“Compound interest is the eighth wonder of the world,” Albert Einstein purportedly said.
He could well have been talking about monthly donors!
For the past several years, momentum behind monthly giving programs has been steadily growing. And with good reason …
Monthly donors (sometimes called sustainers) can provide a steady, predictable stream of revenue for the organization. These donors are typically much more loyal, with retention rates two to three times that of the overall file. As a result, the cost of raising these dollars is significantly lower.
For supporters, monthly giving provides an easy, convenient way of contributing. More importantly, it offers the opportunity to create an impact far beyond what might be expected with a single gift.
Organizations often “dip their toe” in these waters by simply including monthly giving as an the option on the donation form. (In our recent study of Kansas City charities, nearly 2/3 of the organizations included this option.) Once they experience initial success, they may begin more specific efforts to expand the program.
One of our client’s experience illustrates the benefits of implementing a more strategic approach. Initially, they simply included the monthly option. Five years ago, about 2% of online donors gave monthly and their gifts represented about 10% of total annual revenue. Now, after more consistent promotion and outreach, the percentage of sustainers has nearly tripled and accounts for a whopping 25% of annual revenue.
• Average length of commitment (not including sustainers who just started this year) is 27 months. Some constituents have been active monthly donors for more than seven years!
• Average annual giving among these constituents is just over $225 (Barely 10% of the overall donor file achieves that level of giving in a year.)
Sound too good to be true?
It’s not. According to the M+R 2015 Benchmark, monthly revenue currently accounts for 17% of total online giving. In some sectors, it’s nearly twice that. The average monthly gift is $18.
For long-term success, a monthly giving program does require careful planning and management. But, we can go into than in another posting!