Benefits of Monthly Giving Programs (Part 1 of 6)

This is part 1 in a 6-part series on monthly giving programs for nonprofits.

These are uncertain times. The landscape is changing and nonprofits need to be proactive in responding to these changes. Many nonprofits are facing an aging and unstable donor base. As governments and corporations cut back funding, nonprofits need to be able to increase giving from a diversified group of individual donors. A monthly giving program (also called recurring or sustaining gifts) can be an important strategy for increasing donations and engaging younger donors. Well-designed monthly gift programs offer many benefits to both the donor and the nonprofit.

Benefits of Monthly Giving Programs:

1. Ease of Use – Preauthorized monthly giving programs make donating automatic. This automation makes the process easy for the donor and the nonprofit.  With one simple form the donor is done. The donor doesn’t have to remember to send in a check, remember when they sent in their last donation, or otherwise make a conscious effort to donate. For the nonprofit, all the information is processed online. They don’t have to constantly send out solicitations, nor do they need to manually process donations.

2. Increased Giving – There are several factors that contribute to the increased value of a sustaining gift through a monthly giving program. The first advantage is an increase in the annual value of a donor. According to the eNonprofits Benchmarks Study, monthly donors give an average of $228 per year while one-time donors only give an average of $60 per year. Several studies show that donors give more than double if they can separate the donation into smaller, pre-authorized payments.

3. Increased Retention Rates – The Nonprofit Times reports that the annual retention rate for monthly donors is 70% – 80% compared to 41% – 50% for donors who give one-time gifts. Automatic monthly giving programs make it easy for donors to keep on giving – instead of requiring action to give, donors are required to take action to stop giving. The result is increased loyalty and increased giving.

4. Low Administration Costs – One of the most talked about benefits of monthly giving programs is the low administrative costs involved with recurring giving. By eliminating processing and mailing costs, more of the donors’ gifts can be used to fulfill the nonprofit’s mission. MoonClerk provides a variety of flexible tools that allow nonprofits to accept recurring gifts in a way that is simple, convenient and low-cost.  MoonClerk’s platform allows donors to select the interval and charge date that works best for the donor. Payment forms are easy to create and can be tailored to meet the unique needs of each nonprofit. All of these tools combined equal better results at a lower cost.

5. Predictable Income – One of the prime benefits of monthly giving programs is their predictability. An effective monthly giving program provides a predictable and stable income stream. This is especially beneficial to nonprofits whose main income sources are traditionally seasonal.

6. Better Communication – An often-overlooked benefit of monthly giving programs is the opportunity to increase affinity. Monthly giving programs allow nonprofits to redirect their communications with their donors. Having secured a donation commitment from the donor, nonprofits can focus their communications on showing the results these gifts fund – rather than sending ask after ask. This focus on results allows donors to feel more like a partner of the nonprofit rather than an ATM.

7. Engaging Younger Donors – Well-designed monthly giving program not only makes membership cost-effective for young donors, but can also provide benefits and opportunities that appeal to younger donors.  

8. Environmentally friendly – Another benefit of monthly giving programs is less paper waste. Monthly giving programs reduce the need to mail communications, reducing paper and stamps.

Apart from understanding the benefits of a monthly giving program, it is also important to understand the process of developing a well-crafted, robust monthly giving program. Like any new initiative, planning is the key to success. There are many considerations that must be addressed before an organization begins a recurring gift program. Ongoing success requires pre-planning and effective maintenance. This series will address pre-planning, implementation and cultivation. Future posts will examine:

• Planning a Successful Giving Program
• Launching a Monthly Giving Program
• Keeping Monthly Donors Engaged
• Recruiting and Converting New Monthly Donors
• Additional Monthly Giving Program Resources

Learn more about how MoonClerk helps nonprofits accept recurring and one-time donations online.

Photo by Flickr User dmclear