Recurring Giving: A Crash Course On Sustainable Funding
Your nonprofit works hard to boost funding, perhaps by increasing event registration or driving web traffic to your donation page. But what you really need is a reliable source of revenue that you can count on.
Financial stability is the bedrock of every successful nonprofit, and it means more than just balancing the budget. It’s about building sustainable revenue streams so your organization is better able to withstand unexpected challenges.
Recurring giving is the key to this strong financial footing. When donors give on a recurring basis, your organization receives reliable funding that doesn’t just keep the lights on, but it also fuels your mission. Let’s take a closer look at recurring giving and how your nonprofit can access this revenue.
Recurring Giving Overview
Recurring giving refers to an agreement with a donor in which they commit to giving a set amount of money regularly. This is usually done monthly, but it can also be quarterly or annually. It’s a “set it and forget it” option for donors who want to support your mission consistently over time.
Here’s how the process works:
- Nonprofits set up recurring options. Most donation platforms allow nonprofits to enable recurring giving directly on the donation form.
- Donors opt in. Supporters select the recurring gift option and choose a donation amount and frequency (i.e., monthly, quarterly, annually, etc.).
- Payments are processed automatically. Once enrolled, the donor’s payment method is charged on a recurring basis without any extra steps for them.
- Donors receive confirmations and updates. Donors are most often automatically sent an email confirmation after each transaction, as well as updates on how their gifts are impacting the mission.
Recurring giving can be the backbone of your nonprofit’s financial strategy. It creates a scalable growth model and fosters stronger donor relationships by letting them support your organization over time.
Benefits of Recurring Donations
Recurring donations bring several advantages, including:
- Financial stability. Recurring giving helps smooth out the bumpy road that is sometimes cash flow. Rather than relying on periodic events to bring in gifts, you have more predictable and reliable revenue.
- Increased donor lifetime value. According to CharityEngine’s list of recurring giving statistics, the average size of a monthly gift is $24, which adds up to $288 annually. Compared to the average one-time gift of $115, this means that recurring donations typically yield more than double the amount of revenue for your nonprofit!
- Improved donor engagement. Frequent, smaller donations keep your cause top-of-mind throughout the year. This also opens the door to more consistent communications, updates, and expressions of appreciation, which are key ingredients in a donor relationship.
- Lower fundraising costs. We all know it’s expensive to acquire a new donor! With a robust monthly giving program, you don’t need to run repeated acquisition campaigns. Rather, you can focus resources on stewardship and program delivery.
The cumulative effect of recurring donations can really transform your nonprofit. Creating a dependable revenue stream allows you to shift your focus from constant fundraising to long-term, strategic impact planning.
How to Launch a Recurring Giving Program
Let’s review the steps you can take to start a sustained giving program.
1. Identify Ideal Donor Segments
Not every donor is equally likely to commit to recurring giving, so targeting the right audience is essential. Use donor data to identify those who are most likely to commit to ongoing support.
Implementing the right technology is key to identifying patterns that indicate someone could be interested in recurring giving. A robust constituent relationship management (CRM) system can help you:
- Analyze donors’ giving histories. Track donors who give multiple times a year or have contributed to several campaigns. Their consistency suggests they’re committed to your mission and may appreciate the efficiency of recurring gifts.
- Monitor engagement metrics. Pay attention to those who regularly open your emails, click on links in your newsletter, attend events, or engage on social media.
- Segment based on behavior and potential. Use your nonprofit CRM to group donors based on qualities like giving capacity, consistency, and areas of interest. A segmented list allows you to personalize your messages and increase the likelihood of engagement.
Once you’ve found donors who might be interested in recurring giving, craft customized messaging that will resonate with each group. If, for example, some donors contribute a large sum at year’s end, send a message about how that support given regularly throughout the year could have a significant impact.
2. Streamline the Donation Process
Most recurring donations happen through digital channels, making a robust online fundraising infrastructure key to recurring giving success. Make sure the digital giving experience is seamless by providing:
- Prominent recurring giving options: Add a clearly labeled “Make this a monthly gift” toggle or checkbox near the top of your donation form.
- User-friendly design: Keep your forms uncluttered, responsive, and free from unnecessary fields or confusing instructions.
- Security and trust: Use secure payment processing and include trust signals (like PCI-certified) to reassure supporters.
- Speed and simplicity: Keep clicks and steps to a minimum!
Before launch, ask a friend or team member to walk through the donation process as if they were first-time donors. If there are points of friction or confusion, address them immediately.
3. Craft a Compelling Case
Donors are more likely to commit to recurring giving when the long-term impact and value are clear. When your donors understand their actions are making a tangible difference, they’re more likely to support your program.
Here are a few ways you can frame your case:
- Tie amounts to impact. Explain what the recurring gift allows your organization to accomplish (i.e., “$25/month covers school supplies for one student’s school year”).
- Use storytelling. Incorporate testimonials, images, and other engaging elements to create a compelling narrative that will attract donors.
- Emphasize a sense of continuity. Show donors the sustained progress your nonprofit can make with their recurring support.
The more vividly you show the donor’s role in your mission, the more likely they are to stay engaged.
4. Promote and Follow Up
It’s probably not going to work if you launch a recurring giving campaign and just hope people find it. Strategic promotion and consistent follow-up are what turn one-time supporters into lasting partners.
Here are a few best-practice ideas:
- Use multiple channels. According to Getting Attention’s marketing statistics, 39% of people say they’re either extremely or very likely to respond to an advertising promotion when they see it across multiple channels. Make sure donors can’t miss your message by using email, social media, your website, and any other communication channels your donors frequently use.
- Tell stories of recurring impact. When you illustrate the difference that recurring gifts make, it compels supporters to join your monthly giving program.
- Create a branded program. Sometimes, naming your program or participants creates a little excitement. For example, calling it the “Impact Partner” program makes recurring donors feel like an important part of your nonprofit’s mission.
- Send updates and notes of appreciation. Never underestimate the power of gratitude! Acknowledge every recurring gift and periodically update donors on the impact of their support.
- Celebrate milestones. Celebrate “30 days since your first donation” or the day that marks a year (or more) of support. This personalized recognition increases donor loyalty.
To measure success, track key metrics such as donor retention rate, average gift size, monthly giving revenue, and churn rate. Setting clear goals and monitoring key performance indicators (KPIs) helps you refine your program over time.
Recurring giving is one of the most strategic investments your nonprofits can make. It will increase donor loyalty and provide predictable revenue, while also allowing your team to focus on pursuing mission-driven activities and other stewardship efforts.
Prioritizing recurring giving today sets your nonprofit up for long-term, sustainable success.
