19 Ideas For Your Monthly Giving Program

The old message was a new-age one, brimming with words like, “technology,” “automatic,” and “electronic.” It focused on the “EZ” nature of the transaction, attempting to appeal to the sensible side of donors. These days, as nonprofits’ organizational constraints tighten, charities are replacing sensible with sensibility, and injecting emotion into their monthly giving appeals.

Bob Wesolowski, president and founder of Caring Habits, Inc., a New York City-based third party processor of nonprofits’ monthly donation programs, spoke about this change in messaging at the 2006 Direct Marketing Association Nonprofit Federation Conference in Washington, D.C. According to Wesolowski, “Organizations generally don’t make the same commitment to monthly giving that they do to, for example, planned giving.”

Monthly giving donors have the potential to be more valuable in the long-term. Annual donors, said Wesolowski, typically contribute only about two years before they lapse, and during this brief period they may donate $25 to $100 per year. Monthly donors, on the other hand, contribute for an average of seven to 12 years, and their monthly gifts range from $10 to $50 with some as high as $200 to $400, he said.

Wesolowski added that 23 percent of planned giving comes from monthly donors. He recommended organizations move toward tailoring their monthly giving messaging to appeal to their donors’ sensibilities. Monthly giving programs that had names such as EZ Gift, Autocharge and ElectroCheck are being replaced by more successful ones with names like Mission Direct, Innkeepers Club, Partners for Life. And organizations are trading straightforward messaging that emphasizes the quick and easy nature of the transaction, to one that highlights a more personal connection between the donor and the organization.

From a comparison across several types of charities’ (i.e. relief, food bank, environmental, activist) revised monthly giving programs, Wesolowski concluded promising results overall. Participation rates ranged from two percent to 18 percent of an organization’s active donors. The average upgrade for new participants, he said, ranged from 50 percent to 100 percent, with a ten-year average of 85 percent. He expects a 96 percent annual retention rate, along with a 99.9 percent fulfillment for bank transfers and a 90 percent to 95 percent fulfillment for monthly donations via credit cards.

Before launching a monthly giving program, Wesolowski recommended that an organization consider the differences between funds transfers and credit cards. Funds transfer, he said, provides several advantages, including higher fulfillment, higher retention, lower processing costs and less administrative follow-up. But, added Wesolowski, credit card donors often give 10 percent to 15 percent more.

Wesolowski also recommended the following:

Make a strong commitment to the monthly giving program
Name the program to build brand identity
Upgrade donors annually
Consider the use of special appeals
Always include a soft ask for a one-time contribution in every appeal

Monthly giving programs are one of the best ways to reduce donor attrition and upgrade a donor’s giving level, agreed Harvey McKinnon, president of Harvey McKinnon Associates, a marketing and fundraising company in Vancouver, B.C., Canada. McKinnon, who specializes in monthly giving programs, predicted that in the coming years charities will look to their monthly giving programs to increase their incomes.

McKinnon recommended a charity ask the following prior to starting a monthly giving program:

1. Is the maximization of long-term income one of your organizational goals?

2. What method(s) will you use to recruit monthly donors (e.g. mail, phone, face-to-face, volunteers, special events, television)?

3. Are you going to give donors the option of making a single gift instead of a monthly commitment (i.e. the soft ask)?

4. What is your marketing proposition? What will you offer the prospective donor?

5. What list segments of your donor file will you approach to invite to join your club?

6. Is there a staff person/volunteer who can run this program?

7. Do you have the ability to manage a pledge program with your current software, or can you afford the software required?

8. Do you have a commitment to continue the program once it’s started?

9. Do you have a compelling reason for why donor’s should join the program?

10. Do you have committed donors who’d join the program if given the opportunity?

11. Have you done the financial calculations to determine the long- and short-term potential net income from a monthly giving program?

12. Do you have the staff to create and direct the program, or will you outsource? What are the costs of outsourcing?

13. Will you offer monthly reminders? If so, will you do it in-house?

14. Will you offer a credit card payment option?

15. Will you offer the option of Electronic Funds Transfer?

16. What benefits will you give donors?

17. Is there organizational support for the program?

18. What resources do you have to devote to the program: financial, technical, human?

19. Do similar organizations have monthly giving clubs? Have you researched their programs and promotions?