Why Smart Nonprofits Focus on Growing Monthly Giving

For at least the past five years I’ve been actively encouraging nonprofits of all stripes to begin or ramp up their monthly giving program. It made sense then. It makes even more sense now.

Why?

If there’s anything the past couple of years have taught us, you need a dependable source of income in order:

• To be able to sustain programming for problems that never go away
• To be able to weather current storms, anticipated and unanticipated, and
• To be able to plan for the future.

It turns out there’s nothing as dependable as monthly donors.

In fact, donors who give to you recurrently sustain you so well a monthly giving strategy is often called a sustainer program.

Do you deserve a group of people who will sustain you through thick and thin?

Of course you do!

But you don’t always get what you deserve – unless you make it happen.

How to Make Monthly Giving Happen

As someone poetic so eloquently put it:

“Nothing will work unless you do.”

— Maya Angelou

There are four steps to a successful monthly giving work plan:

First you must decide monthly giving is a priority.

It shouldn’t be just an “add-on” or “nice to have” strategy. You must make it a core part of your annual giving acquisition and retention program.

Find some reasons to persuade your boss or board here and here.

Second, you must put a plan in writing to hold yourself accountable.

The more publicly you commit, the more likely you are to follow through. This is a tried-and-tested principle of psychology and neuroscience, and it works for donors too!

For your written plan you’ll need goals (why you’re doing this), measurable objectives (how you’ll do this), strategies (what you’ll do) and tactics (when and who will do this).

You can grab some strategic suggestions for your building your monthly giving plan here and here.

Third, you must promote your program.

It’s imperative to make it clear, from the donor perspective, why giving this way is super easy and a win/win/win – for the donor, your organization, and the community who relies on you for dependable support.

Fourth, you must consistently steward your donors.

Your objective is to assure these sustainers feel good enough to continue – and even increase – their giving. Don’t make the mistake of thanking them only when they make the original commitment. Send them a brief, monthly story or quick snapshot of someone/something their gift made possible. You’ve got a built-in reason to communicate with them on a regular basis; take advantage of it!

Why Now is the Time to Supercharge Monthly Giving

I recently tuned into a webinar with Deb Ashmore, Blackbaud Principal Analytics consultant. She shared the fact sustainer donors have been growing by leaps and bounds over the past five years or so – even before the pandemic years when recurring giving was at a peak. And this is true across most sectors (with the exception of animal welfare). [You can find some of the key takeaways here.]

Monthly donors are trending across almost all sectors

Based on Blackbaud’s research, here is some relevant data:

• Between 2017 and 2021 there was a 44% increase in the number of recurring donors.
• 67% of charities saw an increase in the number of donors giving monthly.
• 78% of charities saw an increase in the number of dollars contributed annually by recurring donors.
• Revenue from recurring donors accounted for 29% of giving in 2021 vs. 18% in 2017.

New donor acquisition trends show the time is ripe

New donors are easier to acquire when something happens to motivate new giving. This happened in 2017 due to a confluence of factors such as the changing presidential administration; natural disasters, and manmade disasters. New donor gifts then dipped a bit, but in 2020 they trended up again due to the pandemic. By 2021 new donor acquisition had surpassed 2017.

NOTE: Some sectors saw new donor acquisition decrease. This was particularly true for organizations relying on face-to-face street or door-to-door canvassing (on average accounting for 57% of all new sustainers). This strategy was disrupted during the pandemic. Organizations faring the best during the disruption were those who pivoted to greater digital email, ads, and other web channels. Some did well by increasing their use of direct response television. If this is you, it may be time for a pivot.

Are you wondering what percentage of new donors went on to make sustainer gifts?

2020 was the peak at 12%; it was 11% in 2021.  Ashton found this interesting, and promising, because historically crisis donors have not generally converted, or come on, as monthly. This differs for larger organization with 20,000+ donors vs. small to medium-sized charities. My hunch is the larger organizations see greater success because they consciously build a plan and devlote more resources to developing and sustaining monthly donors.  There is NO reason you can’t take this lesson to heart! Meanwhile…

• For large charities, two-thirds of all sustainer donors begin that way.
• For small to medium charities, monthly donor programs rely more on conversions.

New donor conversions to recurring donors

In years with plenty of reactionary giving, like 2017 to 2021, there are a lot of donors to convert. What are you doing to assure you don’t waste your new donors?

• From 2020 to 2021 conversion to monthly giving increased from 31% to 38%
• 2017 to 2018 conversion to monthly giving increased from 31% to 35%
• 61% of nonprofits saw an increase in conversions from 2020 to 2021
• Digital efforts account for the largest share of growth, with most growth in email and digital asks
• Conversion generally happens within the first 30 days of acquisition. Generally the ask is built into a new donor welcome letter or email.

New donor retention trends: one-time vs. recurring

The data speaks for itself. Over the past three years, per Blackbaud research, the following was true:

• For single gift acquired donors, retention rates were flat. This was; steady with prior years.
• For sustainer acquired donors, 61% acquired in 2020 were still giving 13 months after making their first gift. And it turns out donors acquired through non canvassing channels (i.e., digital) were retained at 68% — about 20 % points higher than face-to-face. So, if you’ve done a lot of street fundraising in the past, this may be a reason to pivot.

Monthly Donor Long-Term Donor Value is Increasing

Blackbaud’s research found those making sustainer gifts for three years or more have retention rates of 97-98%! This compares favorably with results from the Fundraising Effectiveness Project, which show sustainer retention at 90%. Note that were single-gift, ongoing (not first-time) donors, retention is still hovering around just 65%. So you can see converting folks to monthly can have a big positive hit on the ultimate long-term value of your overall database.

The average donor lifetime value of those acquired as sustainers increased from 2017 to 2021 to $620 – more than three times the average $201 lifetime value for those acquired as single gift donors. Overall revenue from retained monthly donors increased by 117% over the same period.

What’s Next?

It’s clear early investments in sustainers helps you weather uncertainty. Organizations with existing strong monthly giving programs weathered the past five years well.

It’s also clear you can upgrade existing monthly donors during periods of exceptional need. Your job is simply to make the case for why that extra gift is needed now. Don’t expect monthly donors to make this decision without a little prodding.

It’s equally clear you can acquire passionate, loyal sustainers during emergencies. If you bring them on as sustainers, they’re likely to stick with you longer and give more money over their lifetime. Take this little silver lining during our troubled times, and seize the day!

Want More Help Growing Donor Revenue Through Retention?

Get my Donor Retention and Gratitude Playbook. You’ll get 6 separate companion guides (at a bargain if you buy the bundle)!  Or you can purchase them individually. Taken together, they are a complete Donor Retention ‘Bible’ — everything you need to raise more money by keeping your current donors and increasing their average gift!

Seriously, folks who’ve purchased the Playbook tell me they refer to it again and again. It’s filled with hands-on, practical information garnered from my 30+ years working in the nonprofit trenches. You’ll get lots of ready-to-use samples and templates. Plus there are goodies added from my 10+ years as a coach and consultant with myriad nonprofits. This stuff works for everyone!

I promise if you read these E-Guides, and put the recommended strategies into action, you’ll keep more donors and raise more dollars. As with all Clairification products, this comes with a 30-day, no-questions-asked, 100% refund guarantee. You can’t lose.

Photo by Tom Parsons on Unsplash