contribution income

In Parts 1 and 2 of this four-part series I introduced a ‘4-Step Strategy to Cure Your Current Fundraising Headache.’ Because the times we’re in are trying. Donors, however, are still giving. You can succumb to the crisis, take two aspirin every four hours for the rest of the pandemic, economic recession and period of social turmoil — or you can buckle up and put sensible fundraising strategies in place.

  1. FORWARD FACE Equilibrium: Balance your fundraising strategies
  2. FUEL the Machine: Charge your annual contribution income engine
  3. FUMES Provide Accelerant: Prepare for ‘retirement’ with future contribution income
  4. FUTURE Proof the Mission: Leave a legacy for generations to come

If your intention is to be around for the long haul, it’s time to assure you don’t sacrifice your future for the present. If you keep putting good plans and approaches ‘on pause’ you’re going to get stuck where you are. You can live your life and also prudently prepare for what’s to come.

Today it’s time to talk about future-proofing your fundraising.

FUMES Provide Accelerant

I think of ‘fume strategies’ as akin to preparing for retirement.

It’s a way to accelerate your contribution income into the future – similar to investing money in a savings account or IRA. Or to earning ongoing royalties off a book, movie or invention. Or creating a YouTube channel, then generating ongoing advertising income. It’s all oriented towards setting you up so you don’t have to live paycheck to paycheck.

These strategies generate a stream of reliable contribution income that flows into your charity while you sleep. 

Income you can count on — even when storm clouds gather and you face rainy days. It may not be enough to expand your mission or ramp up to fund emerging needs (you’ll have to actively, and specifically, fundraise for those purposes every year), but you can often survive on fumes.

One such long-term strategy, of course, is building a strong legacy program. But that’s for the more distant future, so we’ll get to that next (in Part 4). For now, let’s focus on the shorter-term kind of accelerant — the passive income you need to live on today and survive for the near tomorrow.

Pump up Monthly Giving

The most robust passive income strategy I know is securing a monthly giving commitment. 

I like to think of a monthly gift stream as ‘fumes’ from your one-time filling of your tank. You asked once, and you got enough fuel to last for 12 months! Pretty darn cool. And extraordinarily cost-effective as a strategy. 

Imagine if you had such a program in place pre-pandemic! You’d now have a steady stream of gifts you could rely upon, making planning and programming much more predictable. Sure, some folks might ask to cancel. But most folks will not. Monthly donors are loyal. In fact, retention increases from an average of 45% to 90% when you get folks enrolled in a monthly giving plan. And guess what else?

  • Even if your organization is starting from scratch, you can depend on 10% or more of your current donors immediately converting to monthly giving.
  • Your file of monthly donors can mushroom to 40- 50% or more with targeted effort.
  • A majority of monthly donors will regularly upgrade their gifts and continue to give for 10, 15, or 20 years.

Wonder what donors think of monthly giving?

People love to demonstrate consistent commitment. Here are some donor comments:

“My income last year was unpredictable. I was hesitant to give a lot over the course of the year because I didn’t know what my annual income would be. I maintained my monthly giving, but did not give to any new organizations or make incidental donations.” 

— Anonymous donor, The Burk Donor Survey, Canada

 “I ALWAYS donate when an organization I believe in asks me to give, but I think I could do a better job of actually budgeting for philanthropy. Maybe I should sign up for sustaining donations.

— Anonymous donor, The Burk Donor Survey 

Monthly giving improves my level of comfort about giving more. I know that $10 a month extra is the same as giving $120 in one lump sum…but it seems more affordable.”

— Anonymous donor, The Burk Donor Survey, Canada

I give more by making monthly, rather than year-end donations. It’s a great strategy”

— Anonymous donor, Burk Donor Survey

Use your Website Home Page to Fan the Flames

Your website home page can be an evergreen sales tool.

I like to think of a home page as a mini-base from which contribution income streams come in as ‘fumes’ from your one-time set up. When you set up your home page, were you thoughtful about assuring you aren’t hiding your need for philanthropy? Or making it seem like an afterthought?

I see too many nonprofit home pages with every menu item but the kitchen sink at the top or down the left-hand side, with “support us” or “donations” just one among myriad choices – often buried someplace in the middle, or even in a drop-down from one of the larger menu items.

You must actively ask for philanthropic support from your home page. 

You can’t simply bury your ‘donate’ action as a dropdown – one among many — on your menu bar. You have to make it stand out. Really stand out. If you make it appear donations aren’t really that important to you, they won’t be that important to prospective donors either.

