November 21, 2022
Nonprofit Technology & Fundraising Blog
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If there is one fundraising strategy that you commit to this year, make it to set up and grow your monthly giving program. There is no better way to retain your existing donors, gain sustainable revenue, increase your donor lifetime value, and upgrade annual giving amounts. Let’s explore how to measure your monthly giving program’s impact against these metrics.
Every fundraiser needs to grow the annual giving amounts of their donors. There are two main ways to do this. You can attract more donors to support your cause or work to increase the amount each donor gives. A monthly giving program is one of the best ways to boost annual giving because it tackles both of these methods at once. Monthly donors give more and are retained better (more on that later). Our data shows that monthly giving donors donate over 7X more than one-time donors. Monthly donors give $360/year (median), while a one-time donor’s median value is only $50. A Monthly Giving Program is an effortless way for donors to upgrade their annual giving amounts.
DonorPerfect’s Monthly Giving Dashboard helps you measure and track your monthly giving amounts. Use the Monthly Giving Amounts tile to gauge how well your monthly giving program performs by tracking the total funds raised through your monthly giving program and your average monthly gift.
Timely and predictable, monthly gifts empower your organization to accurately budget for the resources you need to accomplish specific tasks and goals. The more monthly donors you have, the more dollars you can dedicate to both your current and future initiatives.Using the data mentioned in the previous section, let’s track the impact that monthly donors have on revenue. According to our data, the current median of a one-time gift is $50. The current median of a monthly donor gift is $30 a month, or $360 a year. Converting 100 one-time donations to monthly contributions pays huge dividends! In the example below, you’d have a sustainable monthly income of $3,000 per month from your 100 converted donors.
|Number of Gifts||One-Time Donors $50)||Monthly Donors ($360)|
|100||$5000 annually or $416 per month*||$36,000 annually or $3,000 per month|
*For one-time donors, it is unlikely that income will be the same amount each month since a large percentage of one-time gifts come in during specific times of the year, such as during year-end.
The more donors that participate in your monthly program, the higher your revenue will be. Track how many donors gave a monthly gift and the percentage of your active donors converted to monthly givers on the Monthly Giving Donors tile in DonorPerfect’s Monthly Giving Dashboard.
Every nonprofit wants long-term supporters who continue to donate to their cause. Organizations that create and manage their monthly giving programs through DonorPerfect have an average monthly donor retention rate of 85%. Compare that with the 28% average retention rate of one-time donors, and you’ll understand why a monthly giving program helps you keep your existing donors. Having donors join your monthly giving program means you’ll have to spend less time acquiring new donors.
DonorPerfect’s Comprehensive Donor Revenue Analysis Report makes it easy to find detailed information about your donor retention, including the number of retained donors, your donor retention rate, and revenue retention rate plus metrics like average donor lifetime and lifetime donor value. Track how these rates improve as your monthly giving program grows.
One of the best ways to predict your organization’s health is to track your donors’ lifetime value. Lifetime value (LTV) estimates how much revenue you expect a donor to contribute during their giving relationship with your organization. It takes into account how long a donor stays with your nonprofit and how often they contribute. The more regularly a donor contributes, the greater their value to your organization. Our data shows that a monthly donor’s median lifetime value is $2,400, while a one-time donor’s lifetime value is a mere $70. This is 34x more fundraising dollars per donor. When you factor in the 85% monthly donor retention rate, that’s an average lifetime of over 6 1/2 years.
Track the value of your monthly giving program using the Monthly Giving Financial Report. This report provides a count of all monthly gifts, monthly donors, how much each donor has paid on their monthly pledge, and predicts each monthly donor’s annual value.
We’ve covered just a few of the ways to measure your monthly giving program’s impact on your fundraising strategy today. How will you know that your monthly giving program is successful? For more ideas on how to set up your monthly giving program in DonorPerfect and track your program’s progress over time, visit the Monthly Giving Success Hub.