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Benevolence, good will and philanthropy are honorable principles to
adhere to and run by, but when bills start amassing, a nonprofit or
charitable organization will not be excused from payment despite its
inherent noble ideals and objectives. To make certain that all expenses
will be paid - to ensure that its programs and services will remain in
operation indefinitely - any nonprofit and/or charitable group must
raise revenues on a consistent basis. Indeed, fundraising is so
important that organizations often contract with professional
fundraising firms to best determine how to continuously fill their
coffers.
In Post-September 11th America, the task of obtaining financial support
has grown increasingly more difficult. As our economy remains in flux -
as so many of our citizens continue to experience personal money woes -
the act of providing largesse itself becomes jeopardized.
Moreover, when tragedy strikes (e.g., act of terrorism on 9/11,
Hurricane Katrina, etc.), so much of the charity shifts to "ground zero
organizations" or others providing direct relief; other nonprofits and
charities are affected and receive less support. Resources have never
been equitably distributed, and it behooves any agency to set itself
apart as perhaps the "most worthy" - at least the charity of choice in
a donor's mind. (It is a sad reality that organizations relying on
public donations do compete with one another for scarce resources.)
Consequently, nonprofit and charitable organizations need to be
business-savvy to maximize funds. Marketing must be pursued to increase
income as prospective donors may learn of the group through a variety
of sources: media, telemarketing, special events, and direct mail may
be coordinated and utilized to "spread the word." From these efforts,
people pledge and give financial assistance, building a donor base.
However, it is interesting to note that most donors give a one-time
payment and that usually represents a lifetime contribution. Some
organizations do not even call donors back at a later juncture to ask
for more money, eliminating good prospects and additional revenue.
Indeed, it is imperative for an organization to establish regular
dialogue with former donors. However, what is not apparent and
regularly practiced is to design a pledge program where individuals may
contribute on a consistent basis (e.g., every month).
Regular donations may be received with a preauthorized payment as
individuals authorize the organization to deduct money from their bank
accounts at certain time intervals. For example, an individual can
specify that he/she wants to give $100 every month, to be deducted
automatically. The funds will be transferred from the donor's account
to the organization's account, typically via an electronic fund
transfer. In the aforementioned example, the organization will have
collected $1,200 at the end of the year.
The monthly pledge program (the time frame can be altered) offers a
multitude of advantages. The following list gives eight great reasons
why a nonprofit and/or charity should implement it as soon as possible:
1. Explosive income potential - Simply ask and you may receive. Donors
may very well contribute if a direct request is made. Instead of only
receiving a one-time payment, an organization may, for example, receive
12 payments per year. Moreover, donors are likely to give more if their
total donation can be subdivided over the course of the year.
2. Convenience - New donors are attracted by the ease of making
donations. They do not have to sign and forward a check but just merely
provide authorization for automatic deductions.
3. Better rapport - The connection between the organization and donor
grows closer over time. Donors feel that they have an even more
"personal stake" in the organization's welfare, and are more apt to
volunteer time to participate in special events and other fundraising
activities.
4. Increases retention rate - Donors are more likely to stay with the
program. Long-term value studies reveal that those on preauthorized
payments will be contributing to the organization long-term, many until
their death. One person contributing $100/month for twenty years can
result in $24,000 for the nonprofit and/or charitable group!
5. Reliable source of revenue - The organization is guaranteed income
every month, which can cover a variety of monthly expenses (e.g.,
electric bills, telephone costs, etc.). The agency can budget its cash
flow accordingly.
6. Savings - Administrative costs are dramatically reduced as there is
much less paperwork. One person in the agency can easily oversee and
manage a recurring payment plan.
7. Claiming Share of Resources - An organization that wishes to stake
its claim to limited resources and financial reserves must make certain
that individuals join its preauthorized payments plan, rather than one
for a competitor. If donors participate in another agency's recurring
payment plan, they may not be willing or able to join your program's
plan.
8. Simplicity - It is very easy to establish a preauthorized plan
arrangement. A donor fills out a simple form stipulating that he/she
authorizes a transfer of money to an organization on a monthly basis.
An electronic fund transfer then takes place with the assistance of a
payment processing company.
In light of the numerous advantages of a recurring payment plan, the
operative question does not center on whether a nonprofit or charity
should adopt it, but "Why have they not done so thus far?" Any
organization that is in the business of fundraising (which applies to
all nonprofit and charitable groups) must avail itself to preauthorized
payments and pledge to do so with expedience! |