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Do You Support Monthly Giving?

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You may know I’m a huge promoter of monthly giving. Why? Because it’s a great way to engage your small annual fund donors and increase your donor retention rates.

And as a recent statistic showed, sustainer giving is indeed growing, especially online. Last year, 20% of online giving came from monthly donors (aka sustainers, recurring donors; source – Blackbaud 2017 Luminate Benchmarks).

Needless to say, the interest in monthly giving has increased. Over the past few weeks, I’ve talked to many executive directors, development directors, donor relations and data-entry folks about their monthly giving programs. Some were just starting out; others were a bit further ahead. Every organization’s monthly donor size is different, simply because of the way they’ve grown their programs.

One animal rescue organization I spoke to was very successful. They already had 100 monthly donors out of 800 donors. That’s fantastic! It was generating some $28,000 a year. And they keep promoting it and growing it.

Some organizations are still hesitant though, and I’m frankly puzzled by that. Yes, there is one problem when it comes to monthly donors: expiring and declining credit cards. So yes, you will have to follow-up and maybe follow-up some more. But isn’t that what you’re also supposed to be doing with your other donors?

One arts organization had ten monthly donors and they “just didn’t think they had the resources to follow up on these ten monthly donors, so they didn’t think the program was worth growing!”

WHAT???? You cannot make one phone call a month to get this wonderful donor, who can be expected to make an average gift of $24 a month, $288 a year, for many years to come? And who’s going to be six times more likely to leave you in their will? You may wish to rethink your staff and fundraising motivation overall!

And here’s another sad case study. A human service organization’s executive director told me they wanted to grow their monthly donor program and he wanted some help doing it.

They have some 500 sustainers, worth more than $500,000!!, so very high average gifts. But, because they’re limiting recruitment by in person requests, they only grow by about 40 donors a year.

The bigger concern was that in the past few months alone, they lost 25 monthly donors. That’s more than half of the number they brought in last year! If this continues, the program will quickly deteriorate!

There’s a difference between hard and soft monthly donor cancellations

When I asked what the reason was for the cancellations, they indicated that many donors told them they just couldn’t manage continuing at this level. This is considered a ‘hard’ cancel, but there is an easy fix.

If you talk to your donor, why not offer them to continue giving monthly but at a lower level? At least that way you continue receiving some funds instead of ZERO. Just the fact that the donor calls you is a great opportunity to ‘negotiate.’

Then I asked some questions about the processes they use to reach out to donors whose card expired or declined. I call them ‘soft’ cancels. It’s important to remember that the donor did not call you to cancel or change their monthly commitment. The donor wants the gifts to continue but they simply don’t remember they have to give you their updated card information. You’re looking at 4% to 5% of your cards that can expire once a month so it’s important to have your processes in place and be ready to jump on fixing this right away.

There are a few solutions

The easiest is to implement account updater. Many donor base systems and online processors have now started offering this. What happens is that the card doesn’t go through but then in the back end, it’s hit against this huge database with updated card information, all tokenized and PCI-compliant. If it then finds the donor’s card, it’ll update the information and process the gift.

I highly recommend that you ask if that’s something that can be added to the process. You can catch some 25% to 30% of those ‘pesky’ credit card expirations or declines so they’ll continue to be processed automatically.

I also recommend that you try processing your cards multiple times in a row, ideally up to three months. Because there’s a timing issue, the second time, the account updater may find the information. So, two or three months typically helps.

This organization is not able to implement account updater for a few months, so we had to look at other options.  In their current system, they can see that the credit card is expiring a month ahead of time, so they can be proactive.

They send one email. Then they make one phone call ‘if they have time’ and they started sending a text message. All are aimed at getting the donor to call in with updated information. They do not offer a link to an online ‘renewal’ page.

The reality is that so many people may not be able to call during the day so just offering the option to update the credit card information by calling is limiting.  Finally, a letter was only sent after they tried the email and phone and text, so you’re now looking at a month later.

There were clearly some improvements to be made to the processes, simply by adding some additional messaging. I recommended sending a letter out right away with a reply form and reply envelope, send an email out right away and make that call right away. And then do a second round of this two weeks later! You must make it easy for the donor to reach you. You really must pull out all the stops. This donor is worth quite a bit of money to your organization.

I’ve developed a Monthly Donor Retention Play Book, that you can download for Free right here. It has sample templates and some approaches to customize for your organization.

Staff can limit monthly donor growth

For this human service organization, the bad news was that the staff was very “reluctant to try anything new.” Never mind when I offered a few ideas to grow the program. They became extremely hesitant.

“Oh, I don’t think we want to handle more than 500 monthly donors! It’s too much.”

WHAT?????? Wait, didn’t the Executive Director just tell me you wanted to grow again?  Just do the math!

So, this is a HUGE problem if you have internal staff who will balk at every suggestion or is simply not willing to manage your monthly donors, with the occasional follow-ups needed, I recommend finding someone else who is willing to keep the existing and bring in new sustainers.

You’re not doing your donors or your program a favor if you rely on someone who is not committed to your monthly donors.

You’re preventing future growth, so please ensure that whomever is handling your monthly donor program totally understands the tremendous power and is willing to do whatever it takes to grow the program to the next amazing level.

I’m hopeful that this doesn’t happen in your organization!

You’re asking your donors to commit to giving monthly for a long time. So, it’s crucial to have someone in charge of your monthly donor program who is even more COMMITTED to it.

Your donor will love you for it and your organization will really thrive with many monthly donors to demonstrate their tremendous power.

So, let me leave you with one final statistic: 300 monthly donors can generate between $87,000 and $100,000 a year! How powerful is that?

Originally posted by ADRP in April, 2018 edition of The Hub.

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