Automated giving programs are on the rise as a convenient way to boost monthly charitable nonprofit revenues. Sometimes called recurring givers, donors who choose this method can give the same amount at regular intervals, usually through credit card transfers or automated account deductions. Here are some strategies to create or increase monthly automated giving programs.
But first, consider the additional work required:
Educate your team and donors about automated giving. Most consumers understand online shopping. They want recurring giving to be just as easy — compared to writing a check every month. But you must convince them that your online giving program is secure and that the funds still go toward your mission. This may require additional marketing and communications to encourage automated recurring gifts. Your development team must also explore various online giving tools in order to make an informed recommendation and final selection.
Update donor information regularly. Just as you update addresses, automated giving requires recordkeeping and bank account confirmations for automated withdrawals as well as the safekeeping of credit card numbers and expiration dates. Such recordkeeping is more time consuming than for one-time gifts because credit card numbers often change and expire. Also, make sure that the third-party automated giving tool follows stringent standards for protecting donor data and privacy. What is its track record for security and customer service? Will it automatically alert donors if their card number has expired or needs updating?
Communicate with recurring donors. Don’t ignore them. As some of your most consistent donors, they will appreciate learning how their money is helping your mission, especially during traditionally slow giving periods. Make a point to encourage recurring gifts. Invite them to tell others about the option and how easy it is for giving and documentation.
With these items in mind, here are ways to encourage automated giving:
Make it convenient. By setting up an automated online giving tool, it’s easy to promote your recurring giving program and encourage donors to use it. They can opt in indefinitely or you could offer a one-, two- or three-year duration with the option to renew after that time. Whether through credit card transfer or account withdrawal, the transaction is regular and seamless; donors don’t have to think about it and your organization receives regular income.
Demonstrate the multiplier effect. By giving a little at a time, donors like to see how their donation grows over six months, a year or more. Also, recurring donors are more likely to give one-time gifts above and beyond their recurring gifts. Nonprofit organizations need to stay in touch with recurring donors to showcase different ways to give in addition to their recurring gifts.
Note that online giving tools will often have processing fees associated with them, and the amount of those fees per transaction depend on your choice of merchant account or third-party processor. Make sure that your organization explores the best tool for the size of your organization and expected volume of recurring gifts. This will mitigate the fees incurred. Also, keep in mind that such fees can be covered by your donors in addition to their gift, and they can be tax-deductible.
LvHJ’s business advisory services team can guide your use of an automated giving program. Talk to us about ways to manage recurring gifts and account for them appropriately on a monthly or quarterly basis. Services can include bookkeeping for our non-attest clients as well as cash flow and budgeting analysis and planning.