If you’re serious, make it clear the success of your mission relies on philanthropy. Here are some options:

  • You can take over a piece of your homepage with a compelling message, photos or video. An example of an organization that does this amazingly effectively is Charity: Water. Here are examples from two different times of the year, each with a message tailored to that time period.

contribution income

  • You can strategically place a big, bold donate button where it’s not likely to be missed. An example of an organization that does this well is Invisible Children. The donate button in the middle is a bright green, contrasting with the rest of the page. And the additional donate button on the right-hand side stays with you, even as you scroll down the page.

  • You can use a lightbox to highlight a current campaign. Here’s an example from the San Francisco Marin Food Bank.

contribution income

  • You can make it your goal to capture visitors’ email addresses so you can mail them information and appeals in the future. Not everyone visiting your home page is coming to donate. But everyone is coming to learn more. It’s your job to take advantage of this. If you set this up right, you’ll be able to collect new prospect names, and even donations, all while you sleep. Include a big, noticeable form at the top of your website and consider a pop-up box as well. Click here for a good example.

Prioritize DIY peer-to-peer fundraising

DIY peer-to-peer fundraising leverages the power of your network on your behalf. And once you’ve set it up, you don’t even have to be paying attention for the money to come rolling in. Of course you’ll want to steward these donations and cultivate these P2P donors so they’ll renew, but you don’t have to actively ask. That’s why it’s called ‘DIY.’

I like to think of a DIY P2P gift stream as ‘fumes’ from your one-time set-up of this program and your evergreen promotion of it on your website home page. You make it super-easy for would-be donors to find this giving option when they visit your website, and then equally easy for them to implement their own P2P campaign.

In other words, people can easily go to your website and ask their friends to give to you (“in their honor” in lieu of presents for themselves) for important life cycle events. 

One of the best at this is Charity: water. They say the average amount donated to their birthday campaigns is $770.

While our average donation size online is similar to most charities I have benchmarked, our average fundraising campaign is worth many times more. But even more importantly, every fundraising campaign brings in, on average, 13 new donors.

— Paul Young, former Director of Digital at Charity: Water

Turn your Newsletter into a Passive Contribution Income Engine

Your newsletter can become the source of a steady stream of donations. Even though you’re not asking directly as you would with an appeal letter – where giving is your sole call to action — you should be including an opportunity to give. For a hard copy newsletter this will be an inserted remit envelope. For an e-newsletter you can include a button with a link to your donation landing page. In fact, you can include several!

EXAMPLE: ‘Organization C’ had a $2+ million annual fundraising goal from individuals; they raised $120,000 of this goal through their newsletter – without asking. They reached this goal largely through three mailed appeals and targeted in-person and telephone asks. In between appeals they mailed a quarterly newsletter into which a 4”x6” tribute giving envelope was inserted. No direct ask was included. On average, every newsletter yielded $40,000 in tribute gifts. The money – passive income — just rolled in. (This is an organization where I used to work). Every time we thought about discontinuing the newsletter, this fact stopped us. Sure, we weren’t raising as much as our direct appeals, but it wasn’t chopped liver either.

Can you Think of other Passive Income Strategies? 

There are all sorts of ways to generate ongoing contribution income. Think of this strategy a bit like buying an annuity. Or putting money into a 403 (b) or IRA. Once you make the front-end investment you’re assured a steady source of income – without having to pay in more or do much further work.

What about:

  • Developing a saleable product?
  • Recruiting renewable corporate sponsors or underwriters?
  • Cause-related marketing with businesses looking for relatively inexpensive local marketing opportunities?
  • Renting your facilities (once COVID-19 abates)?
  • Piggybacking on another organization’s event (once COVID-19 abates)?
  • Registering on shopping portals like AmazonSmile, grocery store or dining programs? 
  • Licensing of technology or intellectual property?
  • Developing a podcast, with advertising?

NOTE: If you seek to create new nonprofit revenue by establishing a commercially-driven enterprise, speak to your legal and tax advisors to ensure you comply with the IRS and other legal obligations.

Nonprofit Sustainability

Claire Axelrad

Claire Axelrad

Fundraising Coach at Bloomerang
Claire Axelrad, J.D., CFRE is a fundraising visionary with 30+ years frontline development work helping organizations raise millions in support. Her award-winning blog showcases her practical approach, which earned her the AFP “Outstanding Fundraising Professional of the Year” award. Claire runs “Clairification School” online, teaches the CFRE course that certifies professional fundraisers, and is a regular contributor to Guidestar, NonProfit PRO and Maximize Social Business.
Claire Axelrad