10 Reasons Why Small Monthly Donors Are Worth the Effort
During a recent webinar, someone asked me a question. His finance people told him: “For $5 a month, it’s really not worth the effort. The finance charges are killing us.”
This is another one of these monthly donor myths I’d like to debunk right away.
My answer of course was this: “Yes, offering the $5 a month option to donors is totally worth it!”
Here are 10 reasons why:
- You’re truly showing donor care. No gift is too small. Your donor can make a difference with an amount that’s most comfortable for them.
- You can upgrade small monthly donors to higher levels within the year. And if you do it right, one third of your monthly givers will indeed upgrade.
- Even small monthly donors can leave you in their will. A small animal rescue that’s just starting out with its monthly donors already got a $195,000 bequest from one of its small monthly donors.
- Recruitment fees for monthly donor fees are minimal. If you have an email system and you have an online donation page, you can generate monthly donors.
- The finance fees are not that high. Typically, it is 3 percent of the monthly gift plus perhaps a fee of $0.30 each. So for a $5 gift, that’s $0.45, which means you still keep $4.55, according to my calculations.
- If you annualize the value of that small monthly donor, it’s going to be $60 before fees—$54.60 after fees. Nothing to sneeze at.
- Many online systems allow the donor to pay for the fees, and some 70 percent of donors do this. You’ll end up with the full amount, so it’s a non-issue.
- The average monthly donor is $24 a month, so the $5-a-month givers are really more the outliers.
- Your response rate will go up if you ask for a lower amount. Make it easy on your donor to understand how they can make a difference with different amount options, and your donors will determine what they can afford. That’s the gift they’ll make, and that’s the gift you should be grateful for.
- Typical monthly donors stay with you for five to seven years, and sometimes even longer. Just think the loyalty factor here.
We’d all want people to make $1,000-plus gifts, but that’s just not reality. Would you stop asking donors to give gifts online just because of credit card fees? Just think, fees are now $30.30.
Of course, you’d encourage your donor to make their gift in any way possible, right? You wouldn’t do your job as a fundraiser otherwise.
Having worked with nonprofits and growing their monthly donor programs over the past 25-plus years, I’ve learned that we fundraisers sometimes have to push back a little bit to our finance folks.
Perhaps sharing this saying may be helpful. I grew up with the phrase: “Don’t look a gift horse in the mouth!” This means: Don’t’ find fault with something that has been received as a gift or favor.
Your donor is willing to make a commitment for many years. Will you deprive him or her of that joy because you’re afraid to give up a few pennies? You could be giving up a lot of future funds because of that mindset.
Erica Waasdorp is one of the leading experts on monthly giving. She is the president of A Direct Solution, a company serving nonprofit organizations with fundraising and direct marketing needs, with a focus on monthly giving and appeals. She authored "Monthly Giving: The Sleeping Giant" and "Monthly Giving Made Easy." She regularly blogs and presents on fundraising, appeals and monthly giving — in person and through webinars. She is happy to answer any questions you may have about this great way of improving retention rates for your donors.
Erica has over 30 years of experience in nonprofits and direct response. She helped the nonprofits she works with raise millions of dollars through monthly giving programs. She is also very actively supports organizations with annual fund planning and execution, ranging from copywriting, creative, lists, print and mail execution.
When she’s not working or writing, Erica can be found on the golf course (she’s a straight shooter) or quietly reading a book. And if there’s an event with a live band, she and her husband, Patrick, can be found on the dance floor. She also loves watching British drama on PBS. Erica and Patrick have two step sons and a cat, Mientje.