Two of the most common challenges nonprofits faced in 2023 were operating under unfavorable economic conditions and combatting staff burnout and low retention. Funding—or a lack thereof—is one of the main culprits.
Particularly, a lack of diverse and reliable funding sources can have negative effects on nonprofit operations and burden staff with more work. If your development team is always chasing the next donation, staff members could suffer from stress and burnout.
This is why it’s so important for nonprofits to set up programs that inspire donors to give regularly. In this guide, we’ll discuss recurring giving and how your organization can set up a program to diversify your funding sources:
- What is recurring giving?
- What are the benefits of recurring giving?
- How can your nonprofit start a recurring giving program?
- What are some examples from other nonprofits?
Consistent, monthly funding from recurring giving programs can enable you to pay for more projects and help more beneficiaries. But before you can get there, it’s key to understand what these programs are and how to set one up. Let’s get started!
What is recurring giving?
Recurring giving occurs when a donor opts to make regular donations to a nonprofit each month, making it a great way for nonprofits to fundraise. These recurring payments can be automated to make participating more convenient for the donor.
There are a variety of ways to implement recurring giving at your organization. In a basic monthly giving program, donors simply agree to donate a certain amount each month, often via automated payments. Another option is to create an exclusive club or membership program for monthly donors and offer some kind of incentive to join (e.g., branded merchandise or early access to event tickets).
What are the benefits of recurring giving?
A robust recurring giving program can be a game-changer for your organization and supporters. Specifically, these benefits include:
- Reduced strain on your staff. To recruit recurring donors, staff only need to put in the legwork of securing the first donation—from there, donations are made automatically without their help. However, it’s important to keep in mind that you will need to prioritize donor retention to keep participants engaged.
- Consistent donations. When you have a recurring giving program, you can count on a certain amount of funding coming in each month. This makes it easier to plan and budget on a shorter timeline, and you have more liquid cash available for emergencies and other special circumstances.
- Higher retention rates. Because your nonprofit only needs to secure one donation, you’ll see fewer lapsed donors when they are involved in your recurring giving program. Additionally, donors involved in recurring giving programs tend to be more loyal than passive donors when nonprofits have proper stewardship policies in place.
- More convenience for donors. Most supporters appreciate it when donating is as quick and easy as possible, which is why 63% of donors prefer giving online. Recurring giving programs allow donors to provide consistent support to their favorite cause without needing to lift a finger after the first donation.
Recurring giving programs can also be more cost-effective. Your nonprofit won’t need to spend as much time and resources on marketing initiatives to secure donations—in other words, your cost per gift will decrease.
Additionally, donors could end up contributing more to your nonprofit in the long run. For example, a donor might only remember to donate $100 twice a year, giving a total of $200. However, they may join your monthly giving program, commit to donating $25 each month, and give a total of $300 that year.
How can your nonprofit start a monthly giving program?
Starting one of these programs won’t cost your nonprofit much beyond your time and a little hard work. However, there are some preparations you’ll need to make to ensure the program runs smoothly.
Before you launch a program, make sure you have:
- Your leaders’ and board members’ approval
- A dedicated program manager
- A functioning, accessible website and donation page that integrate with your CRM or fundraising software
- Any necessary marketing tools
- Merchandise, gifts, or exclusive content (if you plan to offer program incentives)
Next, you’re ready to start developing the program. Here are the basic steps to follow:
Identify your target audience.
To recruit recurring donors, you can look both internally at your current donors and externally at potential supporters. Because you already have an established relationship with them, however, current donors are more likely to participate in the program.
Whether they’re an existing or prospective donor, those willing to join your recurring giving program must have the right:
- Affinity for your cause. This refers to a donor’s personal connection to your cause. For example, do they donate to similar organizations or fund political initiatives that align with your values?
- Capacity to give. Capacity indicates how much a donor is able to give. Estimate this metric by tracking wealth indicators like net worth and stock and real estate holdings. Remember that the donor needs to have enough discretionary income each month to participate in the program.
