Monthly Giving Programs
The most successful nonprofits focus their efforts. They find the tactics that work and then invest their efforts there. Finding the most successful channels will often require you to try five or six different things, but once you find a channel that earns a good income, invest and grow that area until you can’t grow it anymore. You’ll still have multiple giving channels, but many nonprofits find a few channels that demonstrate outsized success.
Let us make the case to you why monthly giving should be one of the areas you invest.
The first reason you should invest in a monthly giving program is donor value. The average recurring donor will give you 42% more in one year than donors who give single gifts.
Donor acquisition is expensive.
Donor acquisition is expensive. If you’re able to generate 42% more income from a monthly donor than a single one-time donor, it helps pay off your donor acquisition quicker.
Increased donor value also improves your ability to do good work. What would your programs team do if you delivered 42% more revenue to them this year to do their work?
Not only is the short term donor value better, but lifetime value is excellent. Recurring donors are worth 5.4 times more than one-time donors. So, if the lifetime giving of a one-time donor is $300, the lifetime value of a recurring donor is $1,620. At Food for the Hungry, the lifetime value of a monthly donor is more than $2,000!
Recurring donors are more likely to give beyond one year. According to the Fundraising Effectiveness Project, recurring donors are more than twice as likely to give beyond one year when compared to single donors.
Our role as fundraising leaders is to build relationships with donors so they view your nonprofit as an extension of their generosity. When donors give year after year, you’re succeeding in this part of your job.
Another measure that demonstrates your success as a fundraising professional is the median revenue donors are giving. When you have a high median total revenue, you’re building deep relationships with donors. The 2017 Target Analytics Survey found that median revenue for monthly giving is $320 per year, an increase from $305 in 2013.
Monthly donors give a lot to your cause.
Monthly donors give a lot to your cause.
Donors enjoy giving. They enjoy giving because you’re providing a way for them to express their love for other people or a cause. For many donors, giving $240 at one-time is a challenge, but giving $20 per month is more comfortable. By providing this flexibility, donors receive joy knowing their gift will be used in a good way. It is convenient for them because they can set up giving as they do for everything else - automatic, withdrawn each month.
For your nonprofit, monthly giving is a valuable way to create predictable income over a period of time. Monthly income provides predictable cash flow, so you aren’t raising all of your income in a few months. Many nonprofits raise most of their funds (many raise 50%) during the last quarter of the calendar year: October, November and December.
Monthly giving income is consistent and predictable.
Monthly giving income is consistent and predictable.
Donors feel joy when they give. They want to see that girl saved from sex trafficking, or that child receive an education, or a veteran receive job counseling, or a mom reunited with her children. They derive joy when they know they’re contributing. Monthly giving allows people to feel joy each month as they give automatically.
So the big question: Is creating a monthly giving program worth it?
We would answer the question by saying, “definitely yes!”
Starting a monthly donor program is one of the best decisions you can make as a fundraising leader. Yes, the investment of time and resources into starting it is going to be significant, but once you start exploring the benefits of monthly giving, you’ll find the decision you’re making now is the right one.
Here are five keys to launching a successful monthly donor program:
1. Get Leadership Buy-In
Not everyone will be in favor of your nonprofit launching a monthly giving program. It doesn’t always make sense, but some stakeholders have misconceptions about a sustainer program and fear will cause them to purposefully, even subconsciously, put up roadblocks or try to sabotage the efforts to launch the program.
Key stakeholders that you need to convince of the worthiness of a continuity donor program include your executive director or CEO, executive leadership team, your board of directors, fundraising staff, programs team and other internal staff.
The first group you need to get excited about the monthly giving program is the leadership team, starting with the executive director or president. Without his or her buy-in, you’re not going to get very far. You’re going to face resistance from people and you need that executive support to move forward. How do we get the chief executive excited about the monthly giving program?
There are five areas in which a chief executive will be interested:
- How much will it cost?
- What is the return on investment (ROI)?
- How long will it take for break-even?
- Donor acquisition plan
- Revenue projections
With your executive leadership and programs team buy-in and participation in the product development process, you’ll find fewer roadblocks to monthly giving success.
