A Monthly Giving Program, sometimes called a pledge program or a “Sustainer Program”, is a program under which members or donors are asked to commit to contributing a specific amount on a monthly, or quarterly, basis. It is much like the traditional church “tithing” programs, where churchgoers commit to putting a certain amount in the collection plate each week.

Why have a Monthly Giving Program

A monthly giving program is a logical extension of an existing individual membership or donor program. It is an excellent strategy for raising general operating support. Because participants commit to giving a monthly or quarterly amount, and to having it automatically deducted from their bank account, or charged to their credit card, the income generated is predictable and reliable. For participants in the program, it can increase renewal rates to as high as 90%+ and double, or even triple, annual giving. It is a particularly appropriate for hard economic times, or for groups serving low-income communities or young people, because it allows people with little money to make significant contribution without feeling it too much.

Requirements for a Successful Program

In order to run a successful monthly giving program, your organization must have:

• A compelling mission, effectively communicated
• A commitment to thanking contributors regularly and keeping them informed
• A base of committed, loyal individual members or donors (the more, the better)
• Adequate time and resources to manage the program
• Software which will allow you to record and track monthly payments or a service provider who will handle this for you
• A commitment from staff and board to build the program
• The ability to accept credit card charges, electronic funds transfers, or both

Best Prospects

Particularly good prospects for monthly giving include:

• Board Members
• New Members
• Members who regularly give several gifts, or who send in unsolicited gifts
• Members who are already using their credit card to charge gifts

Research shows that new members, those whose first gift has been received within the last 6 months, are nearly twice as responsive to a monthly giving request as those who have already renewed their membership. The optimal time to solicit these new members for monthly giving is 3-4 months after they join.

Getting Started

Once you have decided that you want to start a monthly giving program, you will need to market it to your supporters. It is important to make your monthly givers feel special, so you should come up with a catchy name, such as “Friends of Little River”, “ River Advocates”, “River Defenders”, or something similar. While there are various ways to publicize such a program, including personal requests, events, articles in your newsletter, etc., two methods stand out: telephone requests and invitation letters (see the “Samples” section for a sample letter).

In your telephone request or invitation letter announcing the new giving option, you should include the following:

1. a compelling reason for joining the program
2. benefits to the giver
3. suggested amounts of monthly pledges
4. methods of payment

1. A Compelling Reason for Joining

Here you should clearly articulate your own special mission and its importance. You could also point out that the program reduces the need for mail/paper, and ultimately saves trees, and that by joining, participants will be helping to create a reliable source of support, but the organization’s good work is definitely the number one reason people will join.

2. Benefits to the Giver

Stress that by joining the program, they will be supporting and empowering the organization to do the important work it does so well. Additional benefits might include no more renewal mailings and the ease of giving. Some organizations use a premium, such as a book, hat, calendar, or map, as a further incentive to join.

3. Suggested Amounts

Most experts say that monthly pledges of $5 to $25 work best, with averages usually between $10 and $15/ month. It is probably a good idea to provide an “other” option on your response form where people can write in an amount and to specify a minimum monthly amount that will allow you to recoup your costs (somewhere between $5 and $10/month).

4. Methods of Payment

To work well, monthly giving programs must be kept simple. The downfall of many programs has been trying to send out monthly reminders and track participants who only send their checks sporadically. Most experts recommend limiting methods of payment to two-- credit cards and/or electronic funds transfer.

1. Credit Cards
   If you are not already allowing your members to pay their dues and other charges by credit card, you will need to set up this option with a local bank. The bank usually takes between 3 and 5% of every transaction made by credit card, but this amount will be more than offset by better cash flow and reliability in pledge fullfillment. In addition, you will gain a few donors who would not have otherwise joined, or who will give more by credit card than they would have given by check. If you are short on administrative staff to handle this work, there are service providers who will do it for you (see “Resources” section at the end of this article).
2. Electronic FundsTransfer (EFT)
   Electronic funds transfer involves sending funds from one bank account to another via a computer network. We all use EFT these days, whether through an automated teller machine at the local supermarket, or with direct deposit of our paycheck into our bank account. EFT can also be used by your members to pay their monthly (or quarterly) pledges to your organization.

It is probably best to set this up through a service provider, as it can be a costly and complicated process, and using a provider will also save you time and hassle in processing monthly gifts. Charges to set up a program start at about $400, and the cost to maintain it ranges from $30-$100/month thereafter.

The advantage of EFT is that it has a better renewal rate than credit cards, since credit card charges are often declined during the holiday season, and people change their cards, or let them expire, much more frequently than their bank accounts. The disadvantage is that in the U.S., contributors are more comfortable with using credit cards than electronic funds transfer, so it may be easier to get them to join using credit cards. One option is to start your program using the credit card method, and then expand to EFT once you have a core group you can convert.

Whether you are recruiting by phone or by mail, you must provide your prospects with an enrollment form and a return envelope. A sample enrollment form appears in the “Samples” section..

Response rates to monthly giving solicitations vary widely. On telephone requests to new members, a 10% response rate is not unusual. The response to an invitation letter is more likely to be from 2-5%.

Acknowledging Monthly Givers

Like all donors, monthly givers must be thanked for their gifts. It is important to send them an acknowledgement/thank you when they first join the program. Most experts feel that it is not necessary to thank them for each monthly gift. A once-a-year thank-you, summarizing your achievements and letting them know that unless you hear otherwise, you will renew their commitment for another year (or perhaps asking them to consider upgrading their commitment to a higher amount) is probably enough, provided that they are also receiving regular information about your activities through a newsletter, bulletin, or some other means. You should also list these givers in your Annual Report.

Once you have introduced the program, you should continue to market it forcefully to your members by giving them the option of joining in other mailings (special appeals, renewals, annual reports), including information about the program on your web site, and encouraging people to join at your events. An occasional article in your newsletter about an individual who has decided to make this commitment is also a good strategy. You may want to repeat the invitation letter whenever you have a large influx of new members, since they appear to be among the best prospects for this program. Your longterm goal should probably be to enroll between 5% and 10% of your regular members in the program.

A monthly giving programs is an effective way to increase your renewal rate and upgrade giving among your regular members or donors. A good program will take time and resources to build, but in the long run, will help you develop a stable and diversified base of support.

We gratefully acknowledge the ideas and suggestions for this article provided by Harvey McKinnon, Amy O’Connor, Ellis Robinson, and Andy Robinson