Donor Management & Fundraising Blog

Monthly: The New Preferred Giving Cycle

Written by Ryan Finkelstein | December 8, 2016

Smaller, steady contributions each month make online fundraising easier for donors and generate predictable revenue for you.

Annual campaigns can initially seem like the best way to fundraise—you only have to do them once a year and they usually generate hefty donations. But for all the effort, only about 50 percent of your donors will come back to give again, and that percentage continues to fall in subsequent years. Monthly giving cycles can help you generate the same amount of funds as annual ones and make your retention rates higher than ever.

 

In the long run, getting out of the rut of annual giving to move your online fundraising efforts to a monthly structure will likely pay back big time. It’s working for many nonprofits; in fact, the change has been so successful for the Humane Society of the United States that they now lead off with a monthly appeal on their website. So if you’re ready to make the switch for your nonprofit, here’s what you need to know about setting up your own monthly giving campaign.

 

How it works

 

Your constituents will agree to an online donation that is smaller than common annual donations and structured in recurring, monthly installments. The obvious benefit for your organization is a steady and predictable source of revenue. Most programs are set up with the option of no end date or automatic renewal.

 

Pricing your entry point: bigger is not always better

 

It’s the size of the donation that makes this option increasingly popular. Ask amounts are small enough that they’re highly affordable and appeal to a wide donor pool. The online recurring model also gives you the opportunity to put the gift into perspective in terms of both its value to your organization and to donors. Here’s an example:

 

“A $5 monthly donation is the cost of skipping just a single iced latte at your favorite coffee shop, but it buys enough formula to feed an orphaned kitten and puppy.”

 

A $60 one-time online donation might seem like too much while $5 per month over a year ensures you get the same amount, but at an increment, the donor can commit to. This low point of entry also encourages more people to participate, while the online recurring nature of the gift keeps them engaged with your cause.

 

Many organizations start by determining the previous year’s average donation. Then they’ll use 15 to 20 percent of that number as a baseline. This becomes the minimum donation amount.

 

Be careful to segment your donors, though. Someone already making annual $500 donations shouldn’t be asked to consider a $25 monthly gift.

 

Why it’s good for you and your donors

 

This monthly cause-and-effect approach can boost both donor generosity and giving convenience. Most recurring gift programs are set up online through an automated electronic payment from a donor’s checking account or credit card. That makes transactions easy to set up and maintain, and even easier to process and track.

 

The only downside

 

The most common problem non-profit organizations experience is expired credit card information. In this case, you’ll have to reach out to constituents for updated information. Cloud-based fundraising software works best for online recurring gift programs; it allows you to send an email reminder to constituents when something stops their monthly gifts. The right donor management software will easily track recurring gifts and automate follow-ups and updated information requests for you.

 

Tweak communications

 

With a monthly program, you should be talking to recurring donors more often. Create special communications for them – they shouldn’t be on the list for general appeals. That doesn’t mean you should refrain from asking them for additional one-time donations, but it’s important to acknowledge the monthly gifts they’re already giving when you send them communications. Deepen your relationship with them by crafting a monthly or quarterly newsletter that’s sent just to them and shows how their gifts are making a real impact.

 

Yes, it’s got to be online

 

Online giving grew 9.2 percent in 2015. Here’s another compelling statistic: Facebook drove nearly 30 percent of all traffic to online donation pages during last year’s #GIVINGTUESDAY.

 

So if you don’t have an online donation system in place yet, the opportunity for incremental, steady income from a monthly giving program is a fantastic way to grow your annual funds. Online is where and how people want to make these gifts to you...is your organization set up for it? More information about creating recurring gift cycles through online fundraising software can be found here.