What to Do When Your Donor Misses a Pledge Payment

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Imagine this: Two years ago, you secured a five-year pledge agreement from donor “Anne” to fund the Doing Good Work program at your nonprofit organization. For the first two years, Anne sent in her annual pledge donation check. In year #3, Anne’s payment due date came and went and your organization did not receive a check.

Unfortunately, this happens. But there are things you can do both before and/or after a missed pledge payment to keep things on track.

What to do before you receive a multi-year pledge

Focus on donor cultivation and stewardship in the early stages of a donor relationship to decrease the chances that your donor won’t pay. For example, you can:

  • Offer monthly or annual payment plans for any large gift
  • Provide a pledge or donation form, including specific annual (or monthly) payment dates
  • Keep donors connected to your organization in between pledge payments
  • Communicate with your donors in the manner they prefer
  • Understand why a donor pledged her support in the first place. Did she do it because her friend told her to? Does she have a personal or family connection to your cause? These reasons affect the level of priority she gives to your organization.

All of this said, even if you do everything right up front, you will still have the experience of a donor who misses a payment or otherwise doesn’t pay.

How could this happen?

Life happens. Circumstances change. Donors have health problems. Their financial situation may change due to elderly parents getting sick and needing care, or children requiring financial support.

What to do after you don’t receive a multi-year pledge payment

When reaching out to a non-paying donor, one key is to stop talking and start LISTENING. Understanding why a donor hasn’t paid his or her pledge—and brainstorming solutions to the problem—involves almost complete listening on your part.

Here’s how you might lead off a conversation to get some insight into a donor’s situation:

“In going through donor records the other day, I noticed that we haven’t yet received your pledge payment for this year.”

  • “I got worried that someone in your family might be having health problems, Sam, or maybe you’d had to shift your finances. Is everything going ok?” (You listen here.)
  • “Your gift makes a real impact with our clients, Regina. I hope we’ve communicated how important you are to us.” (Listen.)
  • “Ellen, would it help to set up a payment plan for your remaining balance due this year? Or shall we extend out your payment term for a little longer? What would work best for you?” (Listen.)

As always, it is important to treat your donor like a real person and not a cash machine. Chances are high that if your donor missed a payment it is for a good reason and not simply because they didn’t feel like paying this year. Be kind and considerate when approaching your donor about their failure to pay.

For more information on the legalities and options for nonprofits trying to collect unpaid pledges, click here. Or here to see how one university handled the situation when a multimillion dollar donor could not fulfill his commitment.

 What are your thoughts on missed pledge payments and how to collect them? Please share your thoughts, tips and advice in the Comments box below!

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