Why are monthly recurring donations important?  

During the final quarter of the year, we’re encouraged to support many great causes championed by great nonprofits: In October we see pink everywhere we go, raising awareness of the fight against breast cancer. In November, programs supporting veterans are highlighted. Likewise, most nonprofits actively begin soliciting donations prior to Thanksgiving through December, in a final fundraising push before the year concludes.

But what about the other times of the year? While most giving happens at year-end, donors who consistently give throughout the year are actually preferred by most nonprofits, versus a frenetic (and often unpredictable) burst of activity at the end of the year.

Here Are 5 Reasons Why Recurring Donations Are Vital

Higher Overall Giving

Recurring donors give an average of 42% more per year than donors who give one-time donations. Furthermore, the lifetime revenue from recurring donors is estimated to be 600–800% higher than annual giving donors. When nonprofits focus on recurring donors, they end up increasing their overall bottom line dramatically.  

Greater Donor Retention

Not only do recurring donors give more each year, they tend to continue giving longer. Recurring donors giving via credit card or EFT usually stay active for up to 4 years. Conversely, 50-70% of a nonprofit’s first-time givers don’t give again. If a nonprofit is investing time and effort in acquiring donors, acquiring those who give monthly is a much better investment than acquiring one-time donors.

Increased Stability

Nearly a third of nonprofits raise between 26-50% of their annual funds from year-end campaigns. As such, the success – or failure – of those campaigns can have a significant impact on a nonprofit’s wellbeing going forward. Meanwhile, shifting to a recurring model results in more consistent and predictable cash flow and greater visibility, both of which help with planning, forecasting, and budgeting.

Less Risk

It takes more resources to find and secure new donors than to retain existing donors. Furthermore, you don’t need to solicit a recurring donor again – or at least not as often (but you do need to engage them; see below). When you consider the 50-70% churn rate of one-time donors versus the longer retention of recurring donors, nonprofits lower their operating costs – and their risk – by cultivating recurring donors.  

Improved Donor Experience

Nonprofits have many tools available for offering and managing recurring donations, many of which enable a donor to “set it and forget it” (services like G1VE do just that for businesses, automating their monthly giving to their favorite nonprofits). When donors give monthly, nonprofits can communicate with them regularly, without needing to solicit them each time. Informative, low-pressure communication to recurring donors can build loyalty, and even encourage them to increase their donation amount without resorting to a hard sell. Developing an ongoing, engaging relationship with recurring donors can pay dividends for nonprofits for many months to come.

Nonprofits who succeed with recurring donations can see higher revenues, lower costs, improved cash flow, and greater retention of engaged donors – all while freeing up time, energy, and resources to advance mission cause. Whether you’re a donor or a nonprofit, spend a moment at this year-end on how a recurring donation plan is the best plan, in the coming year and beyond.