Nonprofits Want Monthly Donations Too

An update to the “one big donation or many smaller donations” question.

Photo credit: MIKI Yoshihito, CC BY 2.0.

Last week, we looked at the question of whether charities and organizations prefer one big donation now or multiple smaller donations over time, and I cited a Freakonomics article that stated big donations were better because one large donation incurred fewer fees (including payment processing fees) than several smaller donations.

Charitable Giving: Why Fewer Is More – Freakonomics

As Billfolder Chelsea commented, this theory plays out:

I work in fundraising. One of the more common donation processors for small nonprofits charges 2.2% plus $0.30 per donation, so yeah one bigger donation tends to go further.

However, other Billfolders commented that the charities they supported actually requested monthly donations, a statement that was corroborated by none less than Last Week Tonight’s John Oliver (who, as he noted in last night’s episode, fact-checks everything he says):

And do check the box for recurring donations if you can, because this is not a short-term problem.

It looks like there are a few things going on here: first, the Freakonomics example I cited only compares apples to apples: a $150 donation now vs. a $12.50 donation every month.

But nonprofits assume you’ll donate more over time if you sign up for that monthly donation, and that will mitigate the cost of any donation processing fees. There are other ways around donation processing fees, too; as Billfolder Chelsea noted, donating through PayPal’s Giving Fund ensures the charity or organization receives 100 percent of your donation.

Plus, as Billfolder in the post commented, monthly donations help an organization’s cash flow. Nonprofits don’t always know how much money they’ll get every month, and long-term donation commitments help them make long-term plans.

Also: the monthly or recurring donation helps provide support not only now, when “how can I help” is the top question in many people’s minds, but also later, when we’ve started thinking more about what we’re going to have for dinner and how we’re going to save for retirement and if we need to worry about that article we just read about the Supreme Court and whether Rory Gilmore really should have won a Pulitzer.

Nobody’s Wondering if Rory Gilmore Won a Pulitzer

I’ve donated a pile of money since the election — $354.13 to date—and I plan to donate more next month, although I don’t know yet what number feels like a good “monthly donation” amount, especially because I want to donate to multiple nonprofits and it feels better to give everyone $100 or $150 in the month when it’s “their turn” vs. setting up a few recurring donations to just a few organizations.

But I did want to clarify why organizations were asking for monthly donations, and stress some of the advantages.

Support The Billfold

The Billfold continues to exist thanks to support from our readers. Help us continue to do our work by making a monthly pledge on Patreon or a one-time-only contribution through PayPal.