The Australian Centre for Philanthropy and Nonprofit Studies, qut

Chapter 8: Regular, planned, or ‘pledged’ giving

Dr Ted Flack and Assoc Prof Wendy Scaife

Pledged, planned and regular giving

Typically, industry sources will refer to such giving as ‘monthly giving programs’, to denote a common timeframe for such giving, or as ‘recurrent giving’ to capture the essence of this type of support compared with one-off or infrequent ad hoc donations.

Australian researchers O'Donoghue, McGregor-Lowndes and Lyons (2006) added an important definition to this field based on the original Giving Australia study (ACOSS 2005). They describe planned giving as a term used to distinguish an act of giving that is deliberately planned from one that is spontaneous, often in response to a tragedy or a chance solicitation by mail or telephone (O'Donoghue, McGregor-Lowndes and Lyons 2006, 520). It should be noted that in US fundraising parlance the term ‘planned giving’ refers more specifically to bequests and giving that uses financial instruments often involving financial planner advice (such as charitable remainder trusts). However, the broader Australian usage underlines the important behavioural distinction between some person, company or family that is deliberative about where, how and how much they will give compared with a more reactive approach.

International context

A greater focus on the concept of regular, ongoing giving is important as a long-term NPO growth strategy. Givers may start in a small but committed way but over their life cycle give more as their circumstances allow and in different ways. Fundraising industry sources such as the PBS Sustainer Learning Center (2016) will laud this type of giving as one that costs the organisation less, tends to have people willing to upgrade the amount of their giving more frequently, takes fewer incentives to maintain, provides over time quite a predictable income stream and sometimes appeals to a younger giver. This adds up to a higher donor lifetime value, creating greater ability to advance the organisation’s mission. Particularly in Canada, but also in some parts of the US, industry sites reflect the term ‘sustainer giving’, which depicts the impact that regular giving has on NPOs and their work in the community.

The regular giver is often seen as the most loyal of the NPO’s supporters for obvious reasons. The longevity of the relationship with regular givers fosters the sense, and underscores the reality that such supporters are indeed partners in the organisation’s achievements. Often marketing of regular giving uses ‘dollar handles’ (a choice of giving amount often tied to a particular purpose such as a $20 a month gift buying food for a third world child for a year) (see, for example Fignar 2009). This approach gives logic both to the amount given and the need for it to be ongoing.

The growth in regular giving as a common approach sits against the backdrop of major concern particularly in the US with levels of donor attrition. In other words, people in recent years have been giving once but only a minority give again or go on to become a committed regular giver. Significant work has been done on donor loyalty by researchers such as Sargeant and Woodliffe (2007a). At the sector level, an ongoing campaign to turn around a lack of donor retention has been under way in the US for the past few years in the form of the Fundraising Effectiveness Project (Association of Fundraising Professionals and The Urban Institute 2015). Turnover of givers has seen more NPOs trial new ways to encourage givers to support their cause.

For instance, the practice of recruiting regular givers in the street or calling door-to-door, often referred to as ‘face-to-face fundraising’, has been in use by NPOs in the United Kingdom since the late 1990s. The practice differs from traditional forms of street collection in that the person seeking the donation is typically employed by an agency rather than being a volunteer, and the donor is asked not for a cash gift but rather for a committed, regular gift deducted automatically each month from their bank account or credit card (Sargeant and Jay 2004; Fleming and Tappin 2009).

The use of face-to-face fundraising methods, particularly those in public places, has led to an increase in complaints from the public (Chung 2014; King 2010; Slack 2013; Smerdon 2014a). This in turn has led to calls for greater regulation of such fundraising practices in some jurisdictions (Breen 2012; Etherington et al. 2015; Sargeant, Hudson and Wilson 2012).

Many studies of the financial efficacy of face-to-face fundraising are positive, with the available research finding that the value of donations obtained from those who are recruited is almost double that of casual donors during the same time period, and that the lifetime value of the donors is significantly increased (Chen 2015; Fleming and Tappin 2009; Sargeant and Jay 2004).

Although research into the motivations of those who choose to become regular givers is scant, recent research in the Netherlands (Beldad, Snip and Hoof 2014) investigated the determinants of individuals’ repeat donation intentions. This research found the variance for people’s intention to continue donating to a charitable organisation is attributable to factors that also influence first-time donation intention: people’s affinity with the cause of the charitable organisation, their level of trust in the organisation and the positive reputation of the organisation. A sense of obligation to continue to donate was not found to be influential.

There is mixed evidence on the impact of regular giving campaigns. Research into the behaviours of donors in Canada found that there are three types of donors: loyal donors, switching donors and mixed donors (O'Reilly et al. 2012). The study found that loyal donors are likely to give significantly more to the NPOs of their choice, but to give less than other donors overall.

Regular giving also can be arranged through an employer’s payroll deduction scheme, whereby the employee gives the employer an authority to regularly deduct an amount from pre-tax earnings to forward it on to a chosen charity or cause (Australian Charities Fund 2014a; Osili, Hirt and Raghavan 2011). This is covered in chapter 10.