February 27, 2015 | Read Time: 1 minute
Understanding the following terms will you a head start as you begin or expand your monthly giving program.
Sustainers: A common term for donors who give on a monthly or recurring basis and thus provide a steady stream of funds. Current donors are often strong prospects to become sustainers.
Electronic funds transfer, or EFT: The direct transfer of money from a donor’s bank account to a charity. Such payments are easy and inexpensive for nonprofits to process—and unlike credit cards, bank accounts do not expire. This is how many people pay their bills.
Conversion: Moving a donor who previously made one-time gifts into a recurring giving program. The term may also describe monthly donors who switch from one method of payment to another, for example, from credit cards to EFT.
Upgrade: An increase in the size of a donor’s recurring gift. Nonprofits should establish a campaign to periodically encourage monthly donors to give more.
Donor-retention rate: The percentage of all donors who give in two consecutive years. This is one of the fundamental measures of how well an organization is holding on to donors. Monthly donors tend to have higher retention rates.
To calculate this figure, determine the number of donors in one year and the number of those donors who contribute again the following year. Divide the second number by the first and multiply the result by 100: (year 1 donors who make gifts in year 2 ÷ all year 1 donors) × 100.
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First-year retention rate: Make the calculation using the number of new donors in year 1 and the number of those first-time donors who went on to contribute again in year 2.
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Multiple-year retention rate: Make the calculation using only those donors whose year 1 gift was not their first to the organization.
