Recurring-gift programs gained traction among U.S. charities after the economic crisis of 2008 and have continued to grow in popularity. Donors who participate in these programs commit to giving a fixed amount to a charity, usually once a month.
In a survey of 135 nonprofits, marketing firm M+R found that 16 percent of all online fundraising revenue came from monthly donations in 2018 — a 3 percent increase over 2017.
Donation forms should include language or visual elements to explain the difference a recurring gift can make.
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Recurring-gift programs gained traction among U.S. charities after the economic crisis of 2008 and have continued to grow in popularity. Donors who participate in these programs commit to giving a fixed amount to a charity, usually once a month.
In a survey of 135 nonprofits, marketing firm M+R found that 16 percent of all online fundraising revenue came from monthly donations in 2018 — a 3 percent increase over 2017.
Donation forms should include language or visual elements to explain the difference a recurring gift can make.
Many of the monthly giving programs that launched during and immediately following the recession are now mature and healthy, says Becky Chinn, principal at LKA Fundraising & Communications.
And although fears of an impending recession have subsided somewhat lately, recent economic anxiety has made for a tough fundraising environment. Last year’s “Giving USA” report, for example, found that donations to charity fell 1.7 percent in 2018.
“We’re not really in a boom time for donations, so having that strong sustainer program really makes a difference,” Chinn says. On average, recurring donors tend to give more than those who make a one-time contribution, she notes.
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While the promise of loyal donors and bigger gifts makes recurring contributions appealing to many charities, fundraisers should expect to tighten their belts during the program’s first two years, Chinn cautions.
Shifting the fundraising focus from immediate gifts to recurring donations can make for smaller monthly fundraising gains during the transition, even though retention and overall revenue may increase in the long run.
“Once organizations allow themselves to really go full force into a program and get over that hump, then their revenue starts taking off and their donor numbers start to stabilize or even grow,” Chinn says.
Those lean early months should be anticipated, but they shouldn’t deter organizations from committing to a monthly giving program, according to Chinn. Here are some tips from experts to start or expand a monthly giving program.
Strategies for Beginners
Pick a slow time of year to start a new monthly giving program. Fundraising downtimes — like those following the ends of the calendar and fiscal years — are the best times to begin a monthly giving program, says Sean Wagman, senior marketing account manager at the digital marketing firm Beaconfire RED. But charities should bear in mind that these programs take time to gain traction.
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“You’re not always going to see the best results the first time, and you need to test and you need to iterate based off of what you’re seeing to get to that control where it’s almost like a set-it-and-forget-it campaign,” Wagman says.
Charities should test what language and offers best encourage donors to sign up to give monthly. These tests can help determine whether to offer monthly donors a generic gift, like a water bottle, or a gift that’s more specific to the nonprofit, such as a print given to those who support an arts charity. Donors may not want any gift at all, but Wagman says testing different offers will help you determine this.
Incorporate monthly giving into everything you do. Smaller charities should focus on adding recurring gifts to fundraising appeals they already plan to send out instead of using the strategy to replace a longstanding tactic such as direct mail or email newsletters, says Chinn. Mention the option of monthly giving in all communications, she says. Those mentions can be as simple as including a quote from a donor in a newsletter or preselecting a monthly gift on the website’s donation form.
Update all donation forms to include the option to give on a monthly basis. Even if your charity doesn’t have money to invest in marketing, Wagman says, this simple change can make a big difference — especially when it comes to your organization’s online presence. Donation forms should include language or visual elements to explain the difference a recurring gift can make.
Testing online donation forms with free analytics tools like Google Optimize can help you find a design that resonates with your audience, he says.
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A Revenue Boost
Encourage giving straight from bank accounts. Just 33 percent of charities allow donors to give monthly through their bank accounts, according to a 2018 study by NextAfter. Groups of all sizes should encourage donors to give directly from their bank accounts, rather than through credit cards because expiring credit cards can be time-consuming to update.
For charities that can afford to send mailings, Chinn recommends sending a direct-mail campaign that asks recurring donors to convert from credit cards to electronic funds transfer withdrawals.
“Please make the switch today!” one mailing she developed for Oregon Public Broadcasting encourages. “The process is easy, and you’ll never need to worry about updating credit-card numbers again, while you assure a strong and stable future for OPB and the programs you love and support.”
The donation form also gives supporters the option to increase their monthly gift when they make the change.
Chinn also suggests including a deadline for donors to make the switch. What’s more, she says donors often feel more comfortable providing their bank-account information through the mail than online.
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Don’t let donors with expired cards slip away. One survey found that 47 percent of nonprofits do not make the effort to retain monthly donors whose credit cards have expired.
If you don’t have staff available, Chinn suggests asking volunteers to call those donors and request that they renew their recurring gift through an electronic funds transfer from their bank account.
Strategies for Advanced Groups
Pay people to represent your charity on city streets or door-to-door. Although this method is expensive, it is often worth it, Chinn says. Some big-budget nonprofits are going beyond engaging pedestrians on street corners and are establishing kiosks in malls or other areas with lots of foot traffic, says Naseem Saloojee, chief executive of Globalfaces Direct, which runs street-canvassing campaigns for nonprofits. These retail spaces typically have ground rules for how canvassers can approach shoppers, so Saloojee says canvassers working in a kiosk depend on prospective donors making the first move, rather than responding to their pitch.
“The person actually has to come up to the booth,” he says. “Because it’s a less aggressive channel in that manner, it can [lead to] a better donor retention.”
Invest in professional telemarketers. Donors respond well to over-the-phone appeals, Chinn says, but she recommends using professionals, not volunteers. Telemarketing is a “learned skill,” she says, and typically only seasoned professionals have mastered the tactics needed to keep a potential donor on the phone and tailor a pitch to that person’s interests.
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“Volunteers are sometimes nervous about asking for money, so it rarely works out,” she adds.