Monthly giving 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.

In a report titled “Myths of Monthly Donor Programs” Canadian consultant Harvey McKinnon talks about how easy it is for a nonprofit to lose annual donors to those organizations with more aggressive monthly donor campaigns.

“When a donor joins a monthly donor club it has consequences. She may even start reducing her single gift donations to other nonprofits — perhaps yours! — because she has committed a greater share of her charitable funds through monthly donor programs.

Here’s an example to illustrate the point:

A donor, Ms. Cindy Williams, regularly gives a total of $1,000 a year to 10 charities, or $100 each. That’s her limit. Then she’s successfully recruited by two of the charities into $25/month sustainer programs. This means she’ll give them $600 (or 60 percent of her annual giving), leaving only $400 for the other eight charities. If Cindy splits the remaining money evenly, the nonprofits will see their donations decline to one $50 gift each. This is a reduction of 50 percent. Or Cindy may even decide that she’ll give $100 to four nonprofits and stop giving to four others. She could choose a combination of the above scenarios.

But whatever decisions Cindy makes, the clear winners are the nonprofits with the monthly donor programs. They each upgraded her annual giving by 300 percent. And the clear losers are the remaining eight charities.”

Click here to read the report in its entirety.

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