multiple-year pledges

Multiple-year pledges have traditionally been used as a payment tool for large gifts for unrestricted use, capital needs, or endowment, allowing donors the flexibility to spread their gift over multiple tax years, for example. But multiple-year pledges for an annual gift have traditionally been regarded as a bad idea, either because these gifts were thought to be too small, or that the pledge payoff rate for them would be poor, or that the donor would be reluctant to increase their annual gift each year.

That line of thinking would seem to make sense. However, we have seen quite the opposite. We have found that donors are willing and able to make larger pledges for unrestricted operational funding and to pay off those pledges faithfully over time.

I believe this is because these donors have read the pledge form carefully and have chosen, quite deliberately, to make these larger multiple-year gifts. They see that they also have the “fill-in-the-blank” option to give whatever amount they would like for as many years as they would like. They could make a gift of, say, $1,000 a year for one year at a time. That is a significant gift. Your organization would no doubt thank them, cultivate them, and odds are they would continue to give at that level or higher.

Therefore, donors who choose to join the Multiple-Year Giving Society, making pledges of at least $1,000 a year for five years, are sending you a clear message.

They know they don’t have to make a five-year pledge to your organization—they want to!

Why Five Years?

Many groups that have been implementing the Benevon Model on their own tell us they have been reluctant to ask for five-year pledges. Their alternative seems to be asking for three-year pledges. If you are committed to getting it right, this issue is non-negotiable. In our testing and tracking, we have found that three-year pledges are not nearly as effective.

Three years go by quickly. Many groups have not gotten to know their donors at all in those three years, ensuring a low pledge payoff rate and a very poor pledge renewal rate. Three years is not enough time for the model to take hold in your organization.

Some groups that come to our program after implementing the Benevon Model on their own tell us that they chose three-year pledges for fear of scaring off donors by asking for five-year pledges right from the start. We try to reassure them by reminding them that launching the five-year Multiple-Year Giving Society in no way precludes single-year giving. The fill-in-the-blank box on the pledge card will engender many one-year gifts from those more comfortable with year-by-year gifts.

If you already have a strong base of year-by-year donors, as part of your Know-Thy-Donor Program you will invite them to special Points of Entry for existing donors and, eventually, invite them to become part of your new Multiple-Year Giving Society, either one-on-one or at your Ask Event. If they decline this invitation, their names will still be listed in your annual report using the same categories you have used in the past.

Need help getting started with a pledge card for your annual gift asks? DOWNLOAD THIS SAMPLE PLEDGE CARD TEMPLATE for a starting point.

Have you ever asked for a multi-year pledge in your annual appeal? Why or why not? Let us know in the comments below!

This post was an exceprt from Terry’s just-released book The Benevon Model for Sustainable Funding: A Step-by-Step Guide to Getting it Right, Second Edition

annual fundraising appeal

Terry Axelrod

Terry Axelrod

Founder and CEO at Benevon
Terry Axelrod, founder and CEO of Benevon, has more than 30 years’ experience in the nonprofit field. She created the Benevon Model after serving as the first development director at a private inner-city school, where she designed and implemented the fundraising programs that yielded $7.2 million in two years and a significant endowment. Over the past 20 years, Benevon has trained more than 5,000 nonprofit teams to customize this systematic process for building sustainable funding.