Taking Your Monthly Giving Program to the Next Level
By Mary Toropov
These days, more and more nonprofits have monthly giving programs of one shape or another in place. Most development professionals worth their salt have integrated this strategy into their fundraising plans. They know the advantages, and they see the potential for vastly improved donor retention and for taking pressure off the renewal process. A predictable, ongoing stream of cash from donors whose annual commitment automatically renews? Higher average annual gifts and greater lifetime value than other donors? What’s not to like?
I come to the topic of sustainers largely from a public TV and radio background. Almost 20 years ago, while working at a major-market station, I helped launch one of the first branded, coordinated sustainer programs in public media. Partnering with PBS Development, I evangelized the concept to stations across the country. Gradually, it took hold, and in recent years, stations have embraced the concept in a big way. Many have built their sustainer files quickly, largely through on-air pledge drives, from under 10 percent up to, for a few, more than 40 percent of their members.
This has been a real sea change for these stations’ development operations. Some have done a great job of changing with the tides. However, as a development consultant, it distresses me to see how many nonprofit organizations are witnessing a good portion of those valuable donors, and their dependable revenue, drift right back out to sea. It’s a danger faced by any nonprofit with a burgeoning recurring-gift program.
What’s at the root of the problem?
Perhaps some complacency from knowing that these donors are automatically sticking with the organization, so a stretched-too-thin staff can focus its attention on more at-risk funding. Yet, if one is prioritizing time properly, who better to focus on than the donors with the highest potential lifetime value?
Successful fundraising programs dedicate a staff person, a portion of a staff person or a team to their recurring givers. No matter the size of the staff, you must set aside time to check in regularly on your monthly donor program. Review processing issues, donor comments, consistency of messaging and anything that affects your success. A focus on constant improvement of back-end systems and internal communications pays off.
As with any donors, figuring out who these monthly donors are and what motivates them is key to retaining them and getting the most out of the relationship. Invest in a survey or focus group if you need to. I have found that recurring givers to public media generally fall into two categories: those who are driven by convenience, and investors in the long-term success of the organization. The former are attracted to the ease of giving their information once and knowing they don’t have to worry about membership renewal dates. They also like the ease of spreading their annual gifts out in affordable chunks. The investors want to show their commitment, as well as see demonstrable change occur through the nonprofit’s work. They care about the financial health of the organization, and they want to see the impact of their support. Of course, for some, both motivators come into play.
Either way, having a stewardship and communication plan in place that addresses these mind-sets is vital. Immediately establish a relationship with a thank-you that tells the monthly donor he or she is special and appreciated. Investors need to hear, on a regular basis, that they are valued and how their support is making a difference. Bimonthly newsletters, monthly emails and occasional letters from the CEO are all great ways to communicate impact. Donors need to be updated on the financial picture at least once a year — a letter from the chief financial officer, perhaps accompanied by the annual report, or a summary with a pie chart can fit the bill and make donors feel like true stakeholders. Make sure the importance of individual giving, and if possible recurring donations, is highlighted.
What about the convenience-driven sustainers?
The same stewardship plan can apply. It’s an opportunity to treat them like the donors you want them to be, to reinforce your case in a focused way and to cultivate their interest. With these folks, more of whom are likely to be new to giving, the initial thank-you is an important touchpoint. A welcome kit that communicates the nature of the recurring giving program helps set expectations appropriately and gives donors contact information for the staff specialist who will handle their questions and requests.
The most significant factor for convenience-driven donors is to make sure the program stays convenient! Inevitably, credit card expiration dates pass, debit card payments bounce, electronic funds transfer (EFT) account numbers change, etc. If the nonprofit is not staying on top of these issues and proactively communicating with the donors, the automatic payments will suddenly dry up. Establishing internal structures for attending to file hygiene is critical to maintaining cash flow. Your dedicated staffer(s) should follow up on missed payments due to declined or expired cards promptly, with a trifecta of letters, emails and phone calls. Some organizations also use card updater services like ProPay and Litle to automatically update credit card information.
Of course, from a retention standpoint, acquiring or migrating monthly donors to EFT is the best bet. Highlight EFT as the preferred giving method wherever possible, and encourage donors to switch when contacting them about expiring credit cards. Some nonprofits even do special EFT conversion appeal mailings to all their credit card sustainers — especially in the wake of large credit card fraud scandals, when many cards are reissued. Sometimes, in these cases, drawing the attention of donors who thinks they are giving automatically can be challenging — employing “red flags” in outer envelope copy and
email subject lines, such as “ATTENTION — interruption of your monthly gifts” is helpful and can be especially helpful here.
Remember, if it’s too difficult for the convenience-motivated donors to update their information and stay connected, they will not bother to try again. Before you know it, the tide quickly starts eroding the monthly giving file! So make sure your website has an online form for donors to easily update their information. And consider mobile messaging as an even more immediate vehicle.
Some organizations brand their monthly giving clubs with a name and logo, and even a special purpose for their support. Special events, premiums and other benefits can be offered. While these methods can be effective, they are not essential. If budgets are tight and resources limited, it’s best to focus them on communications that touch each monthly donor and communicate the impact of monthly support. Another wasted opportunity occurs when development staffers feel reluctant to “bother” monthly givers with additional appeals, leaving revenue on the table. Just as with stewardship, you should thoughtfully create an annual solicitation plan for your recurring givers.
Don’t be afraid to ask for additional gifts and upgrades — many of these donors were previously your best multiple gift givers. Plan one or two integrated upgrade campaigns per year, utilizing mail, phone, email and mobile giving. If a donor has recently joined the program or upgraded his or her monthly giving, that donor can be excluded from the current campaign.
Send one or two additional gift appeals per year as well, especially at important times like year-end. Monthly donors want to participate in major campaigns and feel like they are a part of the organization’s success. Because their giving is automatic, they can lose the conscious satisfaction that philanthropy affords — and will enjoy making an extra gift or two.
Unfortunately, complainers often make themselves heard, and fundraising staffers can worry that they might be offending all their monthly donors with yet another ask. Give recognition in the appeal that your sustainers are important members of the family, accommodate those few who want to opt out and ask. The results will surprise you. Calibrate the frequency based on results, but don’t wait too long between appeals. If, for instance, a year goes by before another ask is made, the organization can end up with less annual revenue from a previously loyal donor who gave multiple annual gifts. More backsliding.
It takes heart, care and consistent attention to craft a successful recurring-gift program.
We are getting better at acquiring and converting significant portions of our donor files to this convenient method for making a more lasting impact on our missions. This is a great leap and should set us up for greater success — unless it is done without thinking about where we’ll be and what we’ll do when we land! It’s time to adjust to the “new normal” and its attendant pros and cons. The potential for increasing revenue is tremendous, once we realize that a new business model is required to properly steward, retain and upgrade these donors.