Promoting Recurring Gifts
The “subscription economy” has grown significantly in recent years. Led by online retailers and media companies like Amazon, Blue Apron, and Netflix, many customers are choosing to pay for products and services in monthly installments rather than in one lump sum. According to Forbes, subscription services grew more than 100 percent each year over the past five years. Customers for these services are most likely to be 25–44 years old and have annual incomes of $50,000 to $100,000.
A subscription service model is attractive to companies and organizations for several reasons. For one thing, it can reduce the overall purchase cost, making it easier for new and less affluent customers to join. Once acquired, those customers tend to renew at higher rates and ultimately spend more money. Data shows that monthly subscription models generate higher revenue per customer compared to annual payment models.
Increased revenue is a big reason why colleges, universities, and independent schools are also starting to highlight the benefits of monthly giving among their alumni donors. Some alumni may still prefer to make a single, large gift once a year, but having a recurring monthly giving option can be particularly attractive to younger alumni who are just starting out in their careers and are not yet ready to make big commitments.
If you’re looking to increase the number of monthly donors at your institution, here are some ways you can make it easier for your alumni to participate:
- Make the recurring giving option visible. Donors are more likely to take advantage of the opportunity to contribute monthly if they know about it when they are making their gift. Include monthly giving as a clear option in your traditional giving channels, such as on your website, on your online giving form, and in direct mail remittances.
- Think outside the box to increase awareness. Look for nontraditional ways to advertise the option to your constituents. Consider flyers at alumni events, ads in the alumni magazine, or prompts in student calling scripts. Smith College promoted monthly giving through its print magazine and as a “first ask” for its phonathon. This effort helped increase the number of monthly gift donors by nearly 60 percent.
- Use a monthly option to move donors up the giving ladder. Do the math for your community. Make sure that potential donors understand how recurring giving can add up over the course of a year and possibly grant them membership in your leadership gift club. Consider making it part of the first ask to younger alumni who are celebrating a reunion or to consistent donors who have not increased their gifts over time.
- Care for those donors who have already taken advantage of the monthly option. More than half of advancement professionals polled report that they don’t provide a very positive experience for recurring monthly gift donors, so consider adding special stewardship opportunities to show your appreciation for their ongoing support. Launching a special gift society for recurring donors or setting aside staff time to personally thank them via phone calls or handwritten notes can help donors feel valued for their unique investment.
Making it easy for alumni to support your institution is one of the best ways to create long-term donors. And although a variety of giving options are currently available, making sure that donors are aware of a monthly option is increasingly important in an era when flexibility matters. Finding ways to make this option convenient and attractive for all alumni and donors will go a long way toward helping your institution acquire new supporters, increase retention rates, and generate higher giving levels across the board.
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