The Holy Grail of Fundraising

And how to not screw it up

I can’t stop thinking about what happened to me with the university whose lack of foresight and customer service resulted in the end of my monthly donations to them. After receiving a great deal of feedback from readers, it’s become clear to me that, as expected, I’m just one of many donors who have had this type of experience with a nonprofit that we support.

Despite all data to the contrary, nonprofits just don’t seem to be “getting it”.

For comparison purposes, let’s look at the for-profit world. Recurring revenue has been the big thing in business for years. Online, recurring revenue has been one of the metrics for companies be able to go public—or be acquired — and mint billionaires.

In the nonprofit world, recurring revenue is the Holy Grail of fundraising. Or is it? In order of importance, where do fundraisers put donors who give their credit card number to be charged monthly for, well, forever (unless they get cranky and stop.)

It’s clear that, in a world of “major donors” and big galas and Giving Tuesday and legacy programs, regular monthly donors rank don’t rank so high on the laundry list of donor categories and programs. But they should!

Consider this:

  • Recurring (monthly) donors give 440% more to a charity over their lifetime than one-time donors. The average lifetime financial return from a recurring donor is approx $800, compared with approx $150/annually from a one-time donor.

  • 52% of Millennials are more likely to give monthly vs. a one-time donation.

  • Monthly donors continue to donate to a specific organization for much longer than other donors. In fact, after one year, 80% of monthly donors continue their giving to a particular organization, and after five years, 95% continue.

  • Since many organizations take in more donations at the end of the calendar year, resource allocation is typically skewed to Q4. Recurring monthly donors, though, don’t care about the end of the year — their donations come through, day in and day out, all year long.

  • As more organizations develop recurring monthly donation programs, they will be able to more closely match costs to revenue. Budgets and resource allocations can be “smoothed out” by recurring monthly donations.

Knowing all this, why is it that only 9% of recurring monthly donors are acknowledged after month three? (Even a quarterly update would be nice…)

My guess is that the nonprofits are worried that “reminding” a donor that their credit card is still on file, being charged every month, will make them think twice about continuing to donate. That’s like saying that getting a copy of my cable/internet bill every month will make me want to move to another provider. Hmmm…. doesn’t work that way, folks.

Another thought as to why these monthly programs aren’t the “darling” of fundraising organizations is that they aren’t big ticket. Tried and true, but not big individual numbers. Buildings aren’t likely to be named for someone who gives $50/month for a decade. So….resources aren’t put towards these programs.

Think about anything you have an ongoing subscription for. How often do you change it to a competitor? Almost never, for most people.

There is no reason why a monthly donation program — just like a subscription program — shouldn’t be a standard part of any nonprofit’s fundraising efforts. If you don’t have such a program now, start it immediately. It’s not so hard, and it will create a revenue stream that could help your organization in myriad way. Millennial donors, anyone?

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- Lisa