The Pros & Cons of Multiyear Pledges

Dear Kim,

We have been advised to start asking our donors for three to five year pledges.  The consultant advising us says it will save us a lot of time because we do ONE ask and then the payment is spread over five years.  Our executive director likes the idea because she and the finance Committee will be able to project income more accurately if they know people are bound by a pledge agreement.   I like the idea of saving time and not having to deal with the donors every year—it seems like I will have more time to find new donors.  But someone who heard you speak recently said you were opposed to multiyear pledges.  Can you talk about the pros and cons?

~Truly Good or Too Good to be True

Dear Truly True,

It is possible that I said I was opposed to multiyear pledges because I can be hyperbolic.  I don’t remember saying that and, more important, I am not opposed to them. However, I do think they have their down side and you can see part of the downside in the wording of your letter.  “I like the idea of…not having to deal with the donors every year…” Yes, those pesky time sucking donors!  I know you didn’t mean it that way, but when a big attraction of any strategy is that it helps you not have to talk with donors, you have to ask yourself some serious questions. If you personally don’t have enough time to take care of the donors you have as well as seek new ones, then you want to look at the role of the board, volunteers and your executive director.  Don’t solve your time problem by trying to avoid your donors. 

The other issue with multiyear pledges is that donors may stop paying.  I have known any number of organizations that sought five-year pledges and then saw an enormous drop off at the 3rd or 4th year.  I am willing to bet that part of the reason for this drop off in giving is a corresponding drop off in personal contact of the donor by the organization. 

Being in relationship with our donors (talking with them, thanking them, calling them, asking their advice, inviting them to events, etc.) is what development people live for and is the backbone of any successful fundraising program.   Any strategy you pick needs to have that relationship-building piece as the central element. 

~Kim Klein

What’s your experience been like with multiyear pledges? Have a different take? Please share below!

3 Comments to The Pros & Cons of Multiyear Pledges

  1. September 19, 2014 at 3:08 am | Permalink

    Completly agree. However in this days of digital its always important to have a digital marketing strategy even when you have a small fundrasing program. Sometimes spending 30 dollars (1 dollar a day) a month in Facebook can do a diference 😉

  2. October 23, 2014 at 9:10 am | Permalink

    I have a question I’d love to get some feedback on. Let’s say a donor commits to a multi-year pledge of $2000. Then during a given year decides to sponsor an event for $1000 and contribute through a third-party sponsored giving campaign for another $1000. Does it get counted towards their multi-year pledge? I’m having trouble wrapping my head around it both as a matter of principle and how to record it.

    • October 25, 2014 at 10:46 am | Permalink

      The multi-year pledge is different from the other gifts they donor is giving, and I doubt that this donor thinks he or she is fulfilling a pledge by sponsoring an event or giving through another organization. But the only way to find out, if you really want to know, is to ask the donor. You need to call anyway and thank the donor for being so generous. I might say something like, “Your pledge and now these two extra gifts are so generous. Thank you!” Then let the donor clarify whether the two gifts equal the pledge or not. Don’t suggest it–but open the door to clarity.
      This is a good problem to have.

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