How Nonprofits Make the Most of Small Dollar Donations
by Mike Montalto
February 27, 2020

If you work at a nonprofit, you probably spend a lot of time building relationships with your donors. And you probably have a lot of ways to keep your high-level major donors happy and ready to give. But is your nonprofit also taking steps to make the most of small dollar donations?

As you know, the fundraising landscape is always evolving. And the rise of online giving has made it easy for anyone to contribute to any cause, at any level, at any time. That’s why so many organizations are shifting their focus to securing donations from small gift donors.

Of course, major donors are still vital for sustaining your fundraising efforts. But small gift donors may be more valuable than you think! Here are some ways your nonprofit can start making the most of small dollar donations.

Get New Donors in the Door

Small donations of $5, $10, or $20 are a great way to get new donors familiar with your organization. It takes minimal commitment on the donor’s end to give just a few dollars. But small gift donors can provide tremendous long-term value if you follow up effectively and grow relationships over time.

In our blog post, “$5 to a Fortune: Gaining and Retaining Millennial Donors” we talked about how some donors prefer to make small, test donations to see if a nonprofit is deserving of their continued support.

Well, millennial donors aren’t the only ones using this approach! It’s impossible to know ahead of time, but there’s a chance that $5 donation you just received could be from a potential board member, employee, sponsor, or future major donor who wants to see how you respond to even the smallest gifts.

Small Dollar Donations and Small Projects

Try thinking on a micro level if you want to use small dollar donations to acquire new donors. Consider launching a separate appeal focusing on a smaller initiative. This way, even donors who contribute just a few dollars feel like they are making an impact.

To start, think about all the things that are covered by your annual fund. Take a small, but tangible item from your annual budget and launch an email appeal campaign focused on that specific need.

For example, let’s say your nonprofit focuses on providing educational opportunities for students in underserved populations. Focus a small donation appeal on a specific week-long after school program.

In your appeal, you can make an ask like, “Please consider donating just $10 today, so we can reach our goal of $500 so students can attend this program at no cost to their families.”

This approach makes every donor’s gift feel valuable, no matter how much they give. It’s easy for donors to feel good about contributing just $5 or $10 when the goal is $500. This allows small gift donors to feel like they are making an impact on your goals.

On the other hand, a donor who can only give $5 may not see the value of their gift if your goal is $10,000. They may decide their gift doesn’t make enough of an impact and not donate at all.

It Must be Easy to Give

However, it needs to be easy for donors to give if you want to collect more small dollar donations. You don’t want to give potential donors any reason to re-think their decision. So, it’s critical to make the process as easy as possible.

Make sure you are keeping up with the latest trends in mobile optimization. Donors may decide their small dollar donation isn’t worth it if your donation page takes too long to load. It also needs to read well on a smartphone and can’t slow donors down by asking for field after field of information before they click “donate.”

And don’t overlook the little things. For example, links in email appeals should lead directly to your online donation page. Don’t force potential donors to find their way there from your home page on their own.

Remember to cut the clutter from your donation page. Donors don’t need to be educated about your nonprofit’s work when they click a link to donate. Make sure any content on your online donation page directs donors towards completing their donation.

We know you have a lot to say about your nonprofit, your work, and your goals. However, including these messages on your donation page draws a donor’s attention away from the giving process. Save all that information for another page on your website. Then, repurpose that content to use in your follow up communications!

The Power of Monthly Giving

A successful monthly giving program is the holy grail of small dollar donations. As we’ve discussed throughout this post, your goal should always be turning a small, one-off donation into a lifetime of support.

And while that could mean increasing the average gift size of these donors over time, your best bet may be getting them to commit to making more of the small dollar donations they are already comfortable with.

A strong monthly giving program is the most effective way to do it! After all, monthly giving can help your nonprofit retain donors at a higher rate and provides a more consistent cash flow.

Don’t forget, the average donor retention rate for nonprofits hovers around 45 percent. However, monthly donors are retained at a much higher rate of 90 percent. And a donor who gives just $20 a month will give at least $240 a year!

So, consider reaching out to your small gift donors, especially those who gave more than once, and see if they would be interested in making their gift monthly. Tell them about the benefits of monthly giving for the donor and the organization. And be sure to let them know about any special perks, like an exclusive event, you offer for monthly donors.

Always Follow Up

Someone who gives $5 to your organization for the first time should feel as special as someone whose first donation was $50. We can’t stress the importance of following up every gift with not only a heartfelt thank you, but also with a communications track that keeps the donor engaged and preps them to give again in the future.

So, no matter how little someone gives, be sure to follow up quickly. Reach out to say thank you. Send them a digital version of your new donor welcome kit and annual report. Email them a survey to get some more information and find out what inspired them to give. And then stay in touch.

If your organization looks at small gift donors as less than others, you have some work ahead of you. We know you’d never tell donors who give less than average that you don’t think they matter. But actions speak louder than words.

If you don’t thank your supporters effectively after a small dollar donation, donors will feel like their gift didn’t matter to you. So, make sure your small gift donors know they have an important role in achieving your goals.

As we mentioned earlier, you never know who that $5 donation came from and what their true intentions might be. Failing to follow up on a small dollar donation could end up costing you thousands of dollars over time!

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