Generate Ongoing Revenue Through Recurring Giving

A well-executed recurring giving program can generate consistent, ongoing revenue for your mission. 

Brooklyn Defender Services, a LAPA Fundraising client, recently closed its 2021 annual fund campaign with nearly 6,000 new donors — and recently established a monthly giving program as part of the effort to boost its annual fund. By identifying annual fund donors who are willing to support the organization through automated monthly contributions, Brooklyn Defender Services now has a steady stream of recurring revenue in 2022 from these newly acquired supporters. 

Your organization can follow a similar path by creating data-driven, personalized campaigns for new and existing donors. Even better, if you set up your program properly, it requires minimal administrative work to keep it running smoothly. 

With recurring giving, you can also service, upgrade, and retain existing recurring donors across different marketing channels. 

Who Should Consider a Recurring Giving Program? 

If you rely on annual donors for a portion of your annual fundraising revenue, you likely have an opportunity to inspire a portion of those donors to make recurring gifts.

To identify which donors are most worth approaching, focus on existing donors who give under $500 annually.

Your recurring donors are most likely people who:

• Have donated several times before. 

• Have donated in the last year. 

• Usually donate small amounts, rather than large amounts, rather than large amounts that are likely to be one-offs. 

However, not every nonprofit is a good fit for recurring giving. 

For example, if your organization receives the lion’s share of its revenue through major gifts or private foundation grants, you may not have the staff — or the donor pipeline — to be well positioned for recurring gifts.

In such cases, it may not make strategic sense to divert resources away from cultivating major gift prospects or grant writing to pursue a recurring-gift program.

Although it makes sense for many nonprofits to have diversified funding streams, doing so is not always the holy grail we make it out to be. For some nonprofits — especially those that are growing quickly — a single source of revenue is the best funding path.

Starting Your Program 

Most donor database accounts include a recurring-donations feature, which makes the setup process simple for both your fundraising team and your donors.

When you manage your recurring gifts through your donor database account, your donors don’t have to be directed to a third-party site they may not know or trust.

For your organization’s administrators, it means you can track your donations data in the finance module, and you can make changes for donors with just a few clicks.

Once you set up your database to process recurring donations, you can start promoting this feature to your annual donors through email. You can also market it as an option for prospective donors through your website and through acquisition campaigns.

Since some donors prefer to give at different intervals — monthly, every other month, quarterly, or even twice a year — it’s important not to shoehorn your donors into a monthly model; provide options for bimonthly, quarterly, or other frequencies.

The Power of Naming 

Technology makes it easy to set up a recurring program, but your ultimate success will be determined by how you market your offering — and how you steward donors once they opt in.

We recommend that you choose a powerful name for your program to give it credibility, making it something more than just permission to charge the donors’ credit cards once a month. You want to show donors that they can expect a seamless experience with the highest level of stewardship and donor service.

A well-crafted name also creates a feeling of belonging and community that donors can feel proud to be a part of. Instead of marketing a transaction, you’re asking the donor to join a community.

It also allows your organization to recognize and acknowledge your monthly donors in a meaningful way through donor lists and other stewardship pieces.

Avoid generic names like “circle” or “society” — these are often more suited for major giving programs.

Instead, think about your organization’s mission and your beneficiaries. Can you build into the name what your organization does? If your nonprofit helps build schools in developing countries, for example, why not incorporate the word “builders” into your monthly giving program name? Or take inspiration from Charity: water, whose monthly giving program is fittingly called “the Spring.”

Survey and Steward Your Recurring Donors 

Once your program is off the ground, ask your recurring donors how you’re doing.

One of the best ways to evaluate the success of your recurring-giving program is through a simple annual survey. Here are questions you can use:

• Why did you choose to give to this organization, and what keeps you giving monthly? 

• Do you feel needed and appreciated by our nonprofit? 

• Are you happy with the level of stewardship and recognition we’re providing? Would you like us to do something differently? 

• What do you enjoy about the program? 

• Do you want to set a time to talk about your involvement with us or to share your impressions? 

Engage Your Lapsed Donors Too 

You can further refine your program by making sure you’re asking your lapsed recurring donors why they left.

Very few monthly donors stay active donors for life, so you’ll inevitably face some cancellations.

Donors stop giving for a variety of reasons, but it’s important for you to know what those reasons are. Did someone leave because they didn’t feel that your organization needs the funds? Were they unhappy with how you’re spending the money?

You can learn more about how to engage your lapsed donors during a February 16 LAPA webinar. Register now!

A Final Note: Credit Card Expiration Dates 

One of the biggest reasons why monthly donors lapse is because their credit cards expire and they never get around to giving you the new information.

To avoid this, keep accurate records of which credit cards are expiring soon, and reach out to these donors beforehand.

If you don’t hear back, follow up via phone, email, postal mail, or some combination. When you reach out, make it as easy as possible for donors to give you the new information — if it feels like a chore, they’ll be more likely to put it off and forget about it.

Remember that asking for new credit card information is almost like asking them to sign up for monthly donations all over again, so make sure to be polite, avoid being too pushy, and show lots of appreciation for their past and future support.