What Is Recurring Giving?
Recurring giving can completely evolve how your supporters contribute to your nonprofit. Instead of making a single donation when moved by an appeal or campaign, donors commit to regular, automatic contributions that continue until they actively choose to stop.
The concept might seem simple, but its impact on your nonprofit’s finances can be massive. According to nonprofit analytics software Kindful, recurring donors give five times more than one-time donors. Even more impressive, these committed supporters continue giving for about two years on average. With recurring giving, you can create a community of contributors who’ve made a conscious decision to show up for your mission consistently.
The Rise of Subscription Culture
Netflix, Spotify, Blue Apron, Dollar Shave Club — these are all companies that changed the game with subscription culture. There’s now a subscription option for everything from food to dog toys, which has changed how people think about payments.
The younger generations feel comfortable with subscription models. The subscription economy has familiarized your potential supporters with seamless, automated experiences that minimize the need for repetitive decision-making.
This cultural shift is an incredible opportunity for nonprofits. Organizations like Boston Marathon and Millennial Choirs and Orchestras have chosen Chargent as their recurring giving solution and enjoy retention rates of 90% compared to the average of 46%. That’s because most of your donors have grown used to recurring payments and actively embrace them. In fact, 51% of donors are already enrolled in a recurring giving program, which shows that this approach has become mainstream even among charities. By embracing recurring giving, you extend a familiar payment model to your donor base.
How Recurring Giving Works
Setting up a recurring donation system requires minimal technology, especially with Salesforce. A recurring giving app can help you make continuous support frictionless by securely storing payment information to make recurring payments.
Here’s how the process works:
- Donor signup: A supporter visits your donation page and selects the recurring option instead of a one-time gift. They then choose their preferred frequency and amount.
- Payment authorization: The donor enters their payment information once and authorizes regular charges to their credit card or bank account.
- Automated processing: Your payment system, such as Chargent in Salesforce, automatically processes these donations on the scheduled dates without any action from the donor or your staff.
- Receipt and acknowledgment: Your system automatically sends confirmation receipts and a thank-you message after each transaction. This keeps everything transparent and helps maintain the relationship with the donor without having to intervene manually.
- Continuous management: Your CRM tracks the recurring donation status of each donor and lets you see any failed payments.
If that sounds complicated to set up, it doesn’t have to be. Chargent lets you set up your recurring donation offering in just a matter of clicks, without having to involve an expensive software developer or financial advisor.
Why Adopt Recurring Giving?
Younger generations gravitate towards seamless, automated giving. Millennials and Gen Z grew up in a digital environment where subscription services were already the norm. They value convenience and automation in all endeavors, including their financial transactions.
This is important for nonprofit fundraising, as younger generations are more willing to put their money where their mouth is. US Bank found that over three-quarters of Gen Z are willing to invest in causes that align with their morals and values. This means that getting their support from a young age can turn them into massive contributors.
Plus, while they might not be as wealthy as older generations, they are willing to commit a little bit month by month. Older generations may be in a better financial position to make a large one-time donation, but those newly in the labor market may not. That’s why offering subscription payments can help you capture an even larger donor base.
And there’s no need to worry about payment security. Recurring giving platforms like Chargent offer bank-grade security for transactions while supporting multiple payment methods like credit cards, ACH transfers, and digital wallets. Organizations can create tiered membership levels within their programs to match different donor capacities and provide appropriate benefits. depending on how much they’re willing to contribute per month.
Benefits of Recurring Giving
Successfully setting up recurring donations for nonprofits comes with many benefits that extend way beyond convenience. From financial stability to improved donor relationships, these are some of the ways recurring donations strengthen nonprofit sustainability.
Increased Donor Retention
Donor retention is one of the most challenging sides of fundraising for nonprofits. It takes two to three times as much money to acquire a new donor than the value of their first donation. Because of that initial investment in obtaining the donor, most donor relationships take up to 18 months to become profitable.
Recurring donations have a lower barrier to entry that helps attract more donors. Rather than making a one-time payment of $100, donors can commit to just $5 a month — the price of a cup of coffee. Although this sounds low at first, data shows that recurring donors dramatically outperform one-time contributors. The average lifetime value of a recurring donor is 440% higher than that of a one-time donor, which shows that it really cannot be overstated how important recurring donations are.
Better Forecasting
Traditional fundraising models based on one-time gifts or pledge systems create considerable forecasting challenges. Money pledged but never received can seriously disrupt budgeting and program planning. In contrast, recurring donation systems create predictable revenue streams. With recurring donations, you can:
- Project revenue more accurately across fiscal quarters
- Make informed decisions about program expansions or new initiatives
- Reduce financial uncertainty during seasonal fluctuations
- Plan strategically rather than reacting to immediate financial pressures
Improved Donor Experience
Mailing a check or having to log into a platform just to make a donation are outdated. Automated recurring payments align perfectly with new preferences that value convenience. The subscription model feels familiar to most supporters who already have subscriptions for other parts of their lives.
Plus, recurring giving changes how you communicate with your clients. Instead of repeatedly asking for contributions, you can focus on communications on mission impact and program success. Donors appreciate these engagement-focused updates rather than constant appeals for funds.
Take Your Nonprofit Fundraising to the Next Level
Subscription culture has fundamentally changed how people engage with organizations. Nonprofits embracing this shift through recurring donation platforms like Salesforce with Chargent position themselves for sustainable growth and deeper donor relationships. Start your free trial today to see how integrating a recurring donation platform into your fundraising strategy can be revolutionary.
