The Power of Recurring Revenue

In any business, recurring revenue is king.

By its very nature, recurring revenue is earnings that come in, like clockwork, each month or year. This makes revenue predictable and stable, and thus, more valuable than other types of revenue.

For a nonprofit, the same concept applies. By cultivating donors and encouraging them to give monthly on a recurring schedule, you are creating an annuity revenue stream your organization can count on.

Especially during challenging economic times, this predictable income for your nonprofit can provide a sense of security and ensure you can continue your mission uninterrupted.

According to Nonprofit Source, 45% of donors enroll in monthly giving programs, and typically give around 42% more annually when compared to one-time donors. So not only does recurring revenue provide stability, it can also increase the income value of those donors.

Strategies to help you increase your recurring revenue stream:

  1. Small and steady wins the race
    The power of recurring revenue is harnessed as small amounts given consistently add up. You will likely be more successful in cultivating recurring givers by making the asks small and comfortable. Not only does this help your organization as these recurring donations add up, it helps the donor by providing them a consistent and budget-friendly way to support your organization.  

    Pro Tip: Tailor your monthly ask to the donor. According to Erica Waasdorp, who wrote Monthly Giving: The Sleeping Giant  a good rule of thumb is to ask for about a third of the one-time gift level. This ensures that donors who support your organization at differing levels are provided options to fit their budgets and their historic giving levels.
  1. Increase the prominence of recurring giving in your fundraising communications.
    Whenever you ask for donations and support, ask for monthly recurring donations. Encourage donors to make their one-time donation a recurring monthly donation. Be sure your online giving page has information on how the monthly donations positively impact your organization.
  1. Don’t just “set it and forget it”.
    Make sure to keep engaging effectively with your recurring donors. It is easy to fall into the trap of taking your recurring donors for granted. After all, your online giving tool likely just processes those donations and they end up in your donor database automatically. Make sure to keep up with meaningful engagement with those donors.

    Pro Tip: Make sure to watch for expiring credit cards or failing payments. Ideally, setting up notifications through your payment processing provider on when cards are expiring or transactions don’t go through.
  1. Use your existing data to create a list of potential recurring donors you can appeal to.
    Certain donors may be better candidates to ask for recurring donations. Use your donor CRM to pull lists similar to this:
  • Donors who already typically give multiple times to your organization in any given year. These are already repeat donors, so getting them to move to a more structured recurring giving schedule may be a fairly easy jump.
  • Donors whose average one-time gift is on the smaller side. I would say usually under $50 for average one-time gifts.
  • Donors who have previously given one-time gifts online. These donors have shown they are comfortable with online giving and may be more likely to give recurring online donations.

As we approach the halfway point of this unpredictable year, make sure to implement successful recurring revenue strategies in your nonprofit planning process.

Also, if you need more nonprofit-centric insight for your strategic planning, make sure you download our free ebook Mission: Engage. It has already helped several nonprofits adjust their strategy and establish themselves in an increasingly competitive environment.