Why a Recurring Donation is More Valuable than a Monthly One

You may already have noticed, but there’s been a shift in the way that nonprofits are asking for donations. Most would now prefer you give in the form of recurring monthly donations rather than a single annual contribution.

There are a few reasons for that. For one, the majority of annual donations come in at the end of the year, which puts most charities in a position where they’re relying on the last few weeks of the year to bring in the lion’s share of their annual operating budgets. They’ll spend months crafting the perfect year-end fundraising campaign, exhaust themselves executing it, and then … hope that it was enough.

When recurring monthly donations comprise the bulk of a nonprofit’s fundraising, it’s a much more reliable revenue stream. And the stability of that predictable income enables them to devote more of their attention to their mission.

Strengthening bonds
It’s also going to lead to better relationships with their donors. Rather than filling up their inboxes with pleas for more funding, much of the communication can now focus on how their gifts are making a difference—a crucial part of the equation that often gets left out under the annual-fundraising campaign model. Donors want to know that they’re helping, however modest their donation may be. Without that, their passion for the cause is likely to wither.

And, in fact, research indicates that donors who make recurring monthly donations are much more likely to bond with a nonprofit than those who donate annually. It’s not even close. Seventy percent of people who make an annual donation never make another to that organization, according to Dr. Adrian Sargeant, a professor of fundraising at the Lilly Family School of Philanthropy at Indiana University. In stark contrast, 80% of donors who make recurring monthly donations to an organization continue to do so after the first year.

Empowering the donor
Convenience plays a part in part in that. At this point, most of your expenses probably are withdrawn monthly from your checking or PayPal account—your Netflix subscription, car payment, that online dating app you haven’t used in three years, the gym membership you forgot you had.

For better and for worse, it’s the payment model that we’ve become accustomed to. Which makes it not only easier to continue donating to a given nonprofit—for four years, on average—but to give even more than we otherwise would. On average, recurring donors give 42% more per year than annual donors. That may be the intent for some. But most likely do it because $12 a month is easier to digest than $100.

Similarly, you’d probably be shocked to hear your Netflix subscription runs about $170 a year. And that’s because, at 14 bucks a month (withdrawn automatically), it practically feels free.

So, the recurring-donation model benefits both the donor and the charity. What matters most, though, is that it’s allowing more time and resources to be devoted to charities’ missions, and at no additional cost.