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More and more nonprofits are building monthly giving programs and there is no doubt why. Regular monthly donations add up to a steady stream of income funding day-to-day expenses as well as strengthening the connections between donors, leaders, and the nonprofit. But like any funding stream, monthly giving programs come with additional costs and logistical challenges. Preparing for these challenges is the key to a stronger bottom line.

Monthly giving programs provide an opportunity for donors to break down their donation into twelve smaller chunks instead of a large gift once a year. Often the donor realizes a monthly giving program encourages him to give more as well as connects him to the nonprofit year after year.

Beginning the program is easy. Provide the donor with the choice of making their gift monthly instead of once a year. Then the donor provides his credit or debit card information along with the amount he wishes to give. Ask the donor if he wants a monthly receipt or a single one at the end of the year. Finally, create a new monthly donor category in the database.

The consistent stream of income is a huge advantage, but there are some additional costs. First, small monthly credit card donations lead to additional credit card fees. Second, since the gift is automatic, donors do not have a regular opportunity to assess their budget to determine whether they can afford to increase their donation. Third, the regular credit card breaches require nonprofit staff to follow up with donors to gather new credit card information. 

Since the donation continues year to year, there is not a built in time to thank the donor for his donation. Clearly, a letter at the end of the calendar year is important for tax purposes but adding a handwritten thank you note in the middle of the year adds a personal touch. Providing thank you notes and donor information before every board meeting encourages board members to participate in raising funds and creates connections between donors and leaders.

A monthly donation program also creates a stronger incentive for organizations to create a regular newsletter. The newsletter reminds donors why their donation is important. Including a donation envelope with the newsletter encourages the donor to give a little more. E-newsletters are a cheaper more efficient way to connect with donors. The email should include just the beginning of each of the articles (total of three or four) with a link to the website where donors can read the rest. Linking to the website encourages the donor to visit the website and hopefully land on the donation or volunteer pages.

Even though the donor gives monthly, the organization should still send an ask letter during the end of the year campaign. This letter, tailored specifically for monthly donors, encourages the donor to assess their year end financial position and make a second gift if they are able. The letter should thank the donor for their monthly gift as well as ask for a second smaller donation to fulfill a special need.

Monthly donors may seem like obvious candidates for major gifts and some may be, but others are better candidates for planned gifts. We will discuss what to look for when making that distinction in the next post.

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