Why Nonprofits Need To Focus More On Recurring Giving
Matt Nash is the executive director of The Blackbaud Giving Fund, a donor-advised fund that connects nonprofits to generous donors.
A recent analysis by the GivingTuesday Data Commons found that increasing the share of new donors who sign up for recurring gifts by 10 percentage points could add $20 billion to the nonprofit sector each year. This predictable flow of funds offers nonprofits a stable source of funding, increased financial stability, ongoing donor support and increased engagement. With recurring giving, nonprofits can more effectively strategize upcoming programming and initiatives and make tangible progress toward achieving their mission.
But what classifies as recurring giving?
Recurring giving comes in several formats, including donations from credit cards, donor-advised fund (DAF) accounts or company-sponsored workplace giving programs. Each method offers donors the opportunity to “set it and forget it,” meaning they initiate a donation one time and schedule it to recur at regular intervals (weekly, monthly, quarterly, etc.). These methods provide automated and tax-efficient ways to contribute consistently, making it easier for donors to commit to ongoing support. Recurring giving allows donors to make valuable contributions without making a conscious effort each time they donate. Incorporating a few simple tactics into fundraising and communications strategies can help nonprofits enhance their efforts while giving donors opportunities to make a lasting impact with minimal effort.
Any size nonprofit can (and should!) incorporate recurring gifting into their fundraising strategies because it is valuable for nonprofits and the communities they serve.
Why Increase Your Focus On Recurring Giving?
Here are some key benefits of recurring giving:
Recurring donors commit long-term.
The retention rate for recurring donors is close to 70%. It’s incredible to know that once a donor consciously decides to support a nonprofit, the majority will continue their contributions. Additionally, someone who opts in to recurring giving will continue supporting that nonprofit for just over eight years, while a non-recurring giver donates to a nonprofit for a little over a year and a half. Thus, the benefits of encouraging existing donors to participate in recurring giving can far exceed encouraging one-time gifts.
High retention rates don’t happen automatically. Nonprofits must consistently nurture these relationships so donors remain invested and engaged.
Donors who continue to give, give more.
Half of recurring donors make additional gifts, according to research from Neon One. Their data also found that in 2022, the average annual donation total for recurring donors was just over $940. Between 2018 and 2022, nonprofits experienced an average of 127% growth in donors who gave regularly.
To put that in perspective, if a nonprofit had 20 recurring givers entering 2018 and experienced the 127% growth, by the end of 2022, they would have more than doubled that number to 45. If we consider the average yearly recurring donation ($940), the nonprofit could expect to see a jump from $18,800 from 20 donors to $42,300 from 45 donors. Imagine the impact a nonprofit could make with an additional $23,500 in funding!
Additionally, it costs a nonprofit less time and effort to cultivate and retain existing donors than to identify and retain new ones. Not only does a nonprofit have the opportunity to increase monetary donations, but it can also spend less time identifying new revenue streams—a win-win.
Recurring giving increases stability.
Investing effort toward maintaining current supporters could result in a larger and more stable revenue stream. Increased awareness of incoming funds allows nonprofits to track and project monthly expenses more effectively. Knowing this, nonprofits can identify opportunities for new or expanded programs and initiatives.
How To Encourage Recurring Giving
Now that the benefits are clear, here are some proven strategies to encourage recurring giving:
• Remind DAF donors they can schedule grants. Identify and inform donors that use DAFs about the option to schedule donations and emphasize how it can amplify their impact.
• Remind donors they can enroll in payroll giving for a series of payrolls. Depending on their employer’s giving programs, many employees’ donations have an accompanying corporate match, which can double or triple their original donation amount.
• Make your donation page easily accessible with a seamless user experience.Make sure the page is optimized for both mobile and desktop users to effectively reach donors across all platforms. This will help create a smooth entry point and reinforce the nonprofit’s reputation as a reliable organization.
Additionally, “pre-selecting monthly giving on your donation page can increase conversions of monthly donations by up to 35%.” This simple yet effective tactic can help boost donations and increase a nonprofit’s chances of meeting or exceeding fundraising goals.
• Build trust with donors by sending personalized communications that highlight the impact their donation has on the community. Leveraging AI is essential here. Use it to analyze CRM data to develop strategies to encourage recurring gifts. Make these touchpoints a regular part of stewardship plans to deepen relationships and encourage continual support.
• Promote the emotional aspect of your cause to encourage people to give and keep giving. Emotional storytelling should be an ongoing theme in all public-facing communications to reinforce the connection with the nonprofit’s mission.
Not A One And Done
Donors often disengage when they don’t feel appreciated or no longer feel a connection to the mission. Be sure to share regular updates to inform donors how their direct contributions have benefited the community you serve and how their ongoing support will continue to make progress toward achieving your mission. Offering a variety of donation methods, options for smaller monthly contributions, etc., can also help reach donors with different preferences.
By embracing recurring giving strategies, your organization can create a more stable revenue stream, build deeper donor connections and ultimately amplify its impact on the communities it serves. Implementing these strategies or enhancing existing recurring giving strategies can lead to a new era of meaningful impact.
