Recurring Donations: Building a Stronger Fundraising Model

Recurring Donations: Building a Stronger Fundraising Model

More and more nonprofit organizations are building their fundraising models around recurring donations. Why? Because they provide an incredible level of reliable support for your mission.

Recurring donations should be the bedrock of your fundraising strategies, the foundation of your monthly revenue from fundraising.

By building out a strong program for incentivizing and then securing these donations from your supporters, you can free your organization from the year-to-year (or even month-to-month!) struggle of keeping operations afloat. Running a nonprofit organization is hard work primarily because it’s such a huge challenge to gain that initial foothold.

So many smaller orgs struggle to get up and running at a sustainable rate, but there’s no reason for it to be that hard today! Recurring donations are within reach of every nonprofit, and we’ll show you how to start getting them for your own mission. We’ll walk through these main points:

 

In today’s digital environment, there’s absolutely no reason for high barriers to entry for nonprofits anymore. We’ve written before on the best software for growing organizations and the best ways to convert more donors with your donation page. Our goal is to help more nonprofits do more good in the world, and snagging more recurring donors is one of the best ways to start building a solid fundraising foundation for your mission.

 

Let’s get started:

 

The Basics of Recurring Donations

 

Ok, so you know that recurring donations can unlock a whole new level of stability for your organization. Having a solid segment of recurring donors can free up a lot of time to focus on long-term concerns, like building more effective strategies for your major campaigns, for events, for whatever, and not on putting out short-term fires.

But let’s assume you have no clue how to begin snagging more recurring donors. Let’s start with the fundamentals.

 

So, what is a recurring gift?

 

A recurring gift or recurring donation is made by a donor on a repeating basis, usually once a month. The donor picks the amount they want to give each period, and then the donation schedule is recorded in your CRM system or donation tool in order to complete the donation requests on the correct timeframe.

Check out this article on how payment processors handle recurring donations for a more technical explanation.

 

Why are recurring donations so important?

 

Recurring donations are extremely important for nonprofits. They’re becoming more popular than ever, both with donors and with fundraising professionals.

Here’s the most obvious way to put it — they secure more financial support for your nonprofit!

But there’s so much more to why recurring gifts are so valuable. Think of it like this:

 

  • Smaller, recurring donations are often an easier sell than a large, one-time donation. Recurring gifts then provide more long-term lifetime value per donor.
  • Recurring gifts provide a much more stable and predictable source of revenue. This can relieve a lot of stress and give you more flexibility to plan more long-term strategies.
  • Regularly supporting your mission without needing to manually make a donation provides an excellent experience for recurring donors.
  • It lets you focus more on sharing updates with donors instead of asking for new donations. This builds much stronger emotional connections with your mission, which helps boost overall retention and lifetime value per donor.

 

The benefits of recurring donations compound (like how interest compounds in a savings account) in a way that even tons of one-time donations simply don’t. The long-term value of recurring gifts is huge and can’t be overlooked.

 

Do donors like them?

 

Yes, they do.

 

Put simply, giving feels good. It’s why donors make donations in the first place. By offering a structured way for them to give more often, even if in smaller amounts, you can maximize those good feelings while also minimizing friction in the donation process.

By scheduling the donations ahead of time and then automatically processing them, you eliminate the risk that a clunky donation tool or glitch on your site drives them away. Instead, your recurring donation structure keeps up a constant connection.

Or here’s a more practical take on why donors like recurring donations: we’ve all become online consumers, and it’s changed how we like to make transactions. Think about the growth of subscription-style businesses in recent years. Consumers want the simplicity of a set-it-and-forget-it model for their goods and services, whether they’re digital video content, household goods, or donations to their favorite nonprofit organization.

 

How do I accept recurring donations?

 

Use an online donation tool that offers intuitive recurring gift options. That’s all there is to it.

You should be able to customize the preset gift amounts and transaction schedules that will be suggested to donors, but the donation tool itself will do all the heavy lifting.

Check out our buyer’s guide to online donation platforms for a more comprehensive overview of the kinds of features that make a truly valuable donation tool.

 

So, how do I get more recurring donations?

 

Build out a strategy to secure more recurring donors.

