MONTHLY GIVING: HIGHER RETENTION, HIGHER LIFETIME VALUE
Episode aired September 2, 2021: Monthly Giving
Does your organization have a monthly giving program? If not why not??? Harvey McKinnon, the man who wrote the book on the topic, will teach you all about it and why your charity should offer monthly giving. In this episode Harvey discusses
- what stops nonprofits from offering monthly giving to donors
- advance prep before setting up a monthly giving program
- who to target with a monthly giving ask
- what channels to use to market it
- the advantages of monthly giving and
- what separates successful from not successful nonprofits.
Below you can listen, watch or read this podcast episode.
Ephraim: Welcome to this edition of the Your Weekly Dose of Nonprofit podcast, the podcast that delivers actionable items you can implement at your organization right away. I’m your host Ephraim Gopin of 1832 Communications. Today I’m really happy to have with us a leading fundraising expert, Harvey McKinnon. Harvey, how you doing today?
Harvey: Great, thank you.
Ephraim: Excellent. Let’s introduce you to our listeners, watchers and readers.
Harvey McKinnon is recognized as one of north America’s leading fundraising experts. He’s the author of five acclaimed books and is the co-author of the number one international bestseller, The Power of Giving: How giving back enriches us all. Harvey’s considered a world leader on monthly giving. His most recent publication on the topic was 2020’s How to Create Lifelong Donors Through Monthly Giving. His best-selling fundraising book, The 11 Questions Every Donor Asks, is used as a major gift training manual in fundraising departments throughout the U.S. and Canada, from the United Way to the San Diego Zoo.
Harvey is a highly rated trainer and has taught fundraising to thousands of nonprofit staff. He’s a frequent speaker at conferences, including AFP International, AFP Congress, IFC, CAGP, AFP chapters, National Storytelling Conference and many more. He has developed strategy and has been an activist on causes raising from anti-apartheid work, anti-gambling expansion, ending violence against women to anti-tobacco activism and environmental campaigns, among many many others. Before founding Harvey McKinnon Associates in 1989, Harvey spent 10 years with Oxfam Canada. His company raises money for dozens of nonprofits in Canada and the U.S.
Fixation On Large Gifts
In today’s episode we’re going to discuss monthly giving. Let’s dive right in. Harvey, why do so many nonprofits not offer monthly giving? Is everyone just fixated on the big gifts and paying less attention to the smaller ones?
Harvey: Well it’s a great question and I’ve trained a lot of organizations over the years at conferences and even though I’ve written books on the subject and spoken at conferences, people will get really excited at the conference and will go back to their organization and a year later I’ll see them and they say my boss wouldn’t let me do this. He thinks we have to focus on major gifts. So a lot of it is the internal culture in an organization where it depends what the higher-ups want to spend money on.
Also, another core thing is that for some organizations it’s a cash flow issue. A lot of people, up until covid hit us, we’re recruiting the majority of their monthly donors from face-to-face fundraising and face-to-face requires a lot of investment of capital and it’s actually not something everybody can do.
But I’d say for almost any organization, you could start small. If you’ve got a donor base, there’s absolutely no reason to avoid putting on a reply form… and by the way, one of the best ways you can give is monthly and the cost there is virtually nothing. If you’re doing mail, because it’s not adding any extra cost of the mail. Similarly for your website. If you just give people the option of one-time gift or monthly gift, it’s not going to cost you anything. So I think it’s mostly a cultural issue because I know lots of small charities with very few donors have started these programs, in obscure areas with not many potential donors and they still work, because monthly donors give way more money.
Preparing A Monthly Giving Program
Ephraim: Okay. So today’s actionable item, once we’re talking about getting that started. Please tell us three things an organization must prepare in advance before encouraging supporters or prospects to become monthly givers.
Harvey: Well I think there’s a lot of things that they can prepare. But the first thing would be just to make sure you have the technology set up, so you can capture this information on your database. Every system can pretty much do it but you just have to make sure that’s set up. The systems with your bank or credit cards, they can actually process gifts. Again, it’s something that organizations are doing already but it’s essential because most people will give you either by pre-authorized checking as it’s called in Canada or EFT in the states and credit cards and these days more likely going to be credit cards. So those are the kind of two bases that you need to have for sure.
Then it’s essentially figuring out the systems internally. How do we process gifts so it’s smooth and we have the proper stewardship. I’ve seen organizations set up programs and they don’t thank a donor for three months and that’s the kiss of death. So those are the kinds of core things that organizations have to do. And then you just have to have the rationale as to why it’s a good thing for people to show up. That’s a bonus number four. So then good copy and good design make a real difference there.
Monthly Giving vs. Other Types Of Gifts
Ephraim: Excellent. In terms of the actual ask, how does monthly giving differ from let’s say an annual giving campaign or other fundraising campaigns?
