail. They still want to receive your mail. They like what your organization is doing. They want to hear from you. They are your most loyal supporters. So they still want to get the newsletters. They still want to get the monthly funding appeals. They may or may not give as often to those other appeals as they have in the past, but they definitely want to continue receiving them.
Once people are in a Monthly Giving Program, they tend to not leave that exclusive group. Of course, some leave. Some die, some never get around to giving you their new credit card account number when the old one expires. (That's why it's important to have somebody responsible for cultivating those donors and trying to get the new credit card account numbers.) But for the most part, the retention rate is very high. Sometimes retention rates are as high as 85-90% year to year. So, if they sign up for one year, they're probably going to stay in that program for five or more years.
The Bottom Line
You will never get all of your donors to join the Monthly Giving Program. But look at your own numbers and do the math. Let's suppose 5% of your donors were to opt into a Monthly Giving Program and calculate the cost at $19 a month. ($19 is a common average). So take 5% of your list and multiply that by $19 a month, 12 months a year. That is going to be reliable income for your CFO to use to pay the bills.
There is very little downside for non-profits to begin a Monthly Giving Program. So, if you don't have one, get started right away. And if you'd like to benefit from our years of experience managing these programs for our clients please contact me today
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