 

Just like reaching any other fundraising goal, you’ll need to develop a strategy for securing more recurring donors for your nonprofit. Here are a few general tips you can use to begin building out a framework for a recurring donations strategy:

 

  • Check out your current performance metrics. What’s your current yearly retention rate? Do any of your donors already give on a very regular basis? Strong retention is a good sign that your donor base would appreciate having a recurring option.
  • Set some concrete goals. You can’t build a very effective strategy without a way to measure success. You might want a certain percentage of your revenue to come from recurring donations by the end of the year, or you could simply shoot for having a specific number of active recurring donors.
  • Try surveying donors. If you have an engaged and loyal core base of donors, why not just ask them if they’d be interested in setting up a recurring monthly donation? Emotional connections are powerful — if a donor has given to you several times, that means supporting your mission means a lot to them.
  • Offer the right options. Analyze your donation data. What’s the average gift amount? Your donation tool should let you set amount options, so make sure you don’t ask donors for more or less money than they’ll be most likely to give. Remember, the second lowest amount option tends to be the most popular simply because it’s the second lowest!

 

As you begin building out your strategy, think about the bigger picture of the donor’s experience while making a gift online. This is a crucial factor that way too many nonprofits forget about. It’s also what guides our own fundraising philosophy here at Snowball.

 

Here’s the Snowball fundraising formula:

 

Step 1: Don’t kill the donor’s buzz!

 

We’ve mentioned this a few times so far. Remember, when it comes to fundraising, emotions should be the driving factor. When a donor feels the impulse to give to your cause, it’s because your mission and message really resonated with them. They want to feel good about helping you make a difference.

That means it’s your job to do everything you can to help donors quickly make their gifts and keep feeling good about it.

This relates directly to the donation software and website tools you use. The online donation process has to be completely streamlined from start to finish. Think about shopping cart abandonment — we tend to simply give up on transactions that take too long, don’t work well, or ask too many questions.

That’s why we design all of our fundraising software here at Snowball with the donor’s experience in mind. Speed, ease, and convenience make a huge difference.

 

Step 2: Master the art of securing a card.

 

Once you’ve completely streamlined your online donation process, it’s time to shift your focus to building stronger relationships with donors.

On the human side of things, this involves encouraging more emotional connection to your work. Thank donors for their support, keep them updated on your operations, and engage them with plenty of extra opportunities to get involved.

On the technical side of things, though, building stronger relationships means convincing donors to save their card information with you. 

Think about eCommerce again — how many online stores do you both buy from often and trust enough to bother creating an account and then saving your credit card information? A donor taking those extra steps is a very big sign of their emotional connection to your mission.

Creating an online account is usually a pain, involving a ton of manual entry of information. Again, let the donor’s experience guide how you handle online account creation for your own organization. Keep things easy and unobtrusive to show that you respect their time.

397 out of 1,000 online donors created accounts when using Snowball donation pages thanks to our streamlined, pledge-style approach to fundraising. The industry average for account creation is 0 out of 1,000 first-time donors.

 

Step 3: Promote recurring donations.

 

Once you’ve streamlined your online processes and built strong, emotionally fulfilling relationships with donors, it’s time to make the push for recurring donations.

Already having a credit card on file makes it much easier to persuade donors to set up recurring gifts. They won’t have to think too hard about it because there’s no need for them to input new information. The whole process can stay focused on the emotions that drive philanthropic giving in the first place. 

Use this 3-step framework to help guide your recurring donation strategy. It’ll help your organization keep its sights on what matters most — building relationships, respecting donors’ time, and raising more support for your mission.

Extra Tips for Snagging More Recurring Donors

 

You’re well on your way to building a strong recurring donations strategy. Review a few extra tips as you start refining your plans:

  • Prioritize recurring gifts in your marketing materials. If you’ve taken the time to build out an effective strategy, you should be shouting about your recurring donations program from the rooftops! Your website, social media feeds, and donor or member newsletters are the perfect places to start. You might not incorporate recurring donations into campaign-specific materials, but they should always be mentioned in your general or year-round fundraising efforts.
  • Illustrate tiers of impact. By this, we mean to show your potential recurring donors the impact that each amount option can have — $10 a month will help the animal shelter replace worn-out chew toys, $20 a month will make sure there’s always plenty of food for every dog and cat, and $50 a month will help us travel to adoption days around the state to help more pets find new homes. Illustrating impact is always a good idea because it reinforces emotional motivations with concrete examples.
  • Foster community around your donors. Don’t forget to incentivize recurring donations in the first place. Create a simple membership program with levels of special perks corresponding to each recurring giving level. Merchandise, free event tickets, and special newsletters and updates are all great motivators for donors who already love your nonprofit and want to deepen their engagement. At the very least, publicly thank your recurring donors with some extra recognition whenever possible.

 


There you have it, the ins and outs of building an effective strategy and securing more recurring donations. It takes both technical support from the right fundraising tools and careful thought around the donor experience, but remember that any organization can create a more stable financial foundation for themselves with the help of recurring donors.

Remember, make it technically and emotionally easy to support your work and you’ll be building stronger relationships with donors than ever before. Keep refining your fundraising strategies with some additional resources:

 

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