2. Create a Compelling Offer
It’s often said that a donation happens when you have the right offer to the right person at the right time. A compelling offer is one that encourages your donor to envision the lives she/he is changing. The compelling offer is the “product” you offer to donors that moves them to donate — and continue donating each month. You can develop a compelling offer with this process:
- Brainstorm how you work. What does your nonprofit do? Identify the services your nonprofit offers. What makes them unique? What is unique about your organization?
- Develop the product. What’s your organization’s purpose? Look at your organization’s tagline: how does that inspire your offer? What is your unique selling proposition (USP)? Why does a donor give to you?
- Name your program. Using the information gathered in steps 1 and 2 to brainstorm potential names for your recurring giving offer
3. Define Acquisition Channels
We worked with two different organizations that developed monthly giving programs a few years ago. In fact, each organization independently named their giving programs almost the exact same name! One of the giving programs failed quickly while the other grew and is contributing significant revenue. What was the difference between the two programs? It was a successful acquisition plan.
There are a variety of different types of acquisition channels for monthly giving, including events, direct marketing, digital, telemarketing, face-to-face, television and radio. Investing in the right acquisition channels will determine success for your monthly giving program.
How do you decide where to invest?
Testing is vital. Pursue and test multiple giving channels to determine a repeatable acquisition cost. The acquisition cost isn’t the only key to success. Some donors will quit giving. Measure the percentage of donors that quit over time (attrition rate) and project a lifetime donor value. This data will help inform which acquisition channels are the best for your organization.
4. Build Donor Retention Systems
A successful monthly giving program retains donors. Before you launch your program, you’ll want systems in place to help set you up for success. The types of systems you’ll need are:
- Donor operations: How will you handle customer service, including in-bound and out-bound phone support? You will also need a donor gift processing team to handle new incoming monthly donors and resolve any problems for this crucial segment of donors. Build systems and processes to support acquisition channels such as registration card shipping or volunteer management.
- Technology: Does your donation management system (DMS) support monthly giving? Build the necessary landing pages or microsites on your website to support incoming donor signups and provide stories and an explanation of your giving program. Create an account management area for donors to see giving history and information about their account.
- Communications: Communications are crucial to your program’s success. You’ll want to think through a few different communication streams before you launch your program, including how you’ll get stories and resources back from your programs team to share with donors, what type and frequency of communications you’ll have with donors, and how you will handle welcoming donors to your nonprofit.
- Cancellations: Define the communications process for what happens when a credit card fails or a donor cancels. Also develop your reactivation process for lapsed donors.
Building these systems before you launch a monthly giving program will help you retain more donors and let you focus on acquiring new donors.
5. Empower an Awesome Team
Every successful monthly donor program needs a multi-disciplined team. That can include a creative team to build the product, operations-oriented people to help assess success and implement processes to keep donors around, a program team to help report from the field, the leadership to sell the product internally and externally, and sales/marketing to develop acquisition channels. The challenge is getting this diverse team to work together and believe in the project. When you assemble the monthly giving program launch team, challenge them to create common ground. Build a baseline using your mission: your ministry is fighting for children, veterans, legal rights, spreading God’s Word or education, etc. When you start at this level, it helps people understand why they’re fighting to launch a new type of giving.
Not every monthly giving project is going to succeed immediately. At Food for the Hungry, it took several years before the child sponsorship program found success. Keep testing and evolving the program.
Creating a monthly giving program won’t be easy. But it will be worth it.
Jeremy Reis is the Senior Director of Marketing at Food for the Hungry, an international relief and development organization. Mike Meyers is a partner at Nonprofit DNA and formerly the CEO and CDO at Food for the Hungry. In the previous 5 years, Mike and Jeremy nearly tripled Food for the Hungry’s private revenue and more than doubled the number of monthly givers to 145,000. Mike is the co-author of Maximize the Middle (BBS & Associates, 2019) and Jeremy is the author of Raise More Money with Email (Nonprofit Donor Press, 2017) and the upcoming book Magnetic Nonprofit. Jeremy and Mike blog at nonprofitdonor.com.
Jeremy Reis and Mike Meyers will co-lead a session entitled “Building a Monthly Giving Program” during the Resource Development Forum at The Outcomes Conference 2020, April 7-9 in Dallas. Register Today!