Good Things Come in Small Packages

Donations to nonprofits have plummeted during the most recent recession, but have been rebounding to higher levels since. However, many donors today can only afford to make smaller gifts (“micro-donations”) in an economy that is still recovering.

Realizing the Purpose

Micro-donations are defined as contributions in amounts that an individual wouldn’t have to think twice about giving. Micro-donations’ popularity has soared over the last several years with good reason. When the economy is struggling and personal finances are limited, individual donors may be hesitant to donate more than $200 to your organization. Even though the total contributions will be larger, donating as little as $20 per month via automatic bank account deductions may better fit their budget.

Moreover, younger people may currently be able to afford only small donations, but as their lives progress, they likely will gain the ability to give larger amounts. Small contributions are an effective way to introduce them to giving to your organization and start to build a long-term relationship.

Large and Small

Campaign organizers still pursue the large, generous donations, but not at the expense of ignoring the smaller contributors. It would be a good idea to include language in your fundraising material such as “Every dollar counts” or “No donation is too small” that serves to legitimize the micro-gift.

This should result in the receipt of donations from all donors, regardless of their financial resources. Keep in mind that donors with deeper pockets are solicited by many charities during fundraising campaigns. Micro-donations provide an opportunity for the larger donors to contribute to a greater number of organizations. Also, a micro-donation received from this type of donor in the current year could very well become a macro-donation in future years as the donor gets more familiar with your organization.

Expressing Thanks

Although your organization may not consider a $15 or $30 gift “large,” it may be a significant contribution for the individual who made it. Thank micro-donors promptly and show them the ways your organization is putting their donations to use.

For example, a social service agency could tell micro-donors that their $15 contribution paid for a needy child’s Christmas toy. Or, a veterans association could show how a $30 contribution purchased everyday household items for a veteran.

Substantiating the Gift

For micro-donations made in cash, the donor needs a receipt from your organization in order to substantiate a tax deduction, no matter the size of the gift.

Micro-donors who give a gift with a check, credit card or payroll deduction aren’t required to receive substantiation from your organization in order to deduct the gift on their income tax return. Sending them a letter of acknowledgment is an alternate method to show appreciation.

Successful Efforts

Micro-donations serve as a vital revenue stream for a great number of not-for-profits. Focusing on fundraising in this area can be successful if you understand the significance of smaller donations and the donors that give them.

 

Sidebar:  Examine Tools for Online Fundraising

Many tools are available if you need help securing both micro-donations and larger donations online. The following are some examples:

Software provider FirstGiving offers nonprofit donation software that helps your organization receive donations on its own website. Its application programming interface (“API”) is a set of web services that allows your organization to integrate a secure payment or contribution processing system into your organization’s existing website, online store, or onto a fundraising platform.

Software such as MobileCause can assist your organization in securing micro-gifts by allowing donors to text to donate, help with registration for special events, and assist in crowdfunding.  Connect2give provides a low-cost option for your donors to give via text.

DonorPerfect fundraising software can help nonprofits to collect and streamline constituent data, target and analyze campaign efforts, as well as manage comprehensive donations processing. This software can be customized to meet the needs of nonprofits of varying size.

Blackbaud offers “Luminate CRM,” which is a cloud-based system designed for the needs of larger nonprofits. The system is a complete constituent relationship management package providing online fundraising, and direct marketing capability that incorporate mobile, social, e-mail and direct mail channels.

 

 

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