TL;DR: recurring donor programs are the future and can pay off massively for you
Building that Well of Support
Last time we talked about striking while the iron is hot—feeding that first donation with enough engagement that they ignite into long-time supporters. Those fundamentals form the basis of all philanthropic engagement, but there's a new strategy emerging that's less...volatile.
Enter recurring donation programs
The Case for Sustained Support
As a nonprofit, you know that rarely is your work cut and dry, over and done with. To achieve meaningful, long-term change, your organization needs to first sustain its current work and impact, and if possible, scale it to achieve more. Very rarely are problems one-and-done (and there are projects that fit this bill!)—they require sustained investment (whether money or human resources) in program areas over time.
If you're nodding in agreement to this, then you're recognizing that one of the biggest components of a successful nonprofit to sustain and scale its program work within its community, and that's where most of the expenses go to. However, if that's the case, then why not have a revenue model that also matches that sustained expense model?
If your impact requires your nonprofit to continuously have regular, recurring expenses throughout the year for your program work, then that should be reflected in your financial support to best match expectations. Regular, recurring financial support have the following benefits:
Predictability for Future Revenue
- Less Donor Fatigue
- (Usually) Higher Donor Lifetime Value
- Emphasis on Value for Donor Experience
- Better Messaging / Clarity of Purpose
What Do the Numbers Say?
Across the nonprofit sector, the Fundraising Effectiveness Project in 2015 (jointly sponsored by the AFP) found that the average donor retention rate was 45%. Looking at first-time donor retention rate vs. repeat donor retention rate, that average turns into 19% for first-time donors, 63% (!) for repeat donors.
Repeat donors are far more likely to come back year after year and give your non-profit the financial support it needs on a sustainable basis.
What's changed recently to really allow recurring donation programs to take off? Answer: online giving. Think about what it used to look like from a donor perspective to commit to a regular, recurring donor. They have to remember to get their checkbook out, maybe after getting an annual appeal letter from your organization, physically put pen to paper to write out that check, stuff it in an envelope, get a stamp, and drop it off to be mailed out. Rinse and repeat on a yearly basis, or even monthly.
What Can We Learn from Netflix?
While some people might be used to that routine and even look forward to it, the rest of the world has been moving on. Amazon now has one-click purchasing online, meaning from the moment you get an email from them, to purchase can be a matter of seconds. Regular subscription services that charge a credit card monthly are becoming the new norm with companies like Spotify and Netflix leading the charge. It's becoming increasingly easy to commit and give on a regular basis.
Okay, You've Convinced Me
Hopefully, we're not beating a dead horse here. One of the toughest parts in development is that all ideas are great ideas, but there's only one (or not that many) of you. How do you balance all of these great ideas, from planned giving to stewardship to donor acquisition to now this new recurring donor program?
It's for that reason exactly that a recurring donor program should be first on that list to implement. And that's because it's low overhead. You don't have to constantly chase after donors to donate again; you don't have to constantly worry about your fundraising projections; you don't have to feel like you're on that hamster wheel going around and around asking the same people for the same amount of money every time.
With an effective recurring donor program, you can set it and let it go. It doesn't require that constant upkeep and maintenance a more traditional fundraising campaign does, like a gala fundraiser or a capital campaign. Once its in place, you can even devote more of your time to those fundraising campaigns, and you know your bases are covered.
How Do I Make It Happen?
Last time, we used an analogy of a first-time donation being that spark that, if fed right, could ignite a donor. That analogy's great for high-touch, high-involvement, and (usually) one-time donations. But when you're asking someone to commit to a long-term relationship with you, we prefer that the work be akin to building a well where supporters can consistently draw water from.
Unlike a fire where you have to provide it with kindling when it needs it, people who draw from a well go at their own pace. Some may visit the well once a week, others once a month. Someone may need enough water for their entire family each time they visit, and someone else may just be stopping by for a quick drink. The difference here is that people come to you, not the other way around with a traditional fundraising campaign.
That means for a successful recurring donor program to take place, all you need to focus on are:
- Letting people know that a well exists, and that it caters to people where they're at
- Making sure the well is replenished and full with rich engagement content
Let's talk about the second point—what's exactly in this well that people are drawing from?
What's In the Well
Fulfillment. When people draw from the well, they're looking for the fulfillment that your nonprofit provides. Concretely, that's in the form of engagement, from email stories about program impact, to events where they can see the work first-hand, to volunteer appreciation nights highlighting community support. It's value your nonprofit creates, and your donors (and supporters!) crave it to re-affirm that they made the right choice supporting you. Since your nonprofit is constantly doing great work in the community, that work can be turned into content which people can draw from on a regular basis to become fulfilled.
As promised, we won't leave you high and dry with these lofty ideals without going over some concrete things you can start implementing today.
The first, most basic option you can do is see if your current donation pages even offer the option to give on a regular basis. The second is to tweak your messaging accordingly—because you're asking people to commit to something different, more long-term, the same message that inspires someone to donate right now might not be as appropriate to inspire someone to commit long-term.
If you've never had a recurring donor program before, then reach out to your donors that already support you on a regular basis. Take your most loyal donors (and not necessarily your top donors, or even major donors) that come back year after year, and see why they continue to support you. The same reasons on why they commit on a regular basis to your organization can be packaged into a campaign to bring others into the same giving pattern.
If you do have a recurring donor program, make it a part of your strategy to get everyone on that giving pattern. Stress the importance of a formal, sustained commitment to your non-profit to sustain its work. That means the workflow should be to get people in the door as a donor, and then try to move them to commit to becoming a regular, recurring donor as soon as possible.
Stay tuned as we wrap it all up in Part 4!
CEO and likes to build buckets for the well