The dark side of nonprofit monthly giving

March 25, 2014

The wider adoption of monthly giving (also known as regular or sustained giving) in the U.S. could itself transform philanthropy.”
Dr. Adrian Sargeant

Nonprofit monthly giving is awesome.  It results in increased donor retention and loyalty.  Your monthly donors are strongly predisposed to bequest giving.  And oooh la la, your monthly giving program results in reliable income for you.  You can plan!

I’ve been preaching the benefits of monthly giving programs for small shop fundraisers for years.

But here’s the drawback:  if your organization is still in acquisition mode, instead of all-out gratitude mode, your program can end up being one big flop.  As Joe Garecht notes in his post, Why Monthly Giving Matters for Every Non-Profit, “Stopping a monthly giving relationship takes a proactive step from the donor, one they are unlikely to take unless they really mean to stop their support for a particular non-profit.”

Think about that for a moment:  when you don’t love your first time donor, your actions result in another all-to-common statistic.  Your donor doesn’t come back to make a second gift.

But when you don’t love your monthly donors — when you don’t report back to them regularly on the impact of their gift, when you don’t bother to reach out to them to shower them with gratitude, when you don’t let them know how very special they are…you could end up with something even worse.  Angry donors. 

AngryDonorWhat goes on in an organization’s back end to make  a loyal donor take the extra step of ending a long-standing relationship with an organization?

When my friend Corinne Marasco recently ended her monthly giving to an organization, she wrote to share with me her experiences:

“Here’s why I stopped giving:

1) No one seemed to know me or my donation history. As a monthly sustainer, I kept receiving e-mails with additional asks.
2) The asks I received were from different  people — not a consistent point of contact. I know you (and I) have raved about Al Franken’s; this would be like hearing from Al, his finance director, his communications director, his policy advisor, his chief of staff, etc.
3) I did not get the impression there was a separate plan for monthly donors. We didn’t seem to be treated differently than one-time or occasional donors.
4) I never got a thank you. Ever.”

I can relate.

Last year was my unofficial “year as a donor.”  My business began expanding and the first thing I did was to begin making a number of contributions to various nonprofit organizations — including five monthly gifts.  Like Corinne, I found myself leaving two organizations, both because I never received a thank you – ever – and because, in one instance, I was never contacted again.

Yes, monthly giving can literally be a magic wand. 

But if your organization’s gratitude systems aren’t in place to start with, starting a monthly giving program (or your major gifts program, or a new campaign) you’ll still be hemorrhaging donors.

How can your organization ensure that your gratitude systems are in place and your monthly supporters are feeling the love?  For answers I asked Simon Scriver, Director at Total Fundraising Ireland, where they believe “every donor should be inspired, every employee should be successful, and every non-profit should be empowered” to share what he sees as the big problems in monthly giving:

1.  Lack of investment of time/money in recruiting regular donors

Recruiting monthly donors is, of course, far more expensive than one-off donors or ‘shaking a bucket’. But then of course the rewards can be so much higher as it allows you to plan, the donor can go on to donate so much more, and you get an opportunity to really build a relationship.

But we sometimes make the acquisition of regular donors more difficult than it needs to be as it’s seen as a difficult ask or a big commitment from the donor.  But usually you’re only looking for a small amount each month, it’s convenient for the donor and the charity, and when you explain it properly to a potential donor it generally makes sense to them.

The biggest challenge for organisations is to shift their mindset to monthly giving and to get in to the habit of asking potential donors to become monthly givers. You need a direct debit or standing order form prepared and you need to make it as convenient as possible for your potential donors both off-line and on-line. And you need to ASK! And ask everyone!

2.  Not seeing stewardship as fundraising

Many times in my consultancy and seminars I hear fundraisers say that they don’t have time to make welcome calls or send thank you letters. None of us have time to send personalised notes, pick up the phone or meet with individuals. All of these things and more get neglected because they don’t always immediately turn in to a donation.

But that’s the wrong way of looking at it – stewardship IS fundraising because if you don’t do it properly you’re reducing the chances of your donors giving again. When a donor decides which charity to cancel first (and many of them will be donating to more than one) do you think they’ll cancel the charity that ignored them or the charity that just sent them a lovely, gushing, hand-written letter?

Donor care IS fundraising and we need to put time and money in to it accordingly.

3.   Poor communications

The big question is of course how often do you communicate with monthly donors? There’s no right answer (otherwise we’d all be doing it) – but I donate to some organisations that send me one or two updates a year, while on the other end of the scale is a charity that e-mails me every 2-3 days.

The answer is: As often as you have something to say. And I mean something really good.

We usually approach it the wrong way – organisations think they should send 2 updates a year, or 4 updates a year, or 2 newsletters, etc. because it seems like a reasonable number. But don’t send them for the sake of sending them. Don’t set yourself a number of mailings which you then struggle to fill. Find out how many inspiring, emotional, engaging stories you’ll have and then deliver them.

4.  Lack of planning

Getting someone to commit to you is just the beginning and you need to be prepared for what comes next. How often will you communicate? When will you ask for an increase? Will they receive a Christmas appeal?

You need to plan and you need to have a good idea of how you’re going to keep this donor giving and how you’re going to maximise income.

I always equate ‘donor care’ to spinning plates. When you initially recruit a monthly donor you set the plate spinning. They are then bombarded with negativitiy: people tell them charities are scams, that there’s a recession, that they can’t afford it, that they should spend their money on any one of a million things they see advertised every day.

Your job is to keep the plate spinning.

In particular you should be ready for ‘spikes’ in cancellations – there’s generally a spike in January and a spike coming in to the summer. There’s a spike if your organisation gets negative press and there’s a spike if there is really bad economic news. So how are you going to pre-empt and deal with these cancellations?

And if a donor cancels – what next? Monthly donors are funny – they only see two options: on or off. What you need to communicate with cancelled donors is that there are other options: a lower donation amount, a one-month break, annual donation, etc. You want to work with them to find what works for everyone.

5.   Lack of long-term commitment (especially with staff changes)

If you have a plan in place you need to stick to it. Yes, things change. And if they do then you need to be ready to change with them. But a really common problem in small/medium organisations is that we start off with the best intentions and then everything else gets in the way and all of our great plans fade away. Please don’t let that happen.

The answer is, of course, to plot out every step of the donor journey before you launch your monthly giving program.  And that involves two key Simple Development Systems tenets:

  1. know that everything is figure-out-able (h/t to Marie Forleo), and
  2. make friends with your vendors

Get both these right and watch your donor love (and sustainable income) grow!

Additional Resources

Monthly Giving | The Basics & More

Monthly Giving: The Sleeping Giant, by Erica Waasdorp

Hidden Gold, by Harvey McKinnon

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