Most nonprofits are sold on the idea of recurring donations, but it’s a whole other thing to get the program up and running. And it can take even more time before meaningful revenue begins to stream in through these repeat gifts.
Not only can recurring donations encourage donors to give more than they would with a one-time gift, but they also give nonprofits greater visibility into their expected revenue, allowing them to make more effective decisions over the short term.
But you’ve likely landed here because you know the value of a recurring donor program — there’ve just been a few bumps along the way.
In case you’re still on the fence, we’re going to talk about the value of recurring donor programs quickly. Then we’ll dive fully into some of the larger obstacles nonprofits face and ways for them to put those obstacles in the rear-view mirror.
I already let the cat out of the bag on this one. The single best reason why you should start encouraging recurring gifts is because donors who sign up statistically give more money than those who don’t.
360MatchPro calculates, “The average monthly gift is $24, resulting in an annual donation total of $288, outpacing the average one-time gift of $115.”
I bet your nonprofit would be able to make the world even better if budgets were a little larger. And that $288 average is more than two times the one-time average. That’s no joke!
But the second most important reason is this: knowing how much you’ll receive in donations, at least as a base amount, will help your nonprofit make the best decisions it possibly can today.
The best planning requires good data. If your nonprofit relies on one-time gifts at the end of the year, you’re likely always stressed to see how it all plays out. And you likely can change little as the year comes to a close. But with recurring donations, you may not know the final figure, but you certainly have a better bet.
This can go a long way while projecting budgets for the next year, or it may help you recognize who your ideal audience is and allow you to learn how best to engage with them month after month.
And if these two reasons aren’t good enough for you (I’d be surprised if the first one wasn’t enough: more money!), we’ve got one more: younger generations are almost too comfortable with subscription models. Based on a report by Vantiv, 92% of millennials are subscribed to at least one recurring service.
So by launching your recurring donor program, you may be simultaneously helping to develop a new generation of givers.
So now that we’re all in agreement about how important recurring donor programs are for nonprofits, let’s jump into some of the larger obstacles along with ways to overcome them:
Response #1: It’s time to jump feet first into the digital world of online donations. Double the Donation found that “63% of donors prefer to give online with a credit or debit card, followed by direct mail (16%), PayPal (10%), wire transfer (5%), cash (4%), digital wallet (1%), and text-to-give (1%).” In 2024, M+R Benchmarks calculated that “Revenue from monthly giving increased by 6%, and accounted for 31% of all online revenue.”
All of this is to say that there are excellent solutions for setting up your website to better capture these donors. Double the Donation even has a list of their top nine recommended payment processing solutions. But what isn’t an option is putting off recurring donations for another year. There’s simply too much money on the line!
Example of a recurring donation landing page by Grace Marketplace
Response #2: Patience is a virtue when it comes to recurring donor programs. But there’s also a time to reassess if you’re pitching your mission as effectively as you can. Here are a couple questions to ask yourself as you do the hard work of self assessment:
Personal opinion #1 (with some good reasons too): From my personal experience giving — and based on the fact that 63% prefer to give online with a credit or debit card — it isn’t worth penalizing donors for doing the action that’s most convenient for them.
I regularly give to an organization that would prefer for me to give through my bank account, as the fees are 1% for those transactions compared to 3% for a credit or debit card. I don’t always have a checkbook on hand like I almost always have my credit card nearby, and a few times I’ve told myself, “hey, I’ll get my checkbook tomorrow and make a donation then instead.”
I’ve remembered to give because it’s an important organization to me. But what if this is their first time and they’re still on the fence? NextAfter tested and found that the dropoff rate in conversions doesn’t justify the times when donors cover those small fees.
Response #3: At the end of the day, even though you’re a nonprofit, you’re out there selling your mission. And people will cancel their subscription to Netflix if they aren’t binging enough TV. What’s the incentive for someone to continue giving to your organization?
360MatchPro found that, “91% of organizations stop acknowledging recurring gifts by the third month.” That’s not good!
Regularity of communications or even a simple automated thank-you email may be step one. But to take it even one step further, breaking your key audiences into smaller groups, or segments, gives you the ability to engage with donors in a more personal and nuanced way.
At the heart of recurring donor programs is the reality that you’re building lifelong relationships with your supporters. It’s nice when someone gives a large, one-time gift. But it’s a lot more exciting to walk with a donor month after month and year after year, seeing the impact you can make together.
If you’re looking for ways to better engage your community online — from email automation to digital ads — look no further! We believe it’s the perfect time for nonprofits to get their message out to new audiences, including younger donors.
Reach out and see if Feathr is the all-in-one marketing platform for your nonprofit.