Nonprofit organizations work on donations and they have the difficult task of coming up with ways to stretch every dollar for having the biggest impact on those they help. Therefore, savvy nonprofit organizations have begun to offer donors the option of setting up monthly recurring donations. If a nonprofit organization is not giving its donors the opportunity of signing up for a monthly program, they are missing out on the chance of receiving more money over an extended time period. Statistics show that on average, a donor who opts for recurring donations will give 42 percent more every year as compared to a donor who gives a one-time gift.
Moreover, it is not just about the money. There are numerous other benefits that both nonprofits and donors can reap through recurring donations, not the least of which is a predictable and regular income for your organization. Listed below are some of the notable ways how recurring donations can help nonprofits:
Boost overall revenue
As mentioned earlier, recurring donors are likely to give 42 percent more money than those who make one-time donations. Even if they donate a little bit, it can add up in the long run. While donors are often hesitant of making a big one-time donation, they are more comfortable with making small monthly donations. These smaller monthly payments can actually add up to a larger sum annually than a one-time gift they didn’t feel comfortable in giving. Thus, it is a win-win situation.
Increase donor retention
Almost 70 percent of donors that are recruited to nonprofits never come back for making another donation. On the other hand, organizations that allow people to sign up for recurring donations have a first-year retention rate of 80 percent. The convenience that recurring donations can offer is an important aspect of donor retention. This is mostly because they don’t have to sign up again and again every time they wish to donate as the amount is automatically paid from their accounts.
Reduce operating costs
It takes a lot more resources and expenditures to recruit new donors as opposed to engaging with existing donors. As mentioned above, providing donors with the option of making recurring donations can help retain them. Increased donor retention can lead to lower operating costs. When there is a monthly program in place, nonprofits can reduce the effort and pressure associated with regularly soliciting reliable and sustaining donors. This results in reduced administrative, marketing and even postage costs. Recurring donations are especially beneficial for smaller nonprofit organizations that have limited resources.
Build better relationships
When you have recurring donors, communication is less intense on solicitation more focused on providing feedback on how their gifts are being used. This helps donors in feeling good and they don’t feel constantly pressured to invest more. Therefore, it doesn’t come as a surprise that donors making monthly donations eventually become more committed that those who make one-time contributions.
Hence, recurring donations can go a long way in helping nonprofit organizations in achieving their goals.