According to the folks who make Donor Perfect, the fundraising software, 28% of donors say they would probably or definitely consider making recurring donations if this method of giving was offered. So why not offer it? Here are seven reasons to start a monthly giving program.
But first, a definition. A monthly giving program, also called a preauthorized giving program or electronic funds transfer (EFT), is a program in which donors authorize a non-profit organization to withdraw a specified amount of money from the donor’s bank account or credit on the same day each month.
Here are seven advantages of operating a monthly giving program.
1. Boost income. In studies conducted by Harvey McKinnon, the guru of monthly giving, donors generally give at least 100% more money once they sign up for a monthly giving program. In some cases, the rise is even more dramatic-up to 1,200% higher.
2. Build better relationships. Monthly giving programs draw donors closer to your organization. Monthly donors become some of the best people to approach for special events, and they are most likely to bequeath money to your organization in their wills.
3. Donors will give longer. Says McKinnon, “The drop-off rate is so low-usually two to eight percent per year-that many of these donors will continue giving a decade or longer after they first sign up. Once a donor agrees to participate, it’s much easier for them to continue than to drop off. To lapse, they must not only decide to cancel, but also notify you (which provides an opportunity to encourage them to continue). In short, people keep giving because of one of the most powerful forces in human history-inertia.”
4. Predictable revenue. Monthly giving revenue is predictable, guaranteeing you a minimum level of cash flow every month.
5. Lower costs. Monthly giving lowers your fundraising costs by saving on solicitation mailings, pledge reminders and check processing.
6. Income growth. Your income will grow over time by gradually building your base of preauthorized donors and periodically encouraging existing donors to increase their monthly commitment.
7. Convenience. Monthly giving is convenient or you and your donors. No checks to write, no reminders needed, and the elimination of time and money wasted on mail and phone solicitations.