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Top 5 Reasons Every Nonprofit Needs Monthly Recurring Donations

Nonprofits have to find ways to stretch each dollar for the biggest impact on those they help. That’s why savvy nonprofits have started offering donors the option to set up monthly recurring donations.

As a nonprofit, if you don’t have a monthly giving program for donors, you are missing out on an opportunity to receive more money over an extended period of time.

How much money? Well, on average, a donor who sets up recurring donations gives 42% more per year than a donor who gives a one-time gift.

And it isn’t just about the money. There are many benefits of recurring monthly donations for both the nonprofit and its donors, not the least of which is predictable income for your organization.

In today’s post, I’m covering the top 5 reasons every nonprofit needs monthly recurring donations:

  1. To increase revenue
  2. To increase donor retention
  3. To decrease operating costs
  4. To provide donor convenience
  5. To build better relationships with more loyal donors

Learn more below!

Increase overall revenue.

We already mentioned that recurring donors give an average of 42% more per year than donors who give one-time donations. According to “Hidden Gold” author Harvey McKinnon, “the lifetime revenue of these [sustaining] supporters is 600–800% higher than annual giving donors.”

A little bit adds up. While donors may be hesitant to make a one-time $100 donation, they’re often comfortable with a recurring $10 monthly donation. Those smaller monthly payments add up to a larger annual sum than the one-time $100 gift they weren’t comfortable with.

It’s a win-win!

Increase donor retention.

“Over 70% of people that we recruit into organizations never come back and make another gift,” says Dr. Adrian Sargeant, Professor of Fundraising at the Lilly Family School of Philanthropy at Indiana University. Compare that to an 80% first-year retention rate for donors who give through a monthly giving program.

The convenience of online recurring donations is an important part of donor retention. “In many organizations, it’s shown that a donor who gives monthly by credit card or EFT will stay active [for an average of 4 years],” explains Jo Sullivan, formerly with the ASPCA (she helped grow their donor base from 8,000 to 140,000 during her 10-year tenure).

Decrease operating costs.

It takes more resources and expenses to recruit new donors than to engage with existing donors. You just learned that providing donors with the ability to make recurring monthly donations increases donor retention. Increased donor retention means lower operating costs!

With a monthly giving program in place, you reduce the pressure and effort associated with constantly soliciting sustaining donors. The result is a decrease in marketing, administrative, and even postage expenses. This is especially helpful for smaller nonprofits with limited resources.

Provide convenience for donors.

A lot of the discussion thus far has been about the advantages for your nonprofit, but having the option of sustained giving is a win for donors too!

Your donors’ lives are already designed around monthly recurring payments, such as for their cell phones, internet, movies, music, “box of the month” clubs, etc. Being able to support their favorite organizations/causes with a smaller monthly gift is convenient and affordable.

The affordability and convenience of online recurring donations is especially attractive to millennials—an important donor segment every organization should be looking to engage and retain.

Build better relationships with more loyal donors.

Communication with sustaining donors is less focused on solicitation and more focused “on how their gifts have made a real difference to the program and the mission of the organization,” points out McKinnon. And let’s face it, monthly donors appreciate that you aren’t emailing them as often.

Through recurring donations, sustaining donors regularly enjoy the “feel good” that comes along with knowing their support is helping others. So it’s no surprise that donors giving monthly donations tend to become more committed to your cause than donors who give one-time gifts.

Monthly donors are not only loyal and committed to your organization, they’re also more likely to attend your events throughout the year and champion your nonprofit to their friends and family (helping to recruit new donors!).

Conclusion

I think Sullivan says it best:

“I am passionate about monthly giving and think it is a way to build sustainable, predictable income, which can take a charity to the next level. Take the time and build it right, and you’ll be changing the fate of the organization you are committed to seeing succeed!”

Having recurring monthly donation options for donors is clearly a win-win for your organization and your donors. If your nonprofit isn’t offering a monthly sustaining giving program, you are losing out on money you can’t afford to ignore.

About the Author

Kate Harvey is the Content & Search Marketing Manager at Chargify. She enjoys writing about subscription businesses, startups, and remote work. You can connect with her on Twitter at @authorkate.