Recurring Revenue for Your Nonprofit Organization
Monthly giving is an important part of any nonprofit’s development plans. Whether your organization promotes literacy, shelters animals, or provides medical treatment, recurring donations are especially valuable because they are a reliable source of income.
We studied a variety of organizations’ monthly giving programs to identify some best practices. In this post, we’ve gathered three principles to follow when planning or updating your own program. Take a look at the examples and think about how your nonprofit can use these techniques to build a strong foundation of monthly revenue.
1. Break it Down for Donors
One of the keys to convincing your supporters to make a monthly commitment is explaining why you need recurring gifts and what impact they have. Donors want reassurance that their monthly gift is going to make a difference, so it is important to explain exactly what that donation will accomplish. Team Rubicon, an emergency response organization, created this awesome infographic to show how different giving levels impact their operations.
Not only does this chart translate a gift size into results, but by emphasizing the need for training, Team Rubicon subtly shows why a disaster relief nonprofit needs support year-round. Training takes time, and time is on short supply when a tornado hits.
UNICEF also explains donations in concrete terms. They even take it a step further by framing a monthly donation by its daily cost. If someone thinks they can’t afford to give monthly, their banner reminds them that they can feed hungry children for only fifty cents per day. A monthly gift doesn’t sound so daunting when you realize you have today’s portion between your couch cushions.
Take a look at your own appeal for recurring donations and think of how you can make the ask simple and concrete. If you already have suggested giving levels, add a short description of what that amount buys for your programs. If you are looking to add small monthly gifts from younger donors, break down the size of the gift. This technique has long been used by for-profit businesses. A car buyer might be scared off by a $20,000 price tag, but the dealer might mitigate this by advertising low monthly payments. Highlighting the per-day cost of a monthly gift is another way to show donors that a recurring gift is affordable.
2. Make Monthly Giving an Upgrade
When a store sells a product, it is a simple two-party transaction. The customer gives the business money and the business gives the customer a product. Both parties are exchanging one value for another. But in the case of nonprofit organizations, the transaction is more complex. In many cases, the donor gives money to the organization and the organization then gives services to its target population. The donor doesn’t receive the same obvious return of value that a customer does.
That doesn’t mean the donor doesn’t gain satisfaction in the long run, but it also puts nonprofit organizations on double duty. They need to deliver their programming to the populations that need it, but they also must provide satisfaction to donors if they are to keep them. This is especially true in the case of recurring donations.
Donors probably understand that giving monthly will help your organization do more good, but their day-to-day life will largely go unchanged if they switch from a one-time donation to a monthly gift. Nonprofits need to create some extra value for donors to encourage them to make this commitment. An inexpensive way to add this value is to tie a monthly donation to a special status or membership within your community.
For example, Habitat for Humanity calls their monthly donors HopeBuilders.
When you join Habitat for Humanity’s HopeBuilders, you will join a special group of people reaching out each month to provide affordable housing for families around the world. Together, we can eradicate poverty housing.
The organization presents a recurring gift as a way to gain entry to a “special group.” Many people pay dues to be part of a country club, a fraternity, or a professional association because of the status and belonging such groups offer. Nonprofits can use similar motivation to recruit monthly donors.
The American Red Cross describes their Red Cross Champions as “a special, dedicated group.” They know that separating their monthly donors with a distinct title delivers a little extra value.
If you haven’t already created a special community for your recurring donors, consider changing the language of your appeal to set apart supporters who choose to play an ongoing role in the development of your nonprofit. This lets your audience know that you recognize their extra support.
3. Segment Your Communications for Monthly Donors
This tip relates back to the second because it is about treating your monthly donors as a separate group. By paying attention to how you communicate with recurring donors, you can continually celebrate their support and maintain a relationship that keeps them interested in your work. This doesn’t have to be a complicated process.
Start by making sure that recurring donors are placed on a separate email list – the goal being to send them only the messages that apply to them. For example, if they already give monthly, appeals asking for recurring donations aren’t just wasteful, they may even irritate the donor. It sends the message that you aren’t really paying attention to their commitment.
Monthly donors can still receive appeals for one-time donations, but they should be reserved for your big campaigns. After they have been giving for a significant period, you can bring up the topic of increasing their monthly gift. Again, these asks should be used sparingly to avoid appearing ungrateful.
Rather than sending your general appeals, use emails to update recurring donors on the progress you are making and emphasize their contribution to your work. You should continue thanking monthly donors as long as they keep giving. It reminds them of the good they are doing and of your gratitude.
Oxfam America sends their Pledge Partners (monthly donors) a quarterly magazine and progress updates. Although more and more donor communications are through email, a printed newsletter for monthly donors is a physical reminder of their involvement with your cause.
Think of communications with recurring donors as a chance to nurture relationships. By making some adjustments, you can reinforce their satisfaction and cultivate a lifelong donor and advocate.
Make Monthly Givers Investors in Your Cause
Monthly donations have been an important part of nonprofit fundraising for decades and will continue to be in the future. Besides providing the peace of mind that comes with reliable revenue, recurring donors also tend to be much more likely to be retained year over year. Having a group of loyal supporters can bolster annual campaigns and sustain you through lean times. Whatever the size or mission of your nonprofit, a strong monthly giving program is a wise investment.Read Next: How Recurring Giving Creates Sustainable Revenue