Paypal vs Integrated Donation form

2 New Ways to Calculate the Value of Monthly Donors!

By Erica Waasdorp, A Direct Solution

If you’ve been following me for a while, you know I’m always looking for ways to help you convince your boss or board that it’s time to put a bit of time into generating more monthly donors.

Time is really all it takes now, because the tools are already there. You just have to make the monthly gift option easy to find and start directing your donors to go there. You may also know that I always recommend annualizing the value of monthly gifts.

That’s why I’m very excited about these two new FREE tools, developed by Sumac, that can help you establish the extra value and life-time value from monthly donors:

The first calculator is called the monthly giving benefit calculator. It takes how much money you raised last year and how many one-time gifts. It then calculates how much more you could raise if you convert your donors to give monthly. It’s a very powerful tool!

Let’s look at one example:
Say, last year you raised $100,000 from one-time gifts. You had 1,500 donors make an average gift of $58. If you could convert 5% of those donors to give monthly at $20 a month, you not only tripled the value of those donors, you would have raised an additional $13,000+!

The second calculator shows the lifetime value of monthly donors. If we know that the average monthly donor gives monthly between 5 to 7 years, this is a really helpful way to look at the long-term revenue.

Say if you’re just starting out and you think you can generate 50 donors who give $20 a month. The lifetime value after 6 years is $72,000 gross revenue!

Note, while this calculator doesn’t take monthly donor retention into account, we thought it best to start with the gross revenue, because of course you’re always trying to strive for 100% retention. Depending upon how your monthly donors join and the way they pay, you can typically expect retention rates between 75 to 95%. Once you have your life-time value for the next 6 years, that’s an easy calculation to add.

So, take a minute, plug in your numbers and look at your organization’s monthly donor potential. Then make the commitment to start asking for monthly gifts and build something into your plan. Even if it’s four emails a year. Even if it’s one appeal a year. Even if it’s an ask in the welcome series. Even if it’s asking in a thank you call to your lower end donors.

Nowadays the opportunities to ask for monthly gifts are endless, but the key is, you must START somewhere. Now you have the tools to calculate what the impact is of doing exactly that!

About the Author: Erica Waasdorp is the author of “Monthly Giving: The Sleeping Giant” and is the President of A Direct Solution. She works with non-profit clients all over the country as well as internationally, helping them with their appeals, monthly giving, grant writing, and PR.

Try out the Monthly Giving Calculators to see the benefits for yourself!
Monthly Giving Calculator

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