- Likelihood of participating. This refers to a donor’s propensity or tendency to do something. You can track a donor’s history with your nonprofit to better understand their giving habits and even look at their interactions with other organizations.
The way your supporters show their dedication to your cause depends on the involvement opportunities you offer. However, in most organizations, the ideal target audience for a recurring giving program will be made up of your most loyal, dedicated supporters. This could include those who’ve been donors for multiple years and those who donate often.
Additionally, remember to look for donors who get involved in other ways like volunteering or serving on a committee. Volunteers are 66% more likely to contribute financially and they’re showing a deep commitment to your cause by spending their time furthering your mission.
Segment your supporters.
Once you’ve identified the donors who are most likely to participate in a recurring giving program, look out for patterns and shared traits among them. While everyone in this audience may be interested in donating monthly, they won’t all resonate with the same messages.
This is why it’s important to segment your donors based on specific traits. By creating these groups, you can craft personalized, targeted appeals that speak to their interests and reach them on the right communication channels.
For example, let’s say you run an animal shelter and are ready to start your recurring giving program. Here’s how you can segment your audience and tailor communication strategies to each group’s preferences:
- Interests and affinities: Your supporters have varying affinities under the umbrella of animal welfare. You decide to create three segments based on the most common distinctions: dog people, cat people, and those who like both. Communications with cat people feature images of kittens, emphasize that their funding will help your TNR program, and tell stories about specific cats you’ve rescued in the past.
- Communication preferences: Each of your donors has one or two communication channels they engage with most often. You track responses to past marketing campaigns in your CRM and create segments for each major communication channel, such as email, direct mail, social media, and text.
- Demographics: Your audience consists of a variety of ages, so you create generational segments. Older generations respond best to more personal communication channels like email and phone calls while your Gen Z supporters would rather receive a short text message or like your Instagram posts.
- Engagement level: You create segments based on how often supporters interact with your nonprofit, such as by making a donation, visiting your website, or engaging with a social media post. You send communications with your most active supporters more frequently while less active supporters receive occasional updates.
After you get your program up and running, you may need to refine your strategies and add or remove segments. Remember to frequently check key performance indicators (KPIs) such as email open rates, click-through rates, and conversions to determine whether your messaging resonates with each group.
Promote the program.
Now, you’re ready to start promoting the program to your selected audience. To get started, you need to craft a compelling, overarching message for the campaign. In other words, why should your supporters want to become recurring donors?
This message will be different for each nonprofit, and you’ll need to tweak it for each of your audience segments. To get you started, here are some of the main reasons why donors may be inspired to donate on a regular basis:
- They can make a sustained impact—for many donors, making single, large donations is not realistic.
- Recurring giving programs make donating as convenient as possible.
- Monthly donors may form an exclusive community, making participants feel a sense of belonging.
- They may have access to perks like free merchandise, priority access to events, invitations to staff or board meetings, etc.
- Providing recurring donations allows your organization to use resources (e.g., staff time) more efficiently to work toward your mission.
Once you’ve crafted a unique appeal to prospective recurring donors, you’ll need to share it across multiple channels. Consider creating educational content about the program for your website. For example, you might write a blog post announcing the program and build a dedicated landing page that lays out the process of joining, how funds are used, any incentives you offer, and an FAQ section.
Then, share your message across your donors’ preferred communication channels. Make sure to tailor the format to the channel you’re using. While emails can be as long as 400 words, Instagram graphics should only contain a few lines of text at most. Additionally, prioritize eye-catching graphics for fast-paced channels like social media to ensure donors notice and engage with the content.
For a more information about how to market opportunities to get involved, check out our dedicated guide.
Create a donor retention strategy.
Once you’ve recruited donors into your recurring giving program, you might feel like your work is over. While you won’t need to secure each donation they make, you will need to make an effort to keep them enrolled in the program.
