Donations to not-for-profit organizations plunged during the latest recession but have ever so slowly been edging their way to healthier levels ever since. Despite this growth, many contributors today can only afford to give small gifts in a still-tight economy. Enter the micro-donation.

Why the Micro-Donation?

Micro-donations are often defined as gifts of an amount that a person would not think twice about spending. Their popularity has increased in the last several years and no wonder. When money is tight, individual donors may back away from a request to donate $200 or more to your organization. However, donating $20 a month via an automatic checking account deduction may fit their budget, even while the total contribution will be larger in the end. Micro-donations make giving doable for more people.

Also, while some people may only be able to give small donations now, they will likely be able increase their donations over time. Small contributions are a great way to draw them into your organization and help build a long-lasting relationship.

All the Fish in the Sea

Campaign organizers would love to get large, generous donations, however, they do not want to exclude the little guy either. Including certain wording in your fundraising material — such as “Every dollar counts” or “No donation is too small” — legitimizes the micro-gift.

This can help encourage donations from all donors, regardless of their financial resources. Also remember that donors with deeper pockets are usually contacted by multiple charities during fundraising campaigns. Micro-donations give the bigger donor an opportunity to contribute to a number of organizations. And, a micro-donation from such a donor this year could even turn into a macro-donation in the future as the donor gets to know your organization.

Expressing Thanks

While your organization might not consider $15 or $30 as a large gift, it may be a significant contribution for the person making it. Thank micro-donors promptly and show them how you are putting their money to work.

For example, a social service agency could inform donors that their $15 contribution paid for a Christmas toy for a needy child. A veterans association could list the everyday household items that were purchased for a vet with a $30 donation.

Substantiating the Gift

If the micro-donation is made in cash, the donor will need a receipt from you to substantiate a tax deduction, no matter how small the donation. While it may not be absolutely necessary, sending a letter of acknowledgement is another great way to show your appreciation for the donor’s gift.

Successful Efforts

Micro-donations are a necessary revenue stream for many not-for-profit organizations. Your fundraising in this area can be successful when you realize the importance of small donations and the people who make them.

For more information on micro-donations, contact Harry Fox at [email protected], or call 312.670.7444. Visit ORBA.com to learn more about our Not-For-Profit Group.