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Recurring Donations: How to Set Up Recurring Donation Programs and Gain Monthly Revenue Streams for Your Nonprofit

Recurring Donations: How to Set Up Recurring Donation Programs and Gain Monthly Revenue Streams for Your Nonprofit

How would you like to know that your nonprofit will receive monthly donations from the same donors, offering consistent revenue streams for your programs? Nonprofits that foster these type of relationships with donors call these contributions recurring donations, and they can help form the financial backbone of a successful nonprofit organization or charity.

When you form a monthly giving program for your nonprofit, donors have the option of choosing to make regular, ongoing financial contributions to your nonprofit. These recurring donations are often smaller than the one-time financial gifts donors can make at your fundraising galas, making them more affordable for your donors. And if enough donors contribute using this option, your nonprofit will receive reliable long-term, sustainable support, allowing you to fund your programs and initiatives with confidence.

How can you take advantage of this fundraising option for your nonprofit? In this article, we'll explore all the benefits of recurring donations and how you can set up your own monthly giving program. We'll also examine the challenges that come with sustaining a monthly recurring giving program and how you can improve relationships with donors through monthly giving. To make sure your own program is successful, we'll also look at a few case studies of successful nonprofits with recurring gift programs and reveal how online fundraising platforms like PayBee can make setting up and sustaining a giving program much easier. 

Benefits of Giving a Monthly Donation to Nonprofits

Fundraising events allow you to raise money in a variety of different ways. In the past, we've looked at how you can receive large cash contributions from major companies through challenge gifts or matching gift programs. We've also looked at the benefits of hosting activities like fundraising concerts or carnivals that can engage the community while improving your revenue streams.

Donors who offer recurring donations offer their own unique set of benefits which should make developing relationships with these donors a high priority. These regular donations:

Provide a predictable revenue stream

If you've already hosted multiple fundraising galas, you know that the revenue raised through them can vary based on the current state of the economy, the success of your marketing campaigns, the time of year, and a host of other factors. While you can definitely raise a lot of money with the right event, there's no guarantee that your next event will produce the same results.

Having recurring donors helps make your revenue streams more predictable. As long as you maintain good relationships with your donors, you can more accurately estimate how much money you'll have to work with month after month -- and even expand these streams by securing more recurring donors in later fundraisers.

Enhance donor engagement and retention

Since donors who participate in monthly giving programs touch base with you regularly, that just gives you more incentive to foster closer relationships with them. Recurring donors are recognized in nonprofit newsletters, at charity dinners, and in videos detailing the impact of their monthly gifts. All this engages donors and provides them with incentive to keep contributing to your nonprofit.

Offer more cost-effectiveness and efficiency

While fundraising software like PayBee's can make fundraising more affordable by expanding your galas to include virtual and hybrid events, the fact remains that fundraisers cost money to host. If you only relied on receiving large, one-time financial gifts from your supporters, galas that don't attract these type of philanthropists might not be as cost-effective.

By contrast, when you offer donors a monthly giving program, you help secure more cost-effective and efficient aid for your nonprofit. Even if these donors don't attend all of your galas, they'll continue to contribute to your initiatives and help sustain your activities during financially challenging times. 

Obtaining Monthly Donations by Attracting Recurring Donors

To set up an effective program for recurring donations, you'll want to choose the right platform to collect donations. Fundraising platforms like Paybee make it easy to not only set up a recurring donation button option but also promote donation buttons everywhere on URL landing pages and via scannable QR codes. In just a few minutes, you'll be able to set up your ideal donation campaign and encourage your support network to donate monthly.

In order to create a successful monthly giving program, you'll need to create the right message for your campaigns. Make sure your campaign messaging informs donors where their regular contributions will be going. What nonprofit programs will they be funding? What benefit will they provide the local community? By providing this information, donors feel a sense of accomplishment in contributing and are more likely to donate monthly.

Making donors aware that you're now offering an option to donate monthly is important as well. Create or update the "How to Donate" page on your website where you detail the different ways supporters can contribute. Include a monthly giving option in all your donation appeals (like your emails, newsletters, and direct mail forms).

Above all, make monthly giving tangible! Instead of just suggesting giving $20 or $50 a month, communicate that $20 will feed 20 animals at your shelter or that $50 will buy necessary medical supplies for at-risk children.  

Challenges of Retaining Recurring Donors (And How to Keep Them)

Once you begin attracting donors willing to contribute to monthly giving programs (or convince your annual or one-time donors to give more regularly), the challenge becomes how to keep these donors in your recurring giving programs.

While it's a fairly simple matter to get donors to select automatic payment options when they first sign up for monthly giving, donor payment information can change. A donor might cancel a credit card, resulting in a declined payment. When this happens, send an email to the donor thanking them for their support, informing them of the problem, and asking them to update their financial information. You can also create a template for an end-of-year email thanking all your regular donors and requesting that they review their information to avoid payment issues. The sooner you inform a donor of payment issues, the more likely you can retain the donor.

Then there's the challenge of maintaining donor interest in your regular giving programs. To provide your supporters with more incentive, consider creating a reward program that offers a free gift (like event tickets) in exchange for regular support. You can also create and share campaign videos that show the impact each regular donation is making in the community. This instills supporters with a feeling of purpose, making it more likely that they'll continue contributing.

