5 Reasons to Focus on Recurring Donations
Today I’m talking about how to make more money! Now that I’ve hooked you, let’s get into why you should “invest” your time cultivating recurring donations.
Typically, nonprofits fundraising efforts focus on big donors or one-time donors. I bet you’d agree with this statement; 20% of donors gave 80% of the donations. But why have we glossed over smaller, monthly donations? Those can add up quickly (even more than one-time gifts), and with technology that makes it easy to sign up and pay online, it’s easier than ever. If your organization doesn’t have a recurring donation system, here are five reasons why it should:
By allowing donors to schedule smaller donations over a period of time, you’re automatically retaining them and showing them that their donations are not only valued but counted on. So, when you launch a new program or need additional dollars for something, you will likely be able to count on them to give again. According to the latest Blackbaud Luminate Online Benchmark Report, total fundraising grows at around 3% per year. First-time donations actually decreased by 5% year over year, but sustainer donations increased by 14%! Now, do I have your attention?
Ability to Plan
This might seem obvious, but if most of your donations are set up on a monthly cadence, you can count on that money to come in. Instead of chasing people down for bigger gifts, you have a steady stream of donations coming in that you can expect. That makes it easier to plan how and how much you can deliver on your mission. No more wondering if you’ll hit your monthly goals (or if you’ll be able to raise your goal!).
Ease of Giving
Some donors may want to contribute, but financially it’s not possible in one lump sum. Or, some people just prefer to spread out their giving over time instead of all at once. Think of recurring giving like a subscription box. Let’s see; I have KidStir, Kiwi Co, Dollar Shave Club, Burst, Birchbox…oh, I got carried away. The point is, we are used to paying for something in smaller doses every month! Whatever the donor’s preference, “subscribing” is an easy way for them to commit. . Technology and online donation platforms eliminate the need to chase people down to give on a specific date because the system is automated. And the bonus is that the donor feels more in control – if they need to stop their donation, they can easily do so.
Over time, you might get MORE in donations, too. The average recurring donation is $31 per month, with donors staying an average of 18 months. That totals $558! That’s three times the amount of a one-time gift of around $175. Someone might only feel comfortable giving that $175 one-time gift, but if you offer the option to give monthly, they may be OK with $31 per month, too. That’s almost $200 more per year that they are giving, but they aren’t thinking of it that way. It’s also likely that donors will give one-time amounts on top of their monthly giving, especially for special events or specific dates. Classy reports that of all one-time donors who returned to start a recurring donation, a quarter made another one-time gift!
Heightened Sense of Loyalty
Above all else, they are invested if someone is essentially subscribing to your nonprofit. They want to feel involved, and like they are making a difference, so by allowing them to give recurring gifts, you’re playing into their desire to be loyal to a cause. With a retention rate of 85-95%, which is much higher than one-time donors, don’t underestimate loyalty.
Also, monthly donors are more likely to engage with your content, volunteer as needed, or help with other asks you may have. Think about it like a club. When you join a club, you bond with other people over a shared interest or cause. It’s the same with monthly giving. They feel connected to the cause because of their investment.
I hope I’ve convinced you that it’s time to start or invest in your own monthly donation program. It will make fundraising easier, but you’ll make more and have a more invested donor pool. So, here’s to monthly donations!