2006 Articles

Monthly Giving: Worth the Commitment

By Erica Waasdorp

For those of you who have already started a monthly giving program, congratulations! I'm sure you are very pleased to see money you can plan on pouring in on a regular basis. For those of you who are still thinking about it, let me ask you a question: "What are you waiting for?"

The new staff member? Is IT dragging its feet (again?) Is the database not quite right? Are you afraid your donors are not going to like it? Or do you feel you don't have enough donors?

If you are a tiny organization with only a few hundred donors, I'd say, yes, maybe it's not quite the time to initiate a monthly giving program - yet. But, if you have a few thousand supporters, I suggest you seriously look into starting one.

It doesn't take much to do so, but it does take commitment. But, isn't that just what you're asking of your donors, anyway? Trust me: Once you are committed to generating monthly giving, you will make it work -- guaranteed!

Yes, It Works

When I got into fundraising, monthly giving was not a common thing. The organization I worked for had introduced it to the United States through the experience they had had with their European offices. People there part much more easily with their bank account information; in fact, companies put it on their bills. And most organizations there have very successful monthly giving programs because of that practice.

But, guess what? It works here as well, with some slight adjustments.

Just a few years ago, nonprofits asking their donors to commit to regular gifts were few and far between. But now, electric, gas, and phone companies, among many others, have joined the practice, because they all see its tremendous advantages: having money come in on a regular basis without additional data-entry. It's time that more nonprofit organizations joined the movement as well.

How, It Works

First, for those who are not familiar with monthly giving: it's a very simple commitment that the donor makes to have a specific amount taken out of their bank account (via electronic funds transfer -- EFT), or from their credit card on a regular basis (typically monthly). There is no renewal needed. It keeps on going until the donor cancels or changes his or her account. Many organizations also offer a monthly statement program, where they send reminders (statements) to their donors.

Offer Options .

Ideally, you'd like to offer the automatic option only. If this were Europe, I'd say: "go ahead, it will work." However, in the US, it's wiser to also offer the "bill me" (monthly statement) option. It then depends on your communications plan to find ways to make the process the least labor-intensive for your development department.

The beauty of the monthly statements option is that you can regularly communicate to donors why their monthly commitment is so important to your organization, and you can ask them for an additional gift for a particular purpose as well.

.But Push for Automatic Giving

But, it does not end there. I recommend immediately converting those statement monthlies to automatic givers. If you develop very specific quantifiable reasons, they will convert -- a few percent at a time. You can start the minute you send them their thank-you for joining the monthly giving program. And you can ask them to convert each subsequent month. Try collecting testimonials from other donors who have already started giving automatically via EFT or credit card, and use them to convince others. You'd be amazed how well it can work!

Ask, and Ask Again

I always recommend asking for an additional gift from monthly givers, and guess what?  It still works like a charm.  You see, for most organizations, appeals are their way to communicate with donors, and monthly donors want to continue to receive those updates.  Time and again, they prove that they will give if they are asked.  Please do acknowledge in a simple way that you realize they are already giving their monthly gift, and that you appreciate any additional support.

Keep It Simple

Monthly giving can be easy or difficult, depending on how you look at it. It's important to keep the program simple. It can be as simple as a variation on the giving option on your Web site (recurring versus one-time). It can be a simple variation on the thank-you letter reply slip. Later, you can do mailing inserts, or variations, and telemarketing -- all very successful ways to acquire monthly givers.

No matter how you start, do stay committed as an organization. Once the donor makes that commitment, he or she in essence becomes a very special donor, and needs to be treated like one -- as he or she can be with you for a very long time. It's important to make sure the whole organization (and I mean the whole organization, from the people opening the mail to the CEO) understands this. It's always a long-term commitment, but it will also have tremendously positive results!

A Case Study

An organization I work for has a very successful monthly giving program. About 20% of their donor base is on it. They have come up with a wonderful name for their monthly givers, and they're able to give them a lot of recognition in communications through their newsletter and otherwise.

They were looking to expand the program further, and convert more of their statement monthlies to automatic givers.

They have an aggressive direct mail plan, with appeals going out about every three weeks -- so adding an additional appeal just to acquire monthly givers did not seem to be the wisest choice. Rather, to grow their monthly givers, we introduced a few small changes to their communications plan.

We first introduced a monthly giving ask in every thank-you letter, both to new donors and to existing donors. They were able to convert 1% to 2% to monthly giving this way, and generate a healthy response in single donations as well.

Then we tested a conversion ask in a monthly statement, and reviewed the positive and potential negative impact. Their typical response rate was 70%; it did not seem to be hurt by the conversion ask that converted some 3% of those asked to automatic givers. We now have a conversion ask in every statement -- but we do alternate the way we ask.

We also tested acquiring new monthly donors via a very small but targeted segment who received a monthly giving ask plus a single donation ask as the last out.

We offered all three options: Bank, credit card or check statement and some 3% of the target group (those donors who received the ask) joined the program with only a 10% drop in single donations for that group. (Note: there is typically a drop of 20% to 50% in single donations if you ask for monthly giving in an appeal. That drop is always offset by the long-term income generated by the monthly donors).

Finally, we have also successfully acquired new monthly donors through telemarketing, and we continue to focus on retention and upgrades.

About Erica Waasdorp
Erica Waasdorp, is vice president of Fundraising at DMW Worldwide, LLC. She has extensive experience running monthly giving programs, previously at an international nonprofit, and now with her clients at DMW. Erica can be reached at 774-773-1200 or via
e-mail at ewaasdorp@dmwdirect.com. Visit DMW on the Web at www.dmwdirect.com.