Building a Foundation for Monthly Giving

Why Monthly Giving?

In the age of subscription services like Netflix and Amazon, the US donor market appears primed to consider making monthly gifts instead of just their annual year-end contribution. As millennials reach their peak earning years and overtake baby-boomers as the optimal donor population, monthly donor programs will become a mainstay of healthy annual giving programs.

Monthly giving provides a pipeline for mid and major level giving, and provides a steady, predictable revenue stream that allows for strategic investment both in programming and fundraising. In short, monthly giving is the best opportunity to affect donor retention and increase the overall lifetime value of donors.

Need convincing? According to a  study by NextAfter and Classy, monthly donors are worth 5.4x more than one-time donors over their lifetime. Moreover, the average monthly donor will give 42% more in one year than those who give one-time gifts. Monthly donors are also retained at significantly higher rates compared to their one-time donor peers:

When taken collectively, the annual value of monthly donors increases dramatically. Consider this chart from the 2017 Target Analytics donorCentrics Sustainer Summit:

So, what can organizations do today to lay the foundation so that they are prepared for this shift in donor behavior?

What’s required?

1. Cases for monthly support

At their core, strong monthly giving programs are driven by a compelling case for ongoing support. Here are some ways to incorporate that case for ongoing support with an example from our client FOUR PAWS, who works to end animal suffering:

• “It’s one thing to save an animal’s life… but it’s quite another to keep that animal safe.“
• “From Borneo, where FOUR PAWS is rescuing and rehabilitating orangutans, to South Africa, where scores of big cats find safe haven from circuses, unlicensed zoos and inhumane exploitation; saving animals is a 24/7, 365 days-a-year mission.”
• “Moreover, the sustained effort required in the fight against the illegal puppy trade and reducing the demand for fur worldwide needs an equally sustained commitment from animal lovers everywhere.”

2. A Holistic Approach to Growing Monthly Giving

After you’ve established your case(s) for ongoing support, develop strategies to retain more of your existing monthly donors. Make sure you’re set up for success from a technological standpoint, and have testing and optimization strategies in place to steadily acquire more monthly donors. Additionally, position your digital properties and outreach so that they are optimized to take advantage of big media moments. With all of these pieces working together in your ecosystem, you can drive strong monthly increases in revenue over time.

Why should donors give monthly?

Making an external case for monthly giving is an important piece of building a sustainer program. Outside of the benefits to your organization, you need to communicate what’s in it for the donor. Here are some benefits to giving monthly:

• It’s convenient! Donors can “set it and forget it.”
• By spreading out their donations, donors can more effectively help the organizations they care about because they’ll be providing reliable gifts.
• It is also more cost effective. A small donation spread out over 12 months as opposed to one donation at a time gives donors on a budget an opportunity to financially support the causes they care about.
• Finally, donors can support more than one charity at a time because they’re spreading out their philanthropic giving.

Who should you ask?

Recent one-time donors are the best monthly donor prospects. This is why many organizations typically run their monthly donor acquisition campaigns at the start of the year, immediately following year-end giving campaigns where they’ve acquired a significant number of new one-time donors. 

Here are additional audience segments that might also make sense to ask to give monthly:

• Previous one-time donors (currently lapsed or deeply lapsed)
• Existing prospects already on your email file
• New prospects who recently joined your email file – layering in a monthly giving ask to a welcome series is always a good idea!
• Website visitors and donation form abandoners. These folks are interested in your work, but need an extra nudge to get them to give.
• People who search for your organization on Google or Bing.
• People who follow your organization on social media.

Sometimes, all you need to do is ask. We worked with the Cornell Lab of Ornithology on their first sustainer acquisition campaign, bringing in 627 new sustainers and over $100k in annualized revenue.

How should you treat monthly donors?

When building a foundation for monthly giving, it is important to think about how you will subsequently treat your donors once they convert to monthly giving. Your strategies may vary, but often include:

• Suppressing monthly donors from certain one-time appeals. If you choose to include them, have their monthly gift acknowledged during the one-time ask. For example, “Will you consider making a special one-time gift, above and beyond your generous monthly gift?”
• Including additional call-outs for monthly donors in newsletters or other specialized email treatments.
• Specific upgrade appeals – typically ran at the same time as monthly acquisition campaigns.
• At higher levels, engagement with gift officers.
• Special invitations to events.

Final thoughts

Ultimately, monthly donor programs can take years to develop – but once in place, they do a lot of good.

Building a monthly donor program, or any other annual giving program, requires a long-term commitment to testing and optimization. You should make sure to have good technology in place, including your database, eCRM, and merchant services. These elements of a solid monthly giving program should be built over time. Limited bandwidth is an all too common challenge for nonprofits, and it’s important not to bite off more than you can chew at once.

Before pursuing monthly giving, make sure to get buy-in from organizational leadership. Often, building a monthly giving program means sacrificing higher levels of giving in the short term for returns that take longer to realize.

Be sure to check back on our blog for a tactical approach to building a monthly giving program that’s donor-centric. Questions? Get in touch with us!