Recurring Gifts are NOT the “Poor Stepchild"

At AFP ICON in New Orleans in April, I walked the halls and looked into various meeting rooms to get a sense of each presentation. It was disappointing to see that the room where they were talking about recurring gifts was mostly empty.

I’ve tried and tried to understand it, but I can’t figure out the nonprofit world’s reticence, if not aversion, to embracing the use of recurring gifts. Is it just resistance to change, or is it something else?

Regardless of the answer, I’m determined to get our sector onto the recurring (monthly) gift train, so here’s a list of facts, stats, and anecdotes to help you fully understand what you’re missing. If you’re way ahead of the curve and you already have a robust recurring gift program, then (a) kudos to you! and (b) these stats should help reinforce your commitment to recurring this giving tool.

See below, and I challenge you to write me if you have some type of information that supports?not?actively promoting recurring gifts.

Here’s what’s happening in the sector currently:

1. According to the?Q4 2022?Fundraising Effectiveness Survey,?donor retention decreased at all levels of giving. In addition, and for the first time since 2012,?the dollars given by donors — in all categories — decreased.?The result is fewer donors and less money — all in the 4th quarter, when you would expect a higher level of giving.
2. The?FES?also shows that the?new donor retention rate dropped to 16.9% year over year, continuing the downward trend of more than a decade.
3. The same?Fundraising Effectiveness Survey?report also shows that, for repeat donors,?the $100-$500 category declined the least, relative to all other giving categories.
4. According to the?2023 M+R Benchmarks report,?Giving Tuesday revenue was 13% lower than in 2021.

And yet:

1. According to the 2023 M+R Benchmarks report, their research tells us that?monthly giving increased?by 11% in that time period, and accounted for 28% of all online revenue in 2022.
2. Also per the M+R report,?revenue per monthly donor was $287 in 2022, and revenue per one-time donor was $192.

3.?Double the Donation’s?MatchPro?tells us that:

• Revenue from monthly gifts has increased by 22%, which is more than?twice as much revenue as from one-time gifts.
• Recurring donors give 42% more?per year than one-time donors.
• 57% of donors are enrolled in a recurring giving program, up 46% from the previous year.

1. According to?Network for Good, “recurring donors will often become your most engaged supporters, actively volunteering, advocating, and?fundraising on your organization’s behalf. A recurring giving program offers you the opportunity to regularly communicate with these loyal supporters, keeping them engaged, updated, and inspired about your purpose.”
2. Also per Network for Good, “While new donor retention rates?average less than 20%,?monthly giving programs typically enjoy retention rates of over 80% after the first year and over 95% after year five. Ultimately, you’ll get a better return on your donor acquisition investment if you can encourage more one-time donors to become recurring donors.

• Finally,?Classy’s research reports that “of all one-time donors who return to start a recurring giving subscription,?25% go on to make an additional one-time gift?on top of their recurring gift.?Of those recurring donors, 51% return to also give through a different campaign type.

However, recent research shows that this is the current status of the recurring giving picture:

1. Only 14% of nonprofits prompt donors to make their donation a recurring gift during the donation process.
2. 91% of organizations stop acknowledging recurring gifts by the third month.
3. 1 in 4 nonprofit organizations doesn’t try to re-secure a recurring donation after a credit card number changes.

And in the business/for-profit world, where subscription services have been the norm for decades, this is what’s happening:

• Per?C+R Research, “Overall, about three-quarters (74%) of consumers said it was easy to forget about their recurring monthly subscription service charges. Meanwhile, a significant minority (42%) admit that they’ve stopped using a subscription service(s) but forgot they were still paying for the service (with Gen Z being most likely to forget and Boomers least likely). It appears that it’s pretty easy to forget about payments considering that the majority (72%) said they set all their monthly subscription payments to auto-pay.

Imagine what would happen if someone?wanted?the subscription (in the case of nonprofits because it’s doing good and feels good to give)? If 72% set their monthly subscription payments (in this case, monthly donations) to auto-pay, wouldn’t that change our world?

One last note:

A small but growing nonprofit called “Mi Vecino” caught my eye recently, as they really seem to “get it” about recurring gifts. Everywhere they ask for money, they have a “Donate” button followed by a “Donate Monthly” button (so donors can do one or both!) Their pitch for giving monthly is?“Want to help us plan for the future and scale up our outreach by Giving Every Month?”?They even have a snappy name for their monthly donors. They call them “GEMs”. (get it? Giving Every Month=GEM). Another one I just saw says “Keep the momentum going with a monthly gift”. Love it!

And in case you’re wondering, I personally give several organizations monthly gifts, and I love that relationship.

Have I convinced you yet? I hope so.