The end of the year is tough for nonprofits. There’s a push for end-of-year giving, new budgets, and donor management. The option of a recurring donation gives donors the ability to give more in smaller amounts and nonprofits the luxury of regular income.
Have you considered adding recurring donations to create stability in your donation amounts?
Budgeting. It’s tough.
Year over year and sometimes even month over month, it’s hard to determine what your budget should be. Projections are helpful, unless they’re inflated.
“Budget for income first. Base income targets on realistic expectations and only include reliable income in the budget. Never include an income projection that simply fills the gap to cover expenses. This sets the organization up for a budget deficit if the organization fails to hit the ‘plugged’ income targets.” Elizabeth Hamilton Foley
Once your nonprofit has staff and expenses such as website costs, rent, and utilities, accurate budgeting is key. It logically follows that all of your budgeting is dependent upon income. This is why adding recurring donations to your fundraising mechanism is an important factor in your budget process.
“One common misconception is that budgets have to balance the expenses and revenues. Rather than an expectation, developing a break-even budget should be an exception. Instead, nonprofits should budget for a surplus.” Lincoln Arneal, Nonprofit Hub
What is a recurring donation?
In its most base form, a recurring donation is a subscription. Recurring donations can also be referred to as sustained giving.
“As the name suggests, sustained giving is designed to ‘sustain’ your mission over time, ensuring that your nonprofit has predictable cash flows that are less susceptible to economic fluctuations.” Sally Heaven, np Engage
The subscription model allows your donor to decide to give you money throughout the year without having to go to your donation form online and give again. So, they subscribe to a dollar amount. As a budgetary element, you can now count on $20 a month for the next twelve months from that donor.
“Donors enrolled in a monthly giving program are retained 70 to 80 percent of the time. So, it’s easy to see why recurring giving is critical to your fundraising success.” Sally Heaven, np Engage
Recurring Donors Give More
If you remember some of the stats from our post about why every nonprofit needs to accept recurring donations, you may be aware of this quotable from Network for Good.
“The average recurring donor gives 42% more than one-time donors.” Caryn Stein, Vice President, Communications and Content, Network for Good
Forty-Two Percent. Most for-profit businesses would die to get that kind of boost to their projected revenue.
Not only that, but recurring donors give more over their lifetime. Our friends over at Classy have a great example in a hypothetical case study of Paul, who gives $25 twice a year and thinks $100 is out of his budget. His lifetime value actually ends up being $2,810 — starting with $10 a month.
“By recruiting and retaining Paul as a monthly donor, his annual contribution grew steadily for 10 years. And if The Big Dreams Association continues to engage him, they will have reliable support for years to come.” Alison Gauss, Classy
So why don’t nonprofits take advantage? It comes down to the fact that many nonprofits feel bad about asking. We get it. It is hard to ask. But the truth is that your donors believe in your mission and cause but get distracted with their own lives. This is why adding recurring donations is the perfect solution.
Yes, Give Offers a Recurring Donation Add-on
We’d be remiss to not mention that we do offer Recurring Donations in our Plus and Pro Bundles.
There really is no risk. Install Give today for free on your WordPress website. Then purchase a Pricing Plan. It makes your donors happy, your fundraising easier, and your accountant will be pleased.
Learn More about Recurring Donations:
As part of of Give LIVE! Series, Matt Cromwell recently hosted a webinar that thoroughly reviews recurring donations with great examples. Subscribe to our YouTube Channel to be notified the next time we go live.
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