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Downes Murray International News

You're fired until you have a solid monthly giving programme

Erica Waasdorp from Holland, president of A Direct Solution, and author of Monthly Giving: The Sleeping Giant shares her opinion on monthly giving programmes.

One of the things that absolutely floors me is the fact that so many organisations still don’t have a monthly giving programme.  

Monthly donors can be considered “major donors on an instalment plan”. Those unending monthly contributions add up. It stuns me that some organisations that spend hundreds of thousands on their direct response programmes still hesitate about monthly giving. 

It’s a mystery to me why organisations that are literally sitting on a gold mine, are turning away heaps of money! You will not know which organisations these are, but I hope you’ll learn from some of their mistakes.

Terrible Monthly Donor Decision 1:
We don’t have a monthly giving programme, because we can’t afford to pay someone to run it! Organisation X has literally millions of email names and thousands of direct mail names. And yet, they continue to not put any money into developing their many small donors into monthly donors. They offer monthly giving as a giving option on their website . . . but are not promoting it.
 

Let’s look at what we see in the market place right now:

  • 21% of baby boomers already give monthly (and baby boomers will be the backbone of giving until 2035, according to expert analyst Jeff Brooks);
  • And it’s trickled down: 4% of donors to tiny organisations are already giving monthly. So, let’s do a simple calculation on the back of a napkin here:

You plug in the number of donors who’ve given in the last 12 months. Multiply that number by the conversion percentage you’re thinking you might reach: say, 1%.  

Then multiply that times your average monthly gift (which currently stands at $20 a month) times 12. 

If you had 100 000 donors, using this illustration, you’d raise $240 000 from just those 1 000 (1%) who converted to monthly giving. 

I’d say you should be able to hire several people for that programme and all you need to get started is one! 

You could reach your goal of 1% in less than a month if you only focused on it, I can pretty much promise. So what are you waiting for?  

Terrible Monthly Donor Decision 2:
Letting your finance person run your fundraising department. 

Believe me, this is really scary stuff! This is a real story and I just keep shaking my head. It’s amazing this organisation is still in business. Huge organisation Y mails millions of pieces a year and has several hundreds of thousands of direct mail names and thousands of email names.  

They have the recurring giving option set up on their website. So, the donor says yes, make this gift recurring, fills out her credit card information and hits submit and expects her monthly donations to start. 

Well, whomever it was that was wearing the finance hat and should have never been hired to be in that department, told the fundraising department that this particular activity “does not count as a monthly donor commitment”. And the worst part is, the fundraising department listened. They were told to call this donor and ask her for her credit card information again and only then is she considered a monthly donor. 

Well guess what? Of course you’re not going to reach everybody! And those you do reach will be totally put off. Why would I give you my credit card information over the phone if I just did it online? What part of my donor intent did you not get? So, this organisation just lost the few monthly donors they could have had. Set up your monthly donor option online and process the donor’s monthly gift. That’s what she wants you to do!

Terrible Monthly Donor Decision 3:
Being too greedy and asking too high. Organisation Z was interested in monthly giving and they had the process for monthly giving in place. So far, so good. But then, they started getting greedy and got some bad advice (not by us, mind you!). Someone had told them that they should start at the same level of the typical donor’s gift, $50. So, they sent an appeal asking for $50 a month (and no alternatives).

The appeal did poorly and they couldn’t understand why donors weren’t joining the programme. When we looked at it, that was the first thing we noticed. Never make the first ask the same as the average gift. That’s simply too high. You can’t expect a donor to go from $50 a month to $600 a year.

 Rather, start by using one third of that amount or go even lower. The key with monthly donor acquisition is to generate monthly donors and upgrade them later. Think about it this way, if you ask the $50 donor for $15 a month, you’ve now upgraded her to $180 a year and you just increased their retention rate multifold. Sounds pretty good in my book!
 
With acknowledgement to Tom Ahern.
Visit http://aherncomm.com

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