Nonprofit Fundraising – Get Paid with Recurring Payments
Despite the fact that benevolence, good will, and philanthropy are wonderful values to stick to and run a business by, when debts start piling up, a nonprofit or charitable organization will not be exempt from payment, despite the fact that it was established to further great ideas and aims. It is necessary for every nonprofit and/or philanthropic organization to raise funds on a constant basis in order to ensure that all expenses are covered, and that its programs and services are maintained permanently. Indeed, fundraising is so vital that many organizations hire professional fundraising agencies to help them find the most effective ways to keep their coffers topped up on a consistent basis.
In the aftermath of September 11th, the challenge of securing financial assistance has become increasingly complex. As long as our economy is in flux – and as long as so many of our countrymen continue to struggle with personal financial difficulties – the act of delivering largesse itself is put in jeopardy.
On top of that, when a tragedy strikes (e.g., the terrorist attack on September 11, 2001, Hurricane Katrina, and so on), so much of the charitable resources are diverted to “ground zero organizations” or other organizations providing direct relief that other nonprofits and charities are negatively affected and receive less support. Resources have never been distributed fairly, and it is in the best interests of every organization to distinguish itself as maybe the “most worthy” – or at the very least the charity of choice in the eyes of donors. Organizations that rely on public donations do compete with one another for limited resources, which is a sad truth that must be acknowledged.
As a result, in order to maximize finances, nonprofit and charity organizations must be business-savvy as well as charitable. To increase income, marketing must be pursued because prospective donors may learn about the group from a variety of sources: media, telemarketing, special events, and direct mail can all be coordinated and utilized to “spread the word.” People pledge and donate financial aid as a result of these efforts, resulting in the development of a donor base.
However, it is worth noting that the majority of donors make a one-time payment, which typically represents a commitment for the remainder of their lives. Some organizations do not even follow up with contributors to ask for further funds at a later date, so excluding good prospects and potential revenue from the equation. A continuous conversation with past donors is, in fact, essential for any organization seeking to maintain its good standing. However, what is not obvious and is not routinely practiced is the development of a pledge program that allows individuals to donate on a consistent basis (e.g., every month).
Preauthorized payments, which allow individuals to authorize the organization to deduct money from their bank accounts at predetermined intervals, can be used to accept regular donations. For example, an individual can declare that he or she want to make a monthly donation of $100, which will be withdrawn from his or her account automatically. In most cases, the monies will be sent from the donor’s account to the organization’s account via an electronic fund transfer. After a year’s worth of fundraising, the group will have collected $1,200, according to the example above.
The monthly pledge program (the time frame can be changed) has a number of advantages over other fundraising methods. Eight compelling reasons why a nonprofit and/or charity should put it into action as soon as possible are listed below:
1. Expansive earning potential – Simply ask and you may be granted your wish. If a direct request is made, donors may very well give to the cause. Instead of getting a single payment, an organization may receive 12 payments over the course of a year, rather than just one. Furthermore, if a donor’s total donation may be divided over the course of the year, he or she is more likely to give a larger amount.
2. Convenience – New donors are drawn in by the ease with which they may make donations. They are not required to sign and forward a check, but are just required to provide authority for automatic deductions.
3. Improved rapport – As time passes, the relationship between the organization and the donor becomes stronger. Donors believe that they have an even greater “personal stake” in the organization’s success, and they are more likely to donate their time to help with special events and other fundraising initiatives as a result of this.
4.The retention rate of donors increases as a result of this. Donors are more likely to stick with the program. Long-term value studies have revealed that persons who get preauthorized payments will continue to make contributions to the organization for a long period of time, in many cases until their death. Contributing $100 each month for twenty years can result in a total of $24,000 for a nonprofit or philanthropic organization!
5.A reliable source of revenue means that the organization is assured a certain amount of money every month, which may be used to cover a variety of expenses (e.g., electric bills, telephone costs, etc.). The agency will be able to plan for its financial flow in this manner.
6. Cost savings – Administrative costs are drastically reduced as a result of the significant reduction in paperwork. A recurring payment plan can be conveniently managed and overseen by a single person within the organization.
7.A company that desires to establish a claim to limited resources and financial reserves must ensure that individuals join its preauthorized payments plan rather than one for a competitor’s preauthorized payments plan. If contributors are already enrolled in another organization’s recurring payment plan, it is possible that they will be unwilling or unable to engage in your program’s plan.
8. Ease of Establishment – Establishing a preauthorized plan arrangement is a simple process. It is as simple as filling out a short form to request a monthly transfer of funds to an organization on behalf of the donor. Afterwards, with the assistance of a payment processing business, an electronic fund transfer is completed successfully.
When one considers all the benefits that can accrue from adopting an automated recurring payment plan, the real question is not whether a nonprofit or charity should do so, but rather, “Why haven’t they done so yet?” Any organization engaged in the business of fundraising (which includes all nonprofit and philanthropic organizations) must take advantage of preauthorized payments and commit to complete the process as quickly as possible!