Soliciting Recurrent Donations
Recurring gifts have a significant positive impact on fundraising and sustainability by providing a more stable, predictable revenue stream while enhancing donor retention.
According to Giving USA, nonprofits with sustained recurring giving programs reported substantial increases in revenue, sometimes more than doubling over four years. Because maintaining recurring donors generally costs less than acquiring new one-time donors, this gives you a better long-term return on your fundraising investment.
Recurring giving also fosters stronger engagement and a heightened sense of community among your donors, leading to greater trust and future giving potential. Because these donors have made a long-term investment in your organization, they feel greater ownership and pride in you and your programs, making them more likely to continue to invest. Research supports this notion, finding that organizations retain recurring donors at 2.6 times the rate and 9 times the lifetime value of newly acquired ones.
Recurrent donors also generate a consistent revenue stream that helps you smooth income fluctuations, particularly across major giving cycles or economic downturns. Rather than getting a lot of money at the end of the year or when grants pay, you receive a consistent amount of money each month which allows you to better budget and plan cash flow.
Still not convinced? Consider that Virtuous’ modeling shows that if 10% of your sporadic donors become recurring donors, you can boost five-year fundraising revenue by more than 70%.
So how can you build your number and value of recurrent donors?
Emphasize recurrent donations in each fundraising appeal. Better yet, instead of asking for a fixed amount, ask for a recurrent donation! You will likely raise more money because it will feel less intimidating to give $10 per month than $120 – yet you will receive the larger amount.
Ensure that your online giving allows for recurrent donations – and highlight the option on your website. If it does not, switch online giving platforms. In the long run, the cost and hassle will more than pay for itself.
Ask major donors for recurrent gifts. If they pay quarterly, ask them if they would consider extending that quarterly gift for more than one year.
Accept credit cards and electronic fund transfers. You may pay a small (or even not-so-small) fee, but the convenience for your donors will more than pay for itself as you do not need staff time to follow up on missed payments each month.
Do not forget about your recurrent donor and let them languish. Steward them as you would any other donor. Thank them for each donation – online systems will do this for you – and visit or send them a personalized report at least once a year. Year-end tax receipts can do this for you; add a personal note to make it feel less like a form letter. Consider creating a dedicated giving recognition program for recurrent donors. And don’t forget to ask them to increase their gift periodically.
When done right, recurrent donations can relatively easily grow your philanthropic revenue without a concomitant increase in effort. Smart, huh?!
