Donor Cultivation

What Are Recurring Donations?

November 10, 2023 | 4 min Read

Recurring donations are gifts to a nonprofit organization made by a donor on an ongoing basis, typically monthly. Nonprofit organizations benefit from recurring donations because they provide consistent revenue streams and help organizations maintain long-term relationships with supporters.

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Importance of Recurring Donations

Nonprofit organizations often rely on recurring donations’ predictability to plan their budgets. For example, they can expand their operations by hiring new staff or budgeting for a multiyear capital project. As a result, organizations can demonstrate growth and impact to donors while strengthening their commitment to the mission. 

In addition to financial flexibility for organizations, recurring donations make charitable giving more convenient for donors. And donors like it. 57% of donors are enrolled in a recurring giving program, up 46% from the previous year according to a 2023 360MatchPro study.

The trend leans heavily toward a monthly gift cadence, with 94% of recurring donors preferring to give monthly. 

Recurring Donation Benefits

Here are some additional ways recurring donations benefit nonprofit organizations: 

Attracts New Donors

Attracting new donors is a challenging process that involves time-consuming marketing outreach and financial investment. By showing the number of recurring donors, organizations can provide to new donors social proof of their position in the community, highlighting the organization’s financial health and showing its long-term commitment to the mission. Recurring donors lend credibility to the organization and help influence prospective donors’ decision to donate for the first time and even become recurring donors themselves.

Maximizes Total Donations

Transitioning a one-time donor into a recurring donor is less challenging and less costly than acquiring a new donor. Make it appealing to prospects by highlighting the convenience of “set-it-and-forget-it” recurring donations. Also, tout the tax benefits of sustained giving to grow your donor pool and overall revenue.

Increases Retention Rates and Donor Life Cycle

With each recurring donation, your organization may send thank-you notes with suggestions to stay engaged beyond financial support. Inspiring donors to take action in their community and advance your mission  ultimately increases donor satisfaction and improves retention rate and donor life cycle. 

How to Prioritize Recurring Donations in Your Campaigns

While every nonprofit organization is different, there are some common factors in all successful recurring donation programs.

  • Clear Goals: Every recurring donation program should start by identifying the goals of the campaign. Communicate the importance of those goals to existing and prospective donors, and highlight the benefits of recurring donations (over one-time donation) to both the donor and to your organization’s goals.
  • Energized Marketing and Acquisition: Once the goals of the recurring donation program have been identified, ensure donors are aware of their giving options and how the donation process works. Utilize email marketing to reach potential donors and convert one-time donors into recurring contributors. Show donors why their contribution matters to your mission.
  • Streamlined Access: Make sure your online giving forms highlight an option for recurring giving, with a suggested monthly gift level. Your platform should provide several methods for donating, generate receipts for tax purposes, and allow for modification of the donor’s payment information. 
  • Donor Management: All donation platforms should provide reports and real-time tracking information for every gift, including recurring donations. This data is important for donors to access for tax purposes. Impact reporting derived from this data also allows you to show donors how their contributions make a difference over time. For your organization’s staff, donor data provides valuable information about trends and the life cycle of a one-time donor versus recurring donor, ultimately helping your team create strategies to mitigate donor attrition.

Upgrade One-Time Donors to Increase Donations 

One of the most effective strategies to increase participation in recurring donations programs is converting one-time donors. Those who have made a donation before are already aware of your mission (which they’re aligned with) and have already made a financial commitment in the past. These donors are likely to donate again. Offering a recurring donation option could be an easy upgrade to their commitment level. According to 360MatchPro, nonprofits that created a simple pop-up message asking a donor to upgrade their one-time gift to a recurring donation realized a 64% increase in monthly donations.

The most effective way to convert one-time donors into recurring donors is by providing recurring giving options that are convenient for them. Nonprofits should promote the message that making a recurring gift is easy and it creates a lasting impact. Get the point across by highlighting a monthly giving plan on the homepage, spotlighting an outcome made possible by sustaining donors, and including recurring gift options in all newsletters. 

How Donor Management Software Can Help Manage Recurring Donors

Consider the fundraising elements of a healthy donor network: marketing campaigns and analytics, research efforts, database maintenance, fundraiser performance tracking, and donor communications. Donor management software consolidates these time-consuming processes to make it easier for organizations to utilize donor metrics. Some of the benefits of embracing donor management software for recurring gifts programs include:

  • Data Collection: Donor management software easily consolidates your vast data archive. Your data can deliver valuable metrics on donors, volunteers, and your team’s performance, allowing you to spot opportunities to adjust or optimize the donor life cycle. Donor management software simplifies integration with existing software tools to synergize fundraising, acquisition, and retention efforts all in one program.
  • Marketing Analytics: Donor management software can maximize response rates and revenue across marketing and engagement programs. This makes it easier to visualize and benchmark fundraising performance to identify opportunities for improvement.
  • Automation: Nonprofits can save valuable resources with the automated functionality offered in donor management software. Generate scheduled analytic reports and set task reminders to encourage recurring donations. Lapsed donors can be retained by automating certain donor touchpoints, such as birthday greetings.
  • Prospect Research and Donor Insights: The success of any nonprofit is rooted in continual recruitment, and donor management software helps identify high-level giving opportunities within a database. Additionally, this software helps simplify the process of determining which one-time donors might be converted to recurring.

How Blackbaud Can Help

Manage recurring gifts and enhance fundraising results with Blackbaud software solutions. As one of the most respected sources of nonprofit fundraising technology, Blackbaud and its team of experts is ready to help you streamline the recurring donation process. Elevate your organization’s recurring donation program by requesting a demo with Blackbaud today.

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Blackbaud Staff

Blackbaud Staff

Blackbaud staff contributed this article.

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