To retain donors, make sure to implement stewardship strategies such as:
- Asking donors for feedback. Send out surveys to your recurring donors asking for their honest feedback on the program. Include questions asking them to rate how satisfied they are and what they think you could do better. For example, perhaps donors are happy to support you each month but would like to hear more about the impact they are making.
- Thanking them for their support. This step is essential. Frequently send donors thank-you letters or emails that acknowledge their donations and express your gratitude. Make these messages personal by greeting them by name, mentioning the amount they give each month, and highlighting the sustained impact they have. Always thank them for the commitment they’ve made to support you each month.
- Offering incentives. As we’ve mentioned, you can offer gifts and exclusive experiences to donors to motivate them to join your monthly giving program. However, incentives don’t have to be tangible or cost your organization anything. Instead, you might give them a place on your donor recognition wall, mention them in your annual report, or highlight their support in your newsletter.
The donors engaged in your recurring giving program are your most passionate, dedicated supporters. Avoid taking this loyal support for granted by frequently showing your gratitude for their ongoing support.
What are some examples from other nonprofits?
If your nonprofit has never had a monthly giving program before, you may not know the best ways to promote it to your supporters. Here are a few examples from top nonprofits to inspire you:
St. Jude Children’s Research Hospital
St. Jude Children’s Research Hospital funds research for childhood cancer and other life-threatening diseases.
One of the ways that St. Jude promotes its monthly giving program is by adding a “Monthly” button to their donation form. This makes joining the program extremely quick and easy for donors. Additionally, it makes anyone donating aware that St. Jude’s has a monthly giving program without requiring them to sift through their website or seek out a sign-up page.
National Wildlife Federation
The National Wildlife Federation (NWF) is an American conservation organization that fights for conservation values and seeks to give wildlife a voice.
This organization provides two excellent examples of ways to inspire donors to join a recurring giving program. First, it offers members-only benefits to those who give $15 or more each month. The page includes images of the items members will receive throughout the year and breaks down all of the perks of the program, such as discounts on merchandise.
This organization also breaks down the impact that various donation amounts will have and divides the total monthly contribution into daily gifts. This highlights how a small, daily sacrifice adds up to a significant total impact.
The PAN Foundation offers financial assistance to those with serious medical issues, helping them afford treatment.
To encourage monthly donations, the PAN Foundation created an exclusive community of recurring donors known as the PAN GEMs. GEM stands for “Give Every Month,” and these donors receive exclusive newsletters, invitations to virtual meetings, recognition in PAN publications, and opportunities to share feedback and personal stories.
To educate donors about the GEM community, the PAN Foundation created a dedicated landing page that explains what a GEM is, features calls to action, lists the benefits of being a member, features stories and testimonials, and notes that a monthly gift of just $50 covers treatment costs for an entire year.
Recurring giving programs deliver exactly what your nonprofit needs: consistent funding. Not only do these programs help lighten your staff’s workload and help you raise more money throughout the year, but they’re also more convenient and rewarding for donors who want to make a difference.
As you get more comfortable running your recurring giving program, consider branching out to other funding sources to boost your revenue. With CSR initiatives like matching gift programs, for example, donors’ employers will match donations they make to your nonprofit. This can double the donations you receive from donors without them needing to contribute each month.
For more help improving your nonprofit’s recurring giving program and maximizing revenue, check out these resources:
- Donor Retention: A Comprehensive Guide + 6 Strategies. Discover more strategies for retaining both monthly and one-time donors.
- Hiring a Google Grants Agency in 2024: A Guide & 5 Agencies. Considering using Google Ads to market your recurring giving program? See how working with an agency can boost your results.
- How to Market Matching Gifts: The Comprehensive FAQ Guide. If you’re curious about other ways to grow your revenue, check out this guide to learn how to promote matching gifts and increase your CSR earnings.