Harvey: With an annual giving campaign, say an organization has ten thousand donors, there’s a pretty good chance over time you convert a thousand of them, maybe 1500 to monthly giving. But the majority people will not sign up to your organization as a monthly donor almost for sure. They feel comfortable giving gifts and some of them are giving thousand-dollar gifts. I write a few of those and some organizations I’d rather write that than give them $83 a month. It just feels greater, more satisfaction. So I think there are donors like that too.
The other thing is that it’s a process over time. So if you’re not investing a lot of money, you’re picking up one or two percent a year, because most people don’t want to do this. I’m on about eight or nine programs. It’s going to be really hard to get me on another program. So even your donors that are already on programs might not jump to your program, even if they prefer you to another organization because they were asked by the other organization first. So those are I think some of the issues.
Which Donors To Turn To For Monthly Giving
Ephraim: Okay and who should a nonprofit turn to then when embarking on a monthly giving campaign?
Harvey: I guess the ideal is the people internally who get some training on this, who read the books and the publications and the e-newsletters etc. that collect more information. If you’re using consultants, find the consultants with expertise in the area. Daniel Levitin’s got a great book called ‘Successful Aging’ where he talks about pattern recognition and the reality is people who are elders in the field, who’ve been around, they’ve seen all the problems and they’ve seen a lot of the solutions and younger people, however smart they are, don’t necessarily have that experience. So it may be that you find the people working at the agencies where they’ve done mail and phone and the face-to-face agencies and then check out their event, their clients, to see what is most likely going to work for you. But there is a lot of free information out there. My goal is to promote this as much as possible because I think it’s great for donors, because they give more money and it’s great for organizations because they literally accomplish much more because the donors give you on average three times more per year than the annual giving donors.
Ephraim: Okay, I’ll ask the follow-up question. That’s who can help you. Within your donor base, are there specific donors organizations should be looking at to target for a monthly giving campaign?
Harvey: Always and each organization will be slightly different. But a lot of organizations, a lot of our clients have success going back to new donors. So the first time they come in the organization with a single gift, sometimes they’re testing you, sometimes they’re inspired by the message however it came, what channel it came from and then when we go back and ask them, we get a really decent percentage because we ask them to deepen their commitment. Here’s a convenient way to give.
The second thing is people who are on your file for a long time or a multi-gift in a year donors. Again, you’ve got a great reason to go back to them because you know they’re not just ‘I’m going to send this one donation a year’ donor. They’re motivated by a number of different messages that you send out to them. So they tend to be some of the better groups. But my overall feeling is, you use all the channels you have, all the time you promote this in newsletters, it’s on your website, special events you mention it, because as we know the old rule of 27- which probably now is the rule of 54- people have to hear about something many times before they make that buying decision and they miss most messages. So again it’s a drip drip attitude towards mentioning it and making sure that they know it’s convenient and easy and really helps the cause.
Retention And Lifetime Value
Ephraim: Excellent. So I think you touched on it a minute ago but I just want you to expand on this: Does monthly giving help with retention and donor lifetime value?
Harvey: Absolutely. We’ve done study after study after study, data analysis on a large number of organizations in pretty much every sector and in every single one of them, people who convert to monthly giving are worth more for two reasons: One is they give more money on an annual basis, on average and secondly, they stay for many more years. So that combination is around seven to twenty times, depending on organization value.
Now to be fair, because I’m a numbers guy, some of the people who join the program might have a deeper commitment to your cause than the people just giving one time a year. So maybe that’s happening but the overall numbers are clear. When you get people to go from single gift to monthly gift, they give more money and they stay way longer and that varies by channel. Face-to-face donors obviously have a higher drop-off than a mail or a phone canvas donor.
Let’s Learn More About Harvey
Ephraim: Excellent. Okay, important for anybody who’s listening or watching to hear that. And then like Harvey said, ask ask ask on every channel that you possibly can. Let’s move on to the lightning round and learn more about you. What got you started on your nonprofit career path?
Harvey: Well I was a shy university student. A friend sucked me into going to an anti-apartheid meeting where there was only five people, plus the people from southern Africa and I was shocked to see what was going on in southern Africa. Apartheid and the racism. So despite knowing nothing about this, I set up an anti-apartheid group on campus and started bringing in films and ended up meeting the people at Oxfam who were doing the same kind of work. Because I was a grad student and obviously not doing my thesis, I was volunteering 20, 30 hours a week for Oxfam. Ended up on their national board when I was 23. Later they hired me. Shows shoddy board practices possibly. But anyway, I stayed there for a decade and because I got to do every kind of fundraising, it was an incredible learning experience. And it’s really kind of social justice issues that motivated me to do this, stay in the field and I feel unbelievably lucky.
Ephraim: Amazing story. So you’ve been in this field for decades now. If there’s one thing you could shake up in the nonprofit world, what would it be?
Harvey: The list is so long. I think probably… I sat on an environmental foundations board in the states and we invest in a lot of charities over the years. 100 million dollars easily and we did it effectively a test. And the key thing that distinguished not successful organizations from successful organizations was the leadership. But it is so clear with the right leaders, even with less money they could do more, have a greater impact, grow the organization. So I think we need a lot more leadership training.
