Recurring giving is an essential component of any successful fundraising strategy for nonprofits given the predictable revenue stream it provides. In the wake of the COVID-19 pandemic, it’s never been more important.
That predictable stream of revenue can power your nonprofit through uncertain and unforeseen circumstances, as well as set you up for scale. In fact, many nonprofits are starting to see other fundraising efforts like crowdfunding and peer-to-peer as tools to first attract donors and then steward them into becoming recurring donors. In The State of Modern Philanthropy 2018, we found that recurring donors are over five times more valuable to your nonprofit than one-time donors.
With The State of Modern Philanthropy 2019, we saw that of all one-time donors who returned to start a recurring gift subscription, 25% proceeded to make another one-time gift. In The State of Modern Philanthropy 2020, we explored the second actions taken by recurring donors:
- 11% made a contribution to a crowdfunding campaign
- 16% purchased an event ticket
- 14% signed up to fundraise or donated to a registration with fundraising campaign
- 10% participated in a peer-to-peer campaign
Further, we found that, for organizations who raise over $50 million in total revenue, 26% of their online revenue through Classy came from recurring gifts.
Given the overwhelming value of recurring donors, you need to pay close attention to when they might be at risk of churning.
If you’re able to see these red flags early, you can take decisive action to intercept and re-engage your recurring donors before they move on. Below, we’ll walk you through some strategies that can help identify the risk and retain their support.
Risk Indicator 1: Email Engagement
Keep a close eye on your email marketing metrics, specifically messages that are being sent to your recurring donors. If you notice that a recurring donor stops opening or clicking through on your emails, this dip in engagement could precede a cancelation of their monthly commitment.
Consider reaching out to these recurring donors personally, with a phone call or handwritten note, and thank them for their ongoing commitment.
Risk Indicator 2: Credit Cards
Take action before your recurring donors’ credit cards expire. Pull a report to analyze the credit card data for your recurring donors, identify which ones are nearing expiration dates, and prompt them to update their subscription with a new credit card.
Additionally, you can encourage your recurring donors to sign up through ACH payments, which are only available through Classy Pay. This way, you don’t have to worry about credit card declines or expirations and can almost fully mitigate this risk indicator. Plus, recurring donors who give through ACH are retained for 20% longer.
Risk Indicator 3: Willful Downgrades
Recurring donors who have been giving monthly at a certain amount, but then willfully decrease their monthly commitment, pose a churn risk. This is a supporter literally telling you they want to give less.
The key here isn’t to berate them for doing so. After all, we may not have a full understanding of someone’s financial situation. Instead, show the link between their gift and the impact it makes. For example, you can create an ongoing series that showcases the beneficiaries they’ve helped, which gets sent to them each month or quarter.
Risk Indicator 4: Giving History
A recurring donor’s giving history can say a lot about their future plans to support your nonprofit. Analyze your pool of recurring donors and ask questions like:
- Did they donate before their first recurring gift?
- Have they ever increased their monthly commitment?
- Do they buy tickets to our events?
- How often have they fundraised, or donated to someone’s personal fundraising page?
If you end up with a pool of recurring donors who have only made the monthly commitment with no prior donations, follow-up actions, or upgrades, they might pose a churn risk. Make a concentrated effort to engage them with messages about your programs, impact, and work to fulfill your mission in order to deepen their relationship with your organization.
Strategize to Proactively Reduce Recurring Donor Churn
Identifying churn risk is moot if you don’t have strategies set in place to engage your recurring donors. Whether you’re sending them proactive emails, making personalized phone calls, or offering new ways to get involved, you must act to get in ahead of the curve to retain their support.
1. Proactively Offer Ways to Deepen Commitment
The best defense is a good offense. Be proactive and avoid a situation altogether where someone might churn. Keep open lines of communication with your recurring donors and reach out to them often with tailored messaging.
Send them news about your nonprofit, stories of your beneficiaries, and impact reports, and offer opportunities to get involved beyond their monthly commitment. This could be an ask to donate an additional one-time gift, upgrade their current amount, fundraise on your behalf, or even spread your message across social media.
2. Ask Their Opinion
In order to balance your communications so that you’re not always making an ask, consider asking for something in return aside from a donation: their opinion.
This creates moments where someone can share their experience with your nonprofit and engage in a two-way dialogue with you. It can deepen the relationship between you and your recurring donors, make them feel heard, and give them a reason to keep engaging with your organization.
You might consider sending an annual survey, or make an annual phone call, that asks what they’re feeling about their impact, your programs, or things they’d like to see happen. Further, if someone does churn, you can reach out and ask why they left and what you could have done to retain their support.
Either way, you’re getting crucial information that can strengthen your nonprofit right now, and help mitigate churn risk for other recurring donors in the future.
3. Push a Downgrade Over Cancelation
If you get to the point where someone does, in fact, wish to cancel, suggest they downgrade their amount instead of canceling outright. You can say something to the effect of:
“Even if you stay on as a $5 a month donor you can still make a major impact to our programs.”
Should they still wish to cancel, consider adding them to an email segment that you can follow up with about interesting news about your nonprofit. You may want to ask them to ensure you’re aligned with GDPR sensitivities. Keep them in the game any way you can, and they may end up re-committing some day in the future.
Don’t Set and Forget Your Recurring Donors
Recurring giving has never been more important, but it’s not enough to simply “set and forget” your recurring donors once they’ve committed. You have to work to retain their support, encourage them to upgrade their gift, and make them feel like a true part of your nonprofit.
These are donors who raise their hand and signal that they’re willing to support you long-term. They deserve the extra love and attention, and it can literally pay off for you over time.