Recurring Donations 101: A Guide for Nonprofits

What role do recurring donations play in your nonprofit’s fundraising strategy? And how does their impact compare to those of one-time donations and gifts from major donors? If the answers to these questions are, respectively, “not much” and “a distant third,” it’s time for a strategic realignment. 

Why? Because building a base of recurring donations should be your number one priority! In this 101 guide for nonprofits, we’ll cover why that is, how to set them up, and best practices you can follow to launch and maintain a recurring giving program. 

For an enhanced learning experience, click the ‘Play’ button on the video above to hear from recurring giving expert Erica Waasdorp while you read!

What Are Recurring Donations?

Recurring donations are a commitment by a donor to regularly contribute a predetermined amount to a nonprofit organization. These gifts are typically made on a monthly, quarterly, or annual basis. 

Unlike a pledge—where a donor promises to make a gift later but not in the present—a recurring donation means funds are donated right now and then again at regular intervals. 

The Benefits of Recurring Donations for Nonprofits

Don’t get us wrong: One-time donations and major gifts should both play big roles in your organization’s fundraising. But if your nonprofit hasn’t pursued recurring donations, you’re missing out.

Here are six of the most important ways a recurring giving program can benefit your nonprofit.

• Financial Stability: The consistent flow of funds that recurring donations provide—and the ability to know how much money you’ll receive and when—will allow for more effective budget planning. The majority of recurring donors give on a monthly basis, with an average gift of $79.10. 
• Predictability: With recurring donations, you can forecast your organization’s revenue with more confidence. This predictability helps in making long-term decisions and investments. And recurring donors stick around, too. The average lifetime of a recurring donor is over eight years, which is significantly longer than non-recurring donors. 
• Sustained Growth: One of the best things about recurring donations is that they have a compounding effect. Over time, as more donors commit to giving on a recurring basis, the cumulative impact of these small, consistent contributions will really add up. The average recurring donor gives almost $950 every year!
• Donor Loyalty: Recurring donors tend to be highly committed to your cause. This loyalty is invaluable, as it often results in long-term support, advocacy, and even word-of-mouth referrals to friends and family. The average retention rate for recurring donors is 78%, which says a lot about their long-term commitment to the organizations they support.
• Reduced Fundraising Costs: It is much, much less expensive to retain an existing donor than it is to acquire a new one—especially if that new donor only ends up making one gift. By focusing on your existing donors—you’ll get a lot more bang for your buck. 50% of recurring donors even give additional gifts beyond their regular contributions!
• Mission Consistency: When you rely on a few major donors, it’s all too easy to mistake their priorities for your own. On the other hand, sustained support from a broad base of recurring givers empowers your nonprofit to stay true to its missions. Maybe that’s why your average nonprofit raised about $15,469.54 in recurring revenue by 2022, a 144% increase from 2018!

Lastly, did you know that recurring donations are actually one of the few forms of nonprofit giving that’s on the rise? It’s true! The average nonprofit saw a significant increase in its recurring donor base, with a growth of 127% from 2018 to 2022.

How do we know so much about recurring donors? We’ve done the math, that’s how! We analyzed over 100,000 recurring donors who supported more than 2,000 nonprofits over a five-year span to create The Recurring Giving Report: Data-Backed Insights for Sustainable Generosity.

What we’ve shared here is just scratching the surface of how recurring donors provide unparalleled value to their favorite nonprofits. To get the full story, download the report today!

How to Set Up Recurring Donations in 6 Steps

Setting yourself up to take recurring donations is a straightforward process that can yield massive results. If you need to create options for recurring donations at your nonprofit, here’s a step-by-step breakdown you can follow. 

Step 1. Choose a Trusted Platform

We’re calling this “Step 1,” but it’s more like “Step 0”—your nonprofit should already be using some kind of fundraising platform to manage your giving! If you aren’t, it’s time to find one. Find a platform like Neon CRM that offers easy-to-use tools that enable donors to set up recurring contributions securely. If you don’t know where to start, here’s a whole list of ones to choose from

Step 2: Configure Your Payment Gateway

Before you can start receiving recurring donations, it’s essential to configure your payment gateway within the chosen fundraising platform. This step involves connecting your nonprofit’s bank account or financial institution to the platform to securely process donations.

By linking your preferred payment gateway provider (e.g., Neon Pay, PayPal, Stripe, Authorize.Net) to your fundraising platform account, you are ensuring that the platform can securely process your donors’ transactions.

Step 3: Customize Your Donation Page

Once your account is set up, customize your donation page to reflect your nonprofit’s brand and mission. This includes adding your logo and other branding elements like colors and fonts to the page—otherwise, a donor might think they’re getting scammed and decide not to give. 

You should also add a compelling description of your nonprofit’s mission and impact, as well as any images or videos that can help tell your story. If you want more insight into building a great donation form, take a look at this article on how to set up a donation form.

Step 4: Enable Recurring Donations

In your fundraising platform’s settings, enable the option for recurring donations. This may involve specifying the frequency (e.g., monthly, quarterly, annually) and the start date for recurring gifts. Be sure to communicate to donors the benefits of recurring giving, such as long-term impact and convenience.

Step 5: Set Donation Amounts

Offer donors flexibility by providing options for different donation amounts. You can suggest predefined amounts or let donors enter their preferred donation. Your suggested donation amounts should provide your donors with a range of gift amounts that cater to different budget levels. 

This is a great time to run some reports in your donor database and see what kind of gifts your supporters are already making. If your average recurring donor gives $30 every month, that’s a great place to start the suggested amounts on your form. 

For each pre-selected amount, try providing context for how each donation contributes to your mission. That will help donors understand their potential impact and make the option to give regularly more appealing.