Of course, you'll also want to keep expanding your pool of supporters who give monthly. You can do this by integrating your monthly giving option with existing fundraising strategies. Display QR codes that lead to your monthly giving page and recognize regular contributors at appreciation lunches and dinners. You could also work with local businesses that match donations provided by their employees. Once these employees see their donations are being doubled by their companies, they'll be more likely to donate monthly.

Building Better Relationships with Donors

Beyond providing you with steadier financial support, creating a monthly donation option provides you with an opportunity to build stronger, long-term relationships with your donors. Make sure to thank your supporters for their recurring donations on a regular basis -- through private emails and public charity events. Knowing they're recognized and appreciated instills a feeling of pride in your supporters -- which is why many of them enjoy supporting nonprofits in the first place.

Personalize your communication. Instead of simply sending a form letter or email, address each supporter by name. Use information in your database to acknowledge how long this donor has been supporting your organization and what specific causes they enjoy backing. Offer update videos of programs they're most passionate about so they can see how their donations help make a difference. Share this information with your staff so they can spot these donors during in-person events and engage them in conversation.

Recognition can also take the form of tangible rewards and legacies. Supporters who offer recurring gifts could be gifted with nice items like vacation packages, event tickets, or plaques. A particularly generous provider who has been contributing for a long time might even appreciate having a program, room, or building named after them. There's really no end to the way you can show your appreciation -- just be willing to spend some time and creativity on ways you can improve relationships with donors.

Case Studies

Want to find inspiration for great ways to ask for recurring donations? Check out the following websites:

One Tail at a Time

One Tail at a Time (OTAT) is a Chicago animal rescue that supports under-resourced animal shelters and helps place pets with good owners.

The top of its website displays a chance to "be a monthly hero" with a button inviting visitors to join today. Below, visitors see the impact OTAT has made through the number of pets rescued. The site is full of photos of rescued animals and visitors are invited to share their adoption love story, forming an immediate emotional connection with the nonprofit.

On its OTAT Membership page, visitors are provided with suggested regular donations next to the impact they make (i.e. "$25/Month - Sponsors a Foster Pet's VET EXAM Each Month). Members who opt to give $100/month can select a specific OTAT program to support, branded OTAT merchandise, and the right to name a rescue dog, providing them with greater incentive to give higher amounts.

Innocence Project

Innocence Project is a nonprofit legal organization that works to exonerate people who have been wrongfully convicted and reform the criminal justice system. Its website has a "Donate Monthly" option with the memorable headline, "Help free the innocent every month," which communicates the nonprofit's purpose and provides incentive for regular giving.

On the monthly giving page, visitors can also find testimonials from current monthly donors who share why they give regularly. The web page itself explains that monthly support helps sustain their efforts to represent innocent clients for an average of 7 years and supports rapid responses.

Suggested donations range from $10 to $30/month, emphasizing a strength of recurring contributions -- since they tend to be on the small side, they're easier for supporters to afford.  

FAQs

What is the value of recurring donations?

Securing supporters willing to provide a regular donation every month provides your nonprofit with steady income streams for your organization. Likewise, you'll be able to build stronger relationships with these monthly donors who can help support your organization over the long-term. 

How do you acknowledge recurring donations?

Sending thank you letters and/or emails acknowledges your regular supporters and provides them with incentive to keep funding your programs. Build a template that can be modified to include details of their donation, their impact on the community, and any rewards you're offering for their continued support.

Is it better to donate monthly or one-time?

While one-time donations tend to be larger than the amount given each month by a regular contributor, over time, these recurring donors give much more to your nonprofit. Because monthly gifts tend to be smaller, they're more sustainable for supporters.  

What is the difference between a pledge and a recurring donation?

A pledge is a promise made by a supporter to make a donation to a nonprofit or charity in the future. This type of donation can be made in installments or all at once, but generally come with an end date. Some people pledge to give cash, others pledge to give items (like computer equipment). 

By contrast, recurring donations are made with no end date in mind (although the supporter can choose to end their recurring donations). Such gifts are also paid in cash. 

Moving Forward: Promoting Recurring Giving

Offering your supporters a monthly giving option is an excellent fundraising strategy to not only bring some additional financial stability to your nonprofit but also improve donor loyalty and donor retention. By using donation software that can collect relatively small amounts of money from supporters each month, donating can become more affordable for your supporters while increasing your overall charitable contributions.

In order to build effective fundraising campaigns with recurring gift options, you'll want to choose a user-friendly software that makes the process simple for both you and your staff. PayBee's system provides fundraising tools that offer automated billing and simple payment processing options that make collecting recurring donations easy. You'll be able to customize donation buttons to offer monthly donating options and promote them on both your website and social media posts, attracting more supporters.   

In addition, PayBee offers donation tracking technology so you can trace all your sources of recurring revenue and other charitable contributions. You can also use your donor database to locate other supporters who would be interested in giving monthly, improving donor acquisition.

Ready to learn more? Sign up for a free demo of PayBee's fundraising platform. You'll get an up-close-and-personal look at our user-friendly system and be able to experience one of our mock live auctions (proven to attract plenty of guests to your galas) first hand. You'll also be able to chat with our experts and learn how the PayBee system can add new donation options to your existing website and improve your marketing campaigns. There's no better way of learning if our donation software is right for you, so sign up for a free demo today!

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Michael Jung

Michael-Jung

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