Starting a monthly giving program

This guide is for small charities that want steady, predictable income from supporters who give a set amount every month. A monthly giving program (also called recurring giving or sustaining membership) turns a one-off donor into someone who gives automatically, by card or bank transfer, until they decide to stop. After reading, you'll know how to design the program, how to ask, which payment rules apply, what to do when a payment fails, how receipts work, and how to keep monthly donors happy.

Our guide to donor stewardship covers looking after all your donors. This guide goes deeper on monthly giving.

Why monthly giving helps a small charity

• Predictable income. You know roughly what will arrive each month, which makes budgeting and cash flow easier.
• Less asking. A monthly donor doesn't need a new appeal to give again.
• Small amounts add up. Someone who can't write a large check once a year may happily give a small amount each month.
• Loyal supporters. Monthly donors tend to feel part of the work, and are often the people who volunteer, come to events and tell friends.

It isn't free money. Each gift costs payment fees, someone has to watch for failed payments, and monthly donors deserve regular news. Plan for that before you launch.

Design the program

Keep it simple. You need:

• A name, if it helps. "Friends of the Pantry" or "Reading Circle" gives monthly donors a sense of belonging. A plain "Give monthly" works too.
• A clear purpose. Say what monthly gifts make possible, in concrete terms that are true for your program. If you say "$20 a month buys a week of groceries for a family", check that the numbers hold.
• Two or three suggested amounts, plus an "other" box. Base them on what your donors already give.
• A home on your website. The donate page should offer "monthly" as an option, ideally next to "one time", and work well on a phone.
• A way to change or stop. Decide how donors can change the amount, pause, update a card or cancel, and say so on the sign-up page.

Don't promise benefits you can't keep up. If you offer a thank-you item or members-only event, remember that anything of value given in return can change what you must say on receipts. Our guide to donor acknowledgments explains when that applies.

How donors pay

Most monthly gifts come by card or by bank transfer (an automatic debit from the donor's bank account, often called ACH).

• Cards are easy for donors to set up online. They expire and get replaced, so some payments will fail each year. Many payment services offer automatic card updating; ask yours.
• Bank debits usually cost less in fees and fail less often, but some donors are less comfortable sharing bank details.

Use a reputable payment service or donation platform rather than storing card or bank numbers yourself. Compare fees using each service's own pricing page, and note the date you checked. Our guide to online fundraising and crowdfunding explains the fee layers to look for.

The federal rule for bank debits

A regular debit from someone's personal bank account is a preauthorized electronic fund transfer under federal Regulation E. The rule (12 CFR 1005.10) says:

• Written authorization. These transfers may be authorized only by a writing signed or similarly authenticated by the donor, and whoever obtains the authorization must give the donor a copy. An online form with a clear agreement and a confirmation email is the usual way to do this; check that your payment service handles it.
• Changing amounts. If the amount will vary, the donor must get written notice at least 10 days before the transfer. Monthly gifts are usually a fixed amount, which avoids this, so change an amount only when the donor asks.
• The donor can stop payments through their bank by telling the bank at least three business days before the scheduled transfer. Make it just as easy to stop with you.

Ask for monthly gifts

• Ask your best donors first. People who already give two or three times a year are your likeliest monthly donors.
• Ask new donors soon after their first gift, in the welcome note or a few weeks later.
• Offer it as the easy option in your year-end appeal and on your donate page.
• Ask in person. At events and on calls, "Would you consider giving monthly?" is a short, comfortable ask.
• Upgrade gently. Once a year, thank monthly donors and invite, but never pressure, a small increase.

When a payment fails

Failed payments are the most common way monthly gifts quietly end. Have a routine:

1. Check failed payments every month. Your payment service should list them.
2. Contact the donor quickly and kindly. "Your card may have expired. Here's a secure link to update it." A phone call works well for long-time donors.
3. Try again once or twice. Many services retry automatically; know what yours does.
4. Record what happened. If the donor doesn't respond after a couple of tries, mark the gift as ended and thank them for what they gave.

Receipts for monthly gifts

Publication 526 says each payment is a separate contribution. Monthly payments aren't added together to reach the $250 written acknowledgment threshold. A donor who gives $25 a month doesn't legally need a written acknowledgment for each payment, though a thank-you is still good practice.

If any single payment is $250 or more, the donor needs a written acknowledgment for it. Publication 526 says a donor can have either a separate acknowledgment for each such contribution, or one acknowledgment that lists each contribution and its date and shows the total.

In practice, most charities send:

• an automatic email receipt for each payment, from the payment service, with your charity's name, the amount, the date and a statement that no goods or services were given in return (if that's true)
• a year-end summary in January listing every gift and date, with the same statement

Check that the automatic receipt wording matches the IRS list. Our donor thank-you letter template has the wording.

Look after monthly donors

• Thank them when they sign up, personally if you can, and tell them what to expect: how often you'll write and how to make changes.
• Report what their gifts did. Two or three short updates a year, plus a yearly note on what their monthly gift added up to.
• Don't send them every appeal. Leave them out of standard asks, or send a version that thanks them first.
• Make changes easy. Answer requests to pause, lower or cancel quickly and politely. A donor who can pause is less likely to leave for good.
• Notice anniversaries. A short note on the first anniversary of a monthly gift costs nothing and means a lot.

Track a few numbers

Once a month or once a quarter, look at:

• how many active monthly donors you have, and how many joined and stopped
• total monthly income from them
• how many payments failed, and how many you recovered

A simple donor database or your payment service's reports will give you these. Compare with your own past months, not with other charities.

Monthly giving checklist

• Our donate page offers monthly giving and works on a phone
• We say clearly what monthly gifts make possible, and the numbers are true
• Donors can see how to change, pause or stop their gift
• Bank debits have the donor's written or electronic authorization, and the donor gets a copy
• We never change an amount without the donor asking
• Someone checks failed payments every month and contacts donors kindly
• Receipts meet IRS rules, and monthly donors get a year-end summary
• Monthly donors get a personal welcome and regular news about what their gifts did