Learn How You Can Encourage More Donors to Make Recurring Gifts
If recurring gifts make up a small percentage of overall giving, should we really spend time developing recurring gifts?
Yes, definitely! Recurring gifts are an important part of any well-rounded fundraising program. A study conducted by Network for Good showed that monthly givers donated 42% more in a year than one-time givers.
How do recurring gifts work?
Typically, recurring gifts are made monthly or quarterly. Nonprofits can offer donors the opportunity to sign up for a recurring gift either online or via a gift envelope. When a donor signs up for a recurring gift, he or she gives the nonprofit permission to charge the donor’s credit card or debit their bank account through Automated Clearing House (ACH) payments. The nonprofit will then receive a monthly contribution from the donor, which will then appear on their credit card or bank account statement. Some software applications automate this process so that the nonprofit doesn’t need to process the payment each month.
Why are recurring gifts important?
Recurring gifts from loyal donors who give on a monthly or quarterly basis contribute to the long-term sustainability of the nonprofit organization. Recurring gift represent ongoing income the nonprofit can count on, which allows nonprofit leaders to plan for the future with more certainty. Monthly giving can provide the stability that nonprofits need to take the risk that comes with growth. If a nonprofit can count on recurring gifts to help fund ongoing operations, then it can pursue other funding sources for new programs or to increase the number of people it serves.
How does a recurring gift differ from a one-time gift?
The beauty of the recurring gift is that the donor only needs to make the initial decision to contribute, and then the contributions are handled on the donor’s behalf at regular intervals. Nonprofits can enjoy ongoing income from a single decision rather than having to appeal to the donor each month for a separate gift. Donors enhance the value of their gift by making it recurring: a one-time gift of $120 is less valuable than a recurring monthly gift of $10. The sum over twelve months is the same; however, the added value of sustainability over time is what makes the difference in value.
One may argue that a bird in the hand is better than three in the bush. It’s true that donors can change their minds over time and cancel their recurring gifts; however, most donors become accustomed to the regularly scheduled contributions and find that recurring gifts make it easy to be generous and contribute to a cause they care about.
Should we continue to ask them for gifts?
Nonprofits should continue to appeal to donors who make recurring gifts. However, the way you appeal to your donors in the recurring gifts program should be customized to this group. For this reason, it is important for you to track donors in the recurring gifts program and segment your list so that you are communicating with them specifically, in a way that is distinct from the rest of your donor population.
Why is it important to communicate with them differently?
Think about how you would feel if you signed up to make a monthly gift to your favorite nonprofit and the nonprofit continued to send you requests for donations as if you had never made the monthly commitment to them. You may feel that they don’t know you or don’t appreciate the monthly sacrifice you made in order to commit to a monthly gift.
Your communications with donors in the recurring gifts program should focus on thanking them and sharing with them the impact of their gifts. When you ask for a gift, it should sound to them like you know them as a donor. More than that, you should indicate that you know they have made an ongoing commitment through a recurring gift. Each time you make a new appeal is another opportunity for you to thank them for the commitment they already made. When you ask for another gift, you will be presenting them with a special opportunity to do something extraordinary to pursue the mission they are already invested in.
For example, you may want to give them an advance opportunity to make a gift, before a campaign is even announced. If you have a capital campaign coming up, you may want to ask your donors in the recurring gifts program to make a special gift during the “silent phase” of the campaign. If you are raising money for a new program, you may want to give them a sneak peek into your plans for the program and ask them for a special gift that will be used to help launch the program. If you have a one-time need, such as repairs due to damage from a natural disaster, you may reach out to them with an opportunity to assist before you appeal to the general public.
Contributions over and above their recurring gift should be acknowledged as such. Don’t just send a standard thank you letter. Make sure to acknowledge their ongoing commitment and thank you for going one step further by making a special contribution to fulfill a distinct need in the organization.
How do we encourage them to increase the size of their gift?
Over time, donors who made a recurring gift can be asked to increase the size of their gift. The frequency with which you make the ask for an increase will vary according to the relationship the nonprofit has with its donors. Nonprofits should communicate regularly with the donors who make recurring gifts and engage them in the mission of the organization. Nonprofits that do this well may ask more frequently and with more success than an organization which rarely communicates with its donors and doesn’t engage them well.
The invitation to increase the size of the recurring gift can be made on a consistent basis at regular intervals so that donors anticipate the request will be made and can even plan for it. For example, the organization may want to make the request annually on the anniversary of the initial gift. Alternatively, the organization may wish to make this request part of its annual appeal. Some organizations may choose to make a request for an increase more often than once a year. Each organization will need to make this determination in relation to their donors’ tolerance for solicitation. It is recommended that nonprofits get to know their donors by asking them directly about their preferences and by using data to evaluate donors’ responses over time to the nonprofit’s requests.
As with any gift program, creating levels can encourage donors to increase the size of their gift to reach the next level. Each level should correspond in some way to the impact that size of gift will have on the organization and its mission. Think about what your nonprofit can achieve with gifts of various sizes and tie that to various levels of giving. Give each level a name that corresponds with the impact. Use the name and a description of impact to advertise the levels and promote donors’ advancement from one level to the next. Acknowledge the donor’s advancement from one level to the next, both in your personal communications with the donor and also publically, if appropriate.
What can we do to encourage more donors to make a recurring gift?
Many nonprofits set up options for donors to make a recurring gift. However, a recurring gifts program should not stop there. There are many other things that nonprofits can do to encourage donors to make a recurring gift. Your nonprofit may want to set up a “club” for donors who make recurring gifts. The club should impart a sense of community and exclusivity. The club can be branded to underscore the identity of this unique set of donors who are sustaining the organization and ensuring the mission will endure. A “welcome kit” can be sent to new club members, which will help emphasize identity and exclusivity of their membership in the club. The club members should be reminded that the nonprofit is better positioned to accomplish its mission because of their commitment.
If your nonprofit has the capacity, you can offer social engagement opportunities and other benefits for the members of the club, such as a closed social media group, password protected area of your website, special receptions, club newsletter, small branded tokens of appreciation, advance registrations for events, and opportunities to introduce their friends to the organization.
Communications to the rest of your community of supporters can include spotlight segments about your monthly givers and how their gifts are making a difference. These stories should conclude with an invitation for all supporters to make a monthly recurring gift. You can highlight special benefits that members of the recurring gifts program receive, the most important of which is the certainty that they are sustaining the organization through their recurring gifts.
Your organization can set goals for growing your recurring gifts program and share your progress toward those goals with your supporters. Each time you encourage them to help you reach those goals, give them an update on your progress toward your goal and information on the impact that monthly givers are having on the organization. Invite members of the recurring gifts program to invite their friends, family and colleagues to make a monthly gift. Soon your monthly givers will become your fundraisers!