Step 6: Test, Test, Test

Before going live with your donation page, test the entire process from start to finish. Then, test it again. 

Make a sample recurring donation—or several—to ensure the transaction and email confirmations work as expected. Did it work? Great! Now, keep testing. 

The process may look different on desktops, tablets, iPhones, Android devices, and even different web browsers. Take into account what kind of device, browser, or credit/debit card your donors might be using and test them all. 

4 Tips for Getting More Recurring Donations

Once recurring gifts are enabled on your donation form, you can just sit back and watch the revenue roll in, right?

Wrong! It’s just the first step of a long journey. 

To get recurring donors signed up and staying on, you’re going to need an ongoing recurring giving strategy. Here are four best practices you can use to ensure that that strategy is a success.

1. Launch a Recurring Giving Program

A recurring giving option on your donation form is only the start. Next, you’ll need to create your recurring giving program that gets your donors excited and engaged. 

To ensure your program’s success, it’s crucial to have a comprehensive launch strategy that covers all your bases. Here are some of the things you should do: 

• Develop a Marketing Plan: Start by creating a detailed marketing plan that outlines how you will promote your recurring giving program. Identify your target audience and the key messages you want to convey about the benefits of recurring donations.
• Use Multiple Channels: To reach potential donors effectively, talk about your program on  various channels such as email, social media, and your website. Each platform offers unique opportunities to connect with your audience and share compelling stories about the impact of their support.
• But Especially Use Email: Utilize email campaigns to reach out to your existing supporters and introduce them to your recurring giving program. Personalize your messages to show how their sustained support can make a difference.
• Throw a Launch Event: Kickstart your program with a special launch event or campaign that captures the attention of your community. This could be a virtual event, a social media challenge, or a dedicated fundraising drive. The goal is to generate excitement and encourage immediate sign-ups.
• Promote The Program on Your Website: Make sure your donation page is prominently featured on your website. Highlight the option for recurring donations and explain how these contributions provide steady support for your mission.
• Promote It on Social Media, Too: Use social media platforms to spread the word about your program. Share stories, testimonials, and impact statistics that illustrate the value of becoming a recurring donor.
• Name Your Recurring Gift Tiers: Adding names to your recurring gift program—or even individual giving tiers—can add a personal touch and make the program more relatable. Whether you choose fun names like “Superfan” or “Cat Lady” or more serious ones like “Supporter” or “Friend,” this approach can help donors feel a sense of belonging to a special group.

By following these steps and ensuring a coordinated launch, you can set the stage for a successful recurring giving program.

2. Engage and Acknowledge Your Donors

To keep your recurring giving program going strong, you’ve got to prioritize building and maintaining strong relationships with these recurring donors. Regular engagement and acknowledgment not only foster loyalty; they will also reinforce the impact of their contributions.

Make it a priority to send personalized thank-you emails to your recurring donors expressing your gratitude for their support. Beyond saying “thank you,” keep in mind that one of the key reasons donors continue their support is the belief that their contributions are making a meaningful impact. Provide your recurring donors with regular updates and reports that showcase the outcomes of their generosity. 

Consider recognizing your recurring donors on your website or in your newsletters. This public acknowledgment not only shows your appreciation but also encourages others to consider joining the program. 

Offering exclusive perks or benefits to recurring donors can be a great way to show your appreciation and keep them engaged. This could include early access to event tickets, special updates from your leadership team, or even a small gift as a token of your gratitude.

3. Foster a Community of Recurring Givers

As Tim Sarrantonio, Director of Corporate Brand for Neon One, suggests in The Recurring Giving Report, “Your recurring giving program will work best when it’s designed to build a community of donors who work together to support your cause.” 

Organize special events or create online communities specifically for your recurring donors. These platforms can provide opportunities for donors to connect with each other and with your organization, creating a sense of belonging and shared purpose.

Empower your recurring donors to become advocates for your cause. Provide them with tools and information to help them spread the word about your nonprofit and the importance of recurring giving.

Finally, look ahead and plan for the future growth and expansion of your recurring giving program. Set goals, explore new opportunities, and adapt your strategies to meet the evolving needs of your nonprofit and your donors. Speaking of which …

4. Monitor and Adjust Your Strategy

To ensure the long-term success of your recurring giving program, it’s crucial to regularly monitor its performance and be responsive to feedback and changing needs.

Utilize the data and analytics provided by your fundraising platform to keep track of key metrics such as donor retention rates, average donation amounts, and the overall growth of your recurring donor base. This information will help you understand what’s working well and where there might be room for improvement.

Actually, listening to your donors—as opposed to simply analyzing data about them—is also essential. Collect feedback through donor surveys, direct conversations, or social media interactions.

Based on the data and feedback you receive, make necessary adjustments to your communication strategy and your donation process. This might involve tweaking your donation page messaging, experimenting with different email formats, or adjusting the frequency of your updates to better resonate with your donors. 

If you see new sign-ups or retention lagging, experiment with different incentives or approaches to encourage participation in your recurring giving program. This could include matching gift campaigns, exclusive content for recurring donors, or special recognition for those who commit to long-term support.

Your nonprofit’s and donors’ needs may change over time. Be prepared to adjust your strategy as needed to ensure that your recurring giving program remains relevant and effective.

Now’s the Time to Set Up Recurring Donations

Recurring donations can be a game-changer for your nonprofit. By providing sustainability, growth, and donor loyalty, a well-run recurring giving program can take your organization to the next level. 

It may take a little while to build a base of recurring donors, but the payoff will be worth it. If you don’t have recurring donation options set up, what are you waiting for? Download The Recurring Giving Report: Data-Backed Insights for Sustainable Generosity today and get started!