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The Power of Small Dollar Donations

Every penny counts. Regardless of the size of your organization or fundraising goal, we all know this to be the universal truth. Increasingly, we are seeing the value and impact of small-dollar donations, which can be vital to both short-term-fundraisers and the long-term sustainability of an organization.

The importance of small-dollar monthly donations

Relying too heavily on one source of revenue (e.g. large dollar donors or a single annual event) can send an organization into a crisis in the event of unforeseen circumstances (e.g. pandemic and global recession). Diversifying your donor portfolio to include everything from the one-time $10,000 donors to the monthly $10-25 dollar donors can help increase your organization’s financial health and support long-term sustainability. Additionally, it creates a larger pool of donors. Instead of 10 major donors, you may have hundreds of donors, all with mixed (but equally important) financial support.

Gen Z: the generation of most active donors has smaller pockets

You want to begin courting the next generation of donors: Gen Z also referred to as “Philanthroteens.” They are poised to become one of the most philanthropically active and socially conscious generations to date, with a reported 32% of Gen Z donating their own money to charitable and social causes. However, due to their age, they will not (at least for now) be your mega-donors. Rather, this is the generation you want to court for small-dollar donations. While these younger donors (all 2.6 billion of them) will likely be limited to giving smaller amounts of money, they have the potential to make up a significant portion of your individual donor base, so it’s important to treat every donation, from $5 to $500, equally important!

Casting the net wide on both ends

If this year has shown us anything, it’s that there are a lot of needs to be met in our society, and a lot of nonprofits need the support of their communities. Gen Z and Millennials are more aware than past generations of the wide range of social issues and causes, and as a result, tend to have more than one cause they care about – meaning their dollars often go to more than one nonprofit or organization. This is where part of the appeal for small-dollar donations comes in. Donating in smaller amounts per organization gives donors the financial ability to support a wide range of causes and organizations they believe in. If they’re already donating a cumulative $25 per month to other organizations, they will be more likely to add your organization to their list if you’re asking for $5-$10 per month versus $50 or $100.

2020 has changed a lot of the ways nonprofits operate, fundraise, and recruit new donors and supporters. Small-dollar donations are one of the largest emerging methods to meet increased needs in a new era of technology, and begin to inspire and connect with a new generation of donors!


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