What’s a pledge? What’s a donation? What’s the difference? When it comes to pledges vs. donations, one isn’t better than the other, but each requires tailored messaging and campaign planning to be the most effective.
A pledge is a promise to pay later, while a donation is an immediate payment. So, if a supporter promised to pay $10 monthly for a total gift of $120 after 12 months, that is a pledge. If the supporter made a one-time gift of $100 as a result of a fundraising appeal, that’s a donation.
Of course, there’s also a lot of overlap between the two. That’s why we often see the terms “pledge” and “donation” used interchangeably, even though the key differences between them mean we should always think about them independently.
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Pledges vs. Donations: What’s the Difference?
“Donation” is often used as a catchall term for every gift given to an organization. But when we treat everything like a donation, we overlook the incredible potential of pledges.
Let’s take a look at some of the key differences between pledges and donations.
| Pledge | Donation |
|---|---|
| A pledge is a promise to pay an amount later. For example, a donor may pledge to pay an organization $1,200 in a calendar year. Then, once a month, the organization receives a $100 pledge payment. Matching gifts are technically pledges, too, because the organization or donor offering the matching gift promises to pay an amount based on an unknown number in the future. | A donation is an immediate payment. You can have a repeat donor who has never actually pledged anything. They immediately give the amount promised up front. |
| Pros: Affordability: Pledging makes it easier for donors to give in higher amounts by breaking payments into more affordable pieces. Engagement: Making repeated contributions continuously engages the supporter with the organization. Outreach: Pledges can be more affordable, so your pool of potential donors grows. You can connect with people who initially could not afford to support your organization with large gifts. | Pros: Urgency: As donations are immediate payments, the organization benefits from the funds right away. Simplicity: The payment is made immediately, so there is no need to follow up for future installments. Access: Some donors may be intimidated by the commitment to enter a pledge-based program. One-time donation opportunities remove that fear. |
| Cons: Tracking: Managing multiple repeat pledges can be challenging, even for small organizations. Follow-Up: The organization has to follow up with the donor—sometimes repeatedly—to collect pledges. They‘ll also need to send more donation receipts and acknowledgment letters. Commitment: A pledge campaign requests future support from constituents. Some may be hesitant to sign onto an ongoing payment schedule. | Cons: Engagement: A one-time donation means a one-time connection, which means you may need to try harder to repeatedly engage that supporter. Revenue: Donors who make a one-time payment may not give as much in total as people who pledge larger amounts over time. |
Most organizations are heavily invested in driving donations, but they struggle with managing effective pledge campaigns. But accepting both pledges and donations at the same time allows your nonprofit to give supporters more options and opportunities to get involved.
Managing Pledges: How to Overcome the Challenges
Pledges are a promise to pay, but there’s always a risk that the person will not fulfill their promise when the time comes. Pledge attrition is real, and it should be factored into any pledge campaign. You can guard against inevitable pledge attrition by establishing strong pledge tracking and follow-up strategies.
Some reasons that pledges may go unfulfilled are entirely outside your control. Financial hardships like job losses, serious illnesses, economic changes, and other factors may keep someone from paying their original pledge in full. In those cases, a write-off may be your only option.
On the other hand, many situations are within your control. A donor might simply forget to send in their pledge or may have an issue with their payment method.
When that happens, you can respond by automatically sending out friendly reminder notices. They should include:
- A thank-you message
- The amount of the missed pledge payment
- A reminder of that pledge’s impact on your organization
- A direct and clear link to a page to make that donation (if it’s not automated) or update their payment method
With the right constituent relationship management (CRM) platform, you can set up pledge reminder emails and thank-you letter templates that include those elements. Then, you can schedule them to go out when payments are 30, 60, and 90 days overdue. Some CRMs can also schedule tasks for follow-up calls!
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Use Neon CRM to Help Manage Pledges and Donations
When prioritizing pledges vs. donations, many organizations focus all their efforts on donations because of the challenges of managing ongoing pledge payments.
But a great nonprofit CRM empowers you to take advantage of the opportunities pledge campaigns provide while making it easy to manage administrative details.Neon CRM helps you manage pledges and donations using intuitive, automated, customizable tools in an easy-to-navigate database. To learn more about how our platform can streamline your pledge management process, request a demo!
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