Our Subscription Economy
In just the past decade many software platforms have morphed into “software as a service”, otherwise known as SaaS. Compared to the old model of a larger fee paid up front to purchase software, users now essentially rent software by paying a recurring fee for access. Thus, the barrier to entry is lowered, more people are able to try out a new product, and many stick around. It just works.
This subscription model has permeated far beyond the software industry. It is likely you may be paying a monthly fee for your entertainment, financial advice, or even groceries. We are firmly entrenched within the new subscription economy.
The nonprofit sector is also finding success in a similar model: with monthly giving programs.
Monthly Giving Just Works
For many, the concept of including subscriptions within a personal budget has become the new normal. No longer is it strange to pay a small monthly fee to have fresh razor blades or our favorite coffee from a local roaster delivered to our doorsteps. The convenience factor is paramount.
Perhaps this is why more and more are buying into monthly giving programs as a way to support their favorite causes. The number of donors worldwide that are enrolled in a monthly giving program are growing, having recently passed the 45% mark. That means that soon over HALF of donors will do so in part through an automated, recurring donation.
In a recent article on the Candid Blog , Harvey McKinnon lists a handful of reasons you need a monthly giving program option for supporters. Here are a few of our favorites:
You raise more money
When supporters adopt a monthly giving service, they give 2 – 4 times more annually than if they were donating one-time gifts.
You develop a more positive relationship
Interactions can shift from continually asking for more donations to showcasing the impact a monthly giver is making.
You can rely on sustainers
The revenue stream from these programs provides a more stable and predictable income.
What’s not to love?
Helping Out Your Supporters
From a supporter’s perspective, just like an impending decision of whether to try a SaaS product, the barrier to entry for giving is lowered. Making a decision to donate $10 a month, starting with only $10 THIS month, is easier than handing over $100 right this very moment.
More importantly, the hurdle to give isn’t always just a psychological one. Sometimes a tight budget will literally prevent a would-be supporter from being able to offer a larger, one-time donation. Monthly giving is an option that can more easily be worked into an existing budget.
An Even Newer Take on Recurring Donations
Making it easier to give is a great way to spur donations from a crowd of well-intentioned advocates. Having a new, stable revenue stream is a boon to any charity. So, is there a way to further leverage the attractive aspects of monthly giving programs?
A shop-to-give program can provide a similarly high value and stable revenue stream to a nonprofit, and this can be in ADDITION to whatever supporters are already giving out of their own pockets, monthly or otherwise. This is because the funding being generated for a charity through these programs is not coming from the supporters’ own pockets. Empowering current donors, volunteers, and even corporate partners to generate a recurring revenue stream with a low friction activity, such as piggybacking on a daily online activity they are doing anyway, is an obvious choice to amplify what a current audience is able to do without over-extending themselves.
Amazon Smile is a well-known example of a shop-to-give program, wherein Amazon generates donations for a shopper’s chosen charity when purchases are made. These donations are 1/2% of an eligible purchase price on their site.
Givevia is a philanthropic focused platform that is retailer agnostic, allowing online shoppers to generate funding from thousands of brands and retailers they shop. The percentage of donation generated per purchase varies per retailer, but it’s much higher at around 5% per retailer on average.
Can you imagine having 5% of a purchase total donated to your nonprofit every time a supporter books flights for their family vacation? Or orders their monthly household items at their favorite superstore? Or upgrades their smartphone from their carrier? The combined power of all online shopping activity from a supporter base can lead to significant funding streams for NPOs.
Start Now, Retain Tomorrow
If your organization hasn’t jumped on the recurring giving program bandwagon yet, consider starting soon. Shop-to-give programs are typically free and only require promotion to your audience to get the ball rolling. Standard monthly donation programs may need some back-end systems in place to handle data tracking, card or ACH processing and all the upkeep that entails, but once setup these systems are fairly automated. If you take other recurring donations such as food for a pantry, certain logistics will need tweaked to morph these into monthly programs, but you may find them more efficient in the long run.
Any way you cut it, the ROI on any such recurring program is typically high and worth the upfront effort.
Keep in mind that in the long term these programs have the potential to improve the retention of your base as you strengthen supporter relationships with continuous positive feedback. You’re able to be more selective with your asks and spend more time spelling out a donor’s impact over time to equate what those dollars mean for your shared goal. Having a stronger connective tissue between supporters and your cause is always the right thing to do.
References:  2018 Global Trends in Giving Report  How to Create Lifelong Donors through Monthly Giving by Harvey McKinnon