Online Fundraising
October 6, 2021

A Nonprofit’s Guide to Receiving Recurring Donations

What if you didn’t have to worry about the donation irregularities and could solely focus on fulfilling your mission and vision? A nonprofit thrives on the generosity of others. Therefore, encouraging recurring donors along with attracting new benefactors and converting them into recurring ones are potential areas that merit your attention. After all, a steady cash flow can support your organization’s cause and ensure its longevity and financial health.

Note that this does not mean that larger, one-time gifts should not be pursued. Recurring donations provide a more efficient way to maintain a predictable and dependable cash flow.

Did you know: Recurring donors are four times more valuable in the long run than one-time donors?  

In this article, we will clarify what recurring donations are, outline their key benefits, and share some ideas on how you can build an effective recurring donations program.

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What are recurring donations?

Recurring donations are monetary donations that are made to nonprofit entities on a regular basis, often periodically such as on a monthly, quarterly, or yearly basis.

Like utility payments, donors can set up recurring donations to be automatic payments from their bank accounts or credit cards, making it convenient for them to give to their favourite charities or nonprofits. On the other hand, for organizations, recurring donations enable income prediction and can be extremely useful in planning and budgeting.

Benefits of recurring donations

Here are some key benefits of recurring donations:

1. High donor retention rate

According to the Nonprofit Recurring Giving Benchmark Study, monthly donors have a high retention rate of up to 90%. More importantly, repeat donors are more loyal and committed to your cause and offer a much higher life-time value to your organization.

Related: How to Build a Donor List with Virtual Fundraisers

2. You don’t have to make repeat asks

Some donors don’t like it when nonprofits frequently reach out to ask for donations. But when they sign up for repeat giving programs, donation payments are usually made automatically with no additional effort from the donor or the organization.

3. Better financial prediction

Projecting future donations can be a big challenge when you rely on one-time gifts or pledges. Additionally, money that was pledged but never received can disrupt plans. Recurring donation programs make it easy to predict funds and help organizations follow through on their planned initiatives.

Top fundraising campaign tips that can ensure recurring donations

Your goal, as a nonprofit, should be to build lasting relationships with donors while providing them with an easy and convenient way to support you. Here are some tips to successfully get your donors to commit to recurring donations:

Plan your monthly recurring donations program well

Having a written plan of action is a good way to start when you are still in the strategy-development phase of your giving campaign. Without clear goals, it can be difficult to reach your targets. A well-planned campaign makes it easier for your donors to see the big picture and understand how their contributions are impacting lives.

Before launching any program, brainstorm with your team and answer the following questions:

  • What does your nonprofit intend to achieve with its recurring donations program?
  • How will these donations contribute to your vision and mission?
  • What change would come about as a result of you achieving your goal?
  • How many donors would you need to reach your financial goal?

Use online charitable raffles to build engagement and attract donors

Another great way to build a pipeline of donors is through an online charity raffle. These raffles use technology to sell tickets, select winners and distribute prizes while gamifying the process of raising money for your cause.

50/50 and Catch the Ace are the two most common raffle types used to raise funds. The best thing about using online charity raffles is that they give participants a chance to win prizes while contributing to a worthy cause. Due to the nature of these raffles, draws can be held over several weeks or months, providing donors a lucrative opportunity to participate by buying tickets multiple times as the pot grows. Online charity raffles are a fun way to develop relationships, build a supportive community of donors, and foster engagement.

Segment your communication for recurring donors

It is important to segment recurring donors into a separate group (because they are!) and pay attention to how you communicate with them. Show them your gratitude. Let them know that you appreciate their continued support, regularly update them about the change they are helping you bring about and maintain a relationship that keeps them interested in your work.

To begin with, place them on a separate email list. The idea is to send them relevant messages. If they are included in your generic donor email list, they might receive messages requesting them to give monthly when they already do. This may come across as annoying and can make them feel that you are not paying attention to their commitment. Approach communication with recurring donors as a chance to nurture your relationship with them and turn them into lifelong partners and allies.

Related: An Introduction to Online Gaming-based Fundraising for Nonprofits

Public support for charities is at an all-time high with people regularly contributing to missions that are close to their hearts. Today, an average American supports 4.5 charities in a year with over 60% of millennials donating an average of $481 to nonprofits annually. Recurring giving programs are an efficient way to raise funds for your nonprofit. If you don’t already have a recurring donations campaign in place, now is the time to get started and create one.

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