Automatic monthly donations or periodic giving, which one is better? Well, the answer depends on whether you’re a donor or a nonprofit organization.
This article tackles a common and important question: Which is better: automatic, monthly donations or periodic giving? The answer, unsurprisingly, is a little less clear than we’d hoped and depends on whether we’re talking about your nonprofit organization or your donors.
Generally speaking, automatic, monthly donations are great for nonprofits but less good for donors. But, there are solutions you and your nonprofit organization can implement to make automatic, monthly donations work for everyone.
We know, we know, we owe you an explanation.
The science of giving to others.
To properly dig into the question of automatic, recurring donations vs. periodic giving we need to talk briefly about the timeless argument of: can money buy happiness?
We won’t dig too deep here, but, if you’re interested, we explore the question in our article: A nonprofit’s guide to writing a thank you letter. For now, we’ll just say that yes, money can buy happiness—if you spend it on others.1
“When we tell people, ‘Hey, did you know that giving to other people can make you happy?’ most people are not blown away. They understand. They’ve had [charitable] experiences that make them happy.”1
- Michael Norton, Professor of Business Administration at Harvard Business School
Giving (time or money) has been proven to have some pretty ridiculously positive effects. Some studies even suggest that elderly people who volunteer are 44% less likely to die over a 5-year period than those who don’t.1 44% less likely to die! That’s crazy. And it’s not just some North American or Western phenomena. The positive relationship between giving and happiness exists in 88% of the world’s countries.1
Why is this information pertinent to the question of which is better: automatic, monthly donations or periodic giving? Well, giving time or money—it doesn’t matter which you give as long as you give to something you believe in—gives us a sense of purpose. So, it only makes sense that the more you give the better. Which seems like it would point towards recurring, monthly donations being a good thing for donors. Well…
Are automatic donations good for donors?
Whether or not automatic donations are good for donors depends on why they’re giving. Are your donors giving to make themselves feel good or others or both? If they’re giving to make others feel good, then automatic, recurring donations are the way to go—it’s one less thing to think about and who doesn’t want that? But, if they’re giving to make themselves feel good or they’d like someone else AND themselves to feel good, automatic donations probably aren’t the best way to go.
Automatic donations can take the thinking and feeling out of giving to others. This may not seem like a terrible thing, but, when you remove the thinking and feeling you also weaken the emotional attachment. And, if your donors don’t have an emotional attachment to your organization or cause, they might just unsubscribe the next time they audit their credit card statement.
Are automatic donations good for nonprofits?
Yes. (We will elaborate, don’t worry. But seriously, yes they are.)
Most nonprofit organizations have a lot to gain from automatic, recurring donations. Financial stability, overhead savings and the ability to plan ahead are among them. And, honestly, those are all worthy reasons to encourage donors to sign up for automatic donations.
However, a lot of nonprofits try and twist the benefits of monthly giving to make it an appealing option for the donor. And, to a certain extent, this can be true:
- It’s one less thing for the donor to think about,
- it can be easier to manage smaller, monthly contributions as opposed to one large donation around the holidays,
- and it’s easier for donors to track.2
But, the reality is, automatic donations are lot more beneficial to the nonprofit organizations who offer them.
- More money goes to your cause.2 When donors choose to give online or sign up for automatic payments instead of mailing or phoning in their donation, it saves nonprofits time and money.
- Automatic donations can also help nonprofits save on marketing. However, it might be smart to use some or all of those savings to re-invest in your current donors.
- When nonprofits know(ish) how much money is coming in, they can plan ahead.2 Hiring staff, launching new projects, applying for grants. Not needing to constantly worry quite as much about raising money frees up a lot of time to actually work on the cause you’re fighting for.
Don’t get us wrong, we’re all for automatic, monthly donations. We just think it’s important to also build relationships with your donors and remind them why they have chosen to give to your cause and that they can and should feel good about it. This will benefit your nonprofit in two ways:
- It will build an emotional attachment.
- Remind donors that they gave—reminding donors why can encourage them to talk about your organization with others.
How to build long term, emotional attachments with automatic, monthly donors.
Send an automatic thank you email to donors every month.
For automatic, monthly donors, a thank you email after every donation will reassure them that their money is actually getting to your nonprofit and remind them of the good they’re doing. And while that sounds like a simple solution, the downside is that these automatic thank yous can quickly become repetitive and, eventually, easily overlooked.
A few tricks to encourage your monthly donors to open your thank you emails:
- Personalize them with your donor’s name.
- Cycle through and refresh the subject lines.
- Add some interesting content to your thank you emails. (New blog articles, updates about your cause, information on upcoming events and fundraisers, etc.)
Send them an SMS or text just to say thanks.
A thank you text every so often can work wonders. It doesn’t (shouldn’t) need to be complicated. A quick:
“Hey [Name]! It’s [your Name] from [your nonprofit organization]. I just wanted to say a quick, but meaningful, thank you ☺️ Your generosity every month has helped us [whatever their donations helped accomplish]. Hope to see you at [Event Name] on [event date].”
will work just fine.
A hand written note.
We rarely send them to people we know and love let alone donors for the nonprofit we work at. But, even sending one letter just once a year can make a huge impact. (But try not to send it suspiciously close to the renewal of their automatic donation.)
It doesn’t have to be fancy. But, it should be personal.
Invite them to drop by your nonprofit's next event.
A quick email, SMS/text message, or card in the mail to personally invite your donors to your nonprofit’s next event (no additional donation required) will leave a big impact. It shows you appreciate their generosity and offers them a little something in return.
Giving is contagious. But only if others know you’re doing it.
The other piece of the puzzle is to acknowledge donors in a more public way. Why? Giving is contagious.3,4 So, although it’s important to keep you donor engaged via email, SMS/text message or snail mail, it’s also important to show them that they’re not alone. This is part of the reason why fundraising events and peer-to-peer campaigns are so successful: people give more if the people around them are giving.3
Feature new and longterm donors in your newsletters.
We know that many of your donors will shy away from being individually called out, but it’s worth asking. By briefly welcoming new monthly donors and publicly thanking those that have been around for a while, you’re showing your donors that they’re not alone.
Invite them to drop by your nonprofit's next event.
We know, we’ve mentioned this one already, but it’s worth another shout-out. A quick email, SMS/text message, or card in the mail to personally invite your donors to your nonprofit’s next event will have a big impact. It shows you appreciate their generosity and offers them a little something in return. (Tickets to your event.) Plus, events and peer-to-peer campaigns attract new donors and encourage current donors to give.