Do you find that every time you look at the attrition level of your donor file you break into a cold sweat? Here's a solution to your problems.
Monthly donor plans are one of the best ways to reduce donor attrition and to upgrade an individual’s giving level. In the next decade you will find that charities will increasingly look towards monthly donor programs to increase their income.

But you want to be one of the first for a very simple reason: Most people will only join two to four monthly donor clubs. And they will not necessarily choose their favorite causes. They will often join programs based on who asks them first.

Most philanthropically minded individuals will give gifts to four to ten charities a year. But they will rarely join more two to four as a monthly donor. I base this on extensive experience in Canada, the U.S. and Europe.

When a donor joins a monthly donor club it has consequences. They may even start reducing their single gift donations to other non-profits –perhaps yours!-- because she has committed a greater share of her charitable funds through monthly donor programs.

Here’s an example to help illustrate my point.

A donor, Ms. Cindy Williams, regularly gives a total of $1,000 a year to ten charities, or $100 each. That’s her limit. Then she’s successfully recruited by two of the charities into $25/month donor program. This means that she will give them $600 (or sixty per cent of her annual giving) leaving only $400 for the other eight charities. If Cindy splits the remaining money evenly, the non-profits will see their donations decline to one $50 gift each. This is a reduction of 50%. Or, Cindy may even decide that she’ll give $100 to four non-profits and stop giving to four others. She could choose a combination of the above scenarios. But whatever decisions she makes, the clear winners are the non-profits who invited her to join a monthly program. They each upgraded Cindy’s annual giving by 300%.

Even if a non-profit continues to receive a $100 annual donation from Cindy, it's lost. That's because the other two have dramatically increased their share of Cindy’s annual giving. And she’s not likely going to join a third at $25 a month level.

That’s why you need to approach your donors first and soon. Multiply this by hundreds or thousands of individuals, and you see the potential loss to your donor income.

Also, Cindy is far more likely to lapse if she is giving annual gifts than if she is on a monthly donor program.

What’s more, there is a good chance that our imaginary donor did not select her two favorite charities, and then join their monthly programs. Most likely, she responded to the two charities who asked her first. Donors have told me they often have joined organizations that are not at the top of their list of priorities but they continue to give because they have “made a commitment.”

We know that in planned giving, the organizations who ask who get the legacy. And if you do not offer a Monthly Giving Program to your donors, you can bet that many of your competitors will do so. That could cost you a lot.

© Harvey McKinnon

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