One of the things that’s happened in the last number of years and it’s probably even… I should hate to say we have people coming out of the corporate world to take over nonprofits and frequently they don’t understand the mentality of the people working nonprofits, the culture, how fundraising works. It doesn’t mean they’re not smart, talented, skilled people. But they often tend to focus on branding and marketing, as opposed to stewardship and fundraising. It’s a cultural thing, where when we work with clients, where the communications/marketing/branding people start taking control of fundraising, uniformly it’s a disaster. So I see that as a leadership issue. But on the other hand, if you have power to control- because communications and marketing and branding should be at the service of raising money- which helps you accomplish the mission.
And if a quick story… I was speaking at the AFP in Boston a couple years ago. 300 people in the crowd and somebody near the end of the session raised their hand and said, Have you ever had a communications person mess up your fundraising? And I said well, let me crowdsource this. So I ask people, have you ever had a communications person mess up your fundraising and virtually every hand went up instantly, which never happens. But there’s a woman sitting at a table near the front who didn’t raise her hand. I said to her, so how did you escape this? And she said well, I’m in communications. So even though I think it’s the leadership but the communication thing drives me kind of crazy as somebody who knows, because we do testing. We all do testing as fundraisers. They don’t do testing and they’re not numbers driven and so I’ve got a long list. We could do a whole session of complaining. I still love the sector. Still love the sector.
Ephraim: It’s all good. Listen, that one on leadership is an excellent point to bring up. Among your many talents, you’ve produced award-winning documentaries. Why did you decide to do a biography of William Shatner?
Harvey: The reason being because most of the social issue doc and their social issues documented women fighting AIDS in Africa to the environmental crisis on the Black Sea. But William Shatner was somebody who was active as an environmentalist, as well as everything we know him for and so a friend of his, Michael Tobias, who’s just a great director- he’s done a hundred films, written over 30 books. My wife says smartest person I’ve ever met- approached me because Shatner is a Canadian and so there’s this… our national broadcaster, CBC, had a series of famous Canadians and we had done one on David Suzuki, the globally famous environmentalist and when Michael approached me, I said sure, let’s do William Shatner. So that’s why we did it and I got to go to Star Trek conventions. I didn’t even know- I went to the first time all four captains at the time were together and I didn’t even know there were four captains. So I’m slightly embarrassed by that.
Ephraim: Perks of the job You’re also a published author. What’s the hardest part of writing a book?
Harvey: Finishing it. There’s a famous quote- might be F. Scoff Fitzgerald but it probably isn’t- I love. He says, I hate to write. I love to have written. I like starting books and I’ve got a couple actually in process at different stages. But the core thing for any author I think and I’ve been on the Writer’s Festival Board for the last decade, so I talked to a lot of authors, is it’s finishing it. But I’ve done it a few times, so hopefully I’ll do a few more.
Ephraim: Excellent. Your website bio claims that you know and I’m quoting 17,659 jokes. Now I’m not going to ask why you’ve been keeping a calculation but I would like to know what source has provided you with the most jokes.
Harvey: Well I actually collect joke books. I probably have possibly a hundred different joke books. I literally buy almost every joke book I’ve ever seen. I’ve been doing that for decades and I read them for fun and also in the old days, I literally knew thousands of jokes. You could mention a word, I could come up with a joke. That slipped slightly. I also have hundreds of books on satire and humor, so it’s a hobby. I was a story editor on an award-winning comedy series one year in Canada, writing satirical pieces for different publications.
Ephraim: That’s an interesting hobby. I love that. I absolutely love it. That’s pretty cool actually. Lastly we will turn the table. You get to ask me one surprise question. I have no idea what’s coming. Go ahead.
Harvey: Well my question is, you had the opportunity because you lived in Canada, to stay in Canada. Why did you go and move to Israel?
Ephraim: I finished high school in Toronto and I came to Israel for a year of post-high school learning and I fell in love with the country and I basically have been here for the last 30 plus years, outside of three years in New York to do my BA. But basically fell in love, loved the people, loved the country, loved everything about it. I do however have very strong roots and strong ties to Canada. I still got tons of friends there, two siblings who live in Toronto. So when I come in in the summers, usually I visit. I make sure I spend some time in Toronto. It is my second favorite city in North America.
Harvey: But the winter, you don’t even have snow anymore.
Ephraim: No but I miss snow, because I’m a new England guy and I grew up also in Toronto. So for me I love winter. We just here in Jerusalem had snow a couple weeks ago and it’s very exciting, because we rarely get it but I miss the whole cold weather, seven feet of snow, driving on ice, shoveling. I know everybody who’s listening must think I’m nuts but that’s the stuff I actually miss about winter. Thank you Harvey very much for appearing on the podcast. You can learn more about Harvey’s work on his website at HarveyMcKinnon.com I also encourage you to connect with him on LinkedIn. Was a pleasure having you here as a guest today. Thanks!
Harvey: Pleasure. Thank you so much.
Ephraim: Have a good day.
Harvey: Thanks. It was fun. Thank you.