Establishing a strong monthly giving program is one of the best ways to improve donor retention and establish a reliable source of cash for your organization.
Harvey McKinnon, a fundraising consultant and author of Hidden Gold, a book about wooing monthly donors, shares advice on how to avoid problems when getting started.
1. Take a long-term perspective. Monthly giving is an area of fundraising where organizations won’t see an immediate return on investment, says Mr. McKinnon.
That means taking on some (very low) risk in order to reap rewards in the future. The retention rate for monthly donors is higher than for any other form of giving by far.
“Ultimately, my feeling about fundraising is that you have to look at long-term value—that’s the most important metric, above all else,” says Mr. McKinnon.
2. Set a minimum donation. If you’re getting people to sign up as $2 donors, you probably won’t make money off the program, Mr. McKinnon says.
Many nonprofits offer suggested dollar amounts for monthly donations. Organizations should aim for an $8 or $10 minimum to maximize the amount of money the program can bring in, he says. From that starting point, you can encourage donors to upgrade to higher dollar amounts over time.
3. Communicate, communicate, communicate. Make sure you stay in contact with recurring donors to help them feel connected to the organization. Ignore them, and they might forget you exist, says Mr. McKinnon.
Organizations that do great stewardship have a much higher retention rate than organizations that don’t, he says. And whether you use mail or email, make sure to send high-quality messages.
4. Set up strong systems for renewing donors. Americans are changing credit cards more frequently than in the past, and that has meant higher rates of attrition among monthly contributors, says Mr. McKinnon. But donors may also lapse for financial or other reasons. It’s cheaper for nonprofits to get them back than to acquire new donors.
Organizations need a system to try to win back these donors, says Mr. McKinnon. That process should probably involve phone, mail, and email.
5. Push preferred payment options from the start. Payment via electronic funds transfer, or EFT, from the donor’s checking or savings account is the preferred method of giving at many organizations. Bank accounts don’t expire, and people change them less often than they change credit cards. Payment-processing fees are also much lower for EFT than for credit cards.
Give your donors this option from the start, and don’t be afraid to tell them this is the best way to give, says Mr. McKinnon.
Organizations can also run conversion programs, prompting donors who pay via credit card, or even by check, to change their method of payment.
“Many of them never will convert because they want to get the frequent-flyer points,” Mr. McKinnon says, but if you can pick up 1 or 2 percent every time you communicate with them, you’re on the right track.
