In the past few years, subscription services have become all the rage. From Netflix and Spotify to Amazon Prime and other SAAS (software as a service) businesses, pay per month has become very popular. Millennials also seem to much prefer this approach for buying services online. Nonprofits should consider collecting monthly or annual contributions for a number of reasons.
1) Builds a Sense of Community
By offering a membership and including exclusive member benefits, you can help build a sense of community for your cause. Member perks can include voting rights at your AGM, discounts from selected local merchants, and insider information via a newsletter or member meetings. A regular donor will also form a much stronger bond with your organization than a one-time donor and become a much better advocate for your cause. As a nonprofit, it is important to follow up regularly with these subscription donors, and not only thank them but provide updates on what projects their dollars are going towards specifically.
2) Low Friction Without the Annual Ask
By collecting funds monthly or annually, you avoid the time and effort of having to ask every year for that donation. This is much more efficient that relying on rounding up volunteers and staff to create an annual or monthly marketing campaign or doing door to door visits to generate donations. You also can avoid “donation sticker shock” of a larger lump sum being debited from your donors bank accounts.
3) Creates An Annuity of Payments
What would you rather receive, a one-time annual fee of $100 or a $10 fee per month for a year? Well $10 per month not only adds up to more ($120 vs $100) but it is a lot easier for many donors to afford, and cash flow is the key to any non profit or for profit business. Also, if you are looking to fund capital projects or attract bigger donors, a regular monthly income is very important in order to secure loans from banks or creditors. Larger organizations are able to plan and execute large, long-term projects and programs because they have sizable recurring revenue streams. Donor confidence also increases with the social proof that you have a large membership base and will be around years into the future.