Recurring donations are an easy, innovative way to boost your campaign’s fundraising efforts! These gifts are automatically charged to donors’ credit cards at regular intervals chosen by the donor, usually every month.
In WidgetMakr, adding a recurring gifts option is an easy step when building your widget. When designing a WidgetMakr donation form, you can customize the checkbox label, set the frequency of the donations and decide when the recurring contributions should end – usually on Election Day. You can even highlight the checkbox.
Why are recurring contributions a great idea?
Recurring gifts add up.
With recurring contributions, small gifts add up to make a big impact. Ten months before an election, a contribution of $10 per month is the same as a contribution of $100. For campaigns, it’s much easier to ask for at $10 donation! Many donors like the option giving to a campaign in small but regular installments. This way, it’s easier for some donors to give a larger amount overall than they could give in a single, lump sum.
Recurring gifts are convenient.
Once a recurring gift is enabled and the frequency is set, that amount is automatically charged to the donor’s credit card at the designated time. The campaign or organization doesn’t have to send a reminder or prompt the donor for an additional donation. It’s a streamlined, automatic process. Donors only need to take action if they want to stop the recurring gift.
Recurring gifts are efficient.
When donors give recurring contributions, campaigns can spend less time and effort on fundraising. As a result, they can spend more time and resources on reaching out to voters or new donors. Donors can feel confident that more of their contribution is actually funding campaign activity, rather than supporting further fundraising efforts.
Recurring gifts are reliable.
Recurring contributions provide campaigns with a reliable cash flow. It can be hard for campaigns to predict how successful future fundraising efforts will be, but with reliable funds from recurring donors, campaigns can confidently plan for the future. The recent M+R 2016 Benchmarks Study found that monthly, recurring gifts account for 17% of all online revenue among the nonprofits included.
Do recurring donation generate more funds?
Recurring contribution plans are not exactly a new idea. In fact, according to recent research, 80% of donors to European nonprofits give recurring contributions. The concept continues to grow in the U.S. According to the M+R study, in 2015 recurring gifts grew by 24% across all nonprofit sectors, compared to only 18% growth for one-time gifts.
In 2009, the nonprofit consulting firm Blackbaud conducted an extensive study of 18 major nonprofits with recurring giving programs. Based on data from these organizations, they discovered interesting trends in recurring giving:
While recurring donors give smaller individual contributions, research shows that recurring givers donate more in total – over 200% more per year compared to single-gift donors! Even after taking giving loyalty into consideration, recurring donors still give about 60% more after five years.
- · Recurring donors keep giving: Recurring donors have higher retention rates. According to the Blackbaud study, only 26% of first-time, single-gift donors give again the next year, while 68% of recurring donors give again. This trend persists over time. After four years, 31% of donors who first gave recurring contributions and 16% of donors who first gave single contributions were still giving.
- · Anyone can become a recurring donor: The study even shed light on the demographics of recurring givers. Surprisingly, the income profile of recurring donors is similar to that of single gift donors. This means that recurring giving programs generate more funds, even from donors who have similar capacities to give. Most recurring gifts are made by credit card or electronic transfer fund. Maybe as a result, recurring donors tend to be younger.
- · Recurring giving plans aren’t perfect: Of course, recurring contribution plans aren’t a silver bullet for fundraisers. They come with some disadvantages. Recurring donors rarely give donations in addition to their recurring contributions, so campaigns shouldn’t rely on these donors if they suddenly need funds. Single gift givers are more likely to give larger contributions in future years, but donors usually don’t switch between giving recurring and single contributions.
Remember that recurring giving programs are relatively new to politics, and these statistics came from a study of nonprofits. It is hard to say how these trends could be different for political campaigns, since little data exists. Unlike nonprofits, campaigns have cyclical funding needs and face unique fundraising challenges. Still, it’s hard to deny the evidence that recurring contribution plans have the potential to boost campaigns’ fundraising efforts!
How can a campaign make the most of recurring donations?
• Start early: If your campaign plans to accept recurring gifts, start promoting this program as early in the election cycle as possible. The more time that’s left before the election, the more lucrative are recurring donors. Still, it’s never too late to start accepting recurring contributions. Remember that you can change how often donors are asked to give. Even a month before the election, a weekly contribution is very valuable.
• Ask specifically: Recurring contributions are a big commitment. When a supporter goes to your website to make a donation, he or she probably won’t sign up to make a recurring gift unless prompted. Call attention to the recurring giving option in your fundraising emails and on you donation form. Even highlight the recurring contribution checkbox!
• Thank accordingly: Recurring donors are among your campaign’s strongest supporters, so be sure to thank them for their dedication! Remember to account for their aggregate giving with donor thank yous and sponsorship levels, rather than placing them with small, one-time donors. A donor that gives $100 per month should be thanked at the same level as a one-time donor giving $1,200.
• Watch out for glitches: Recurring donation plans give rise to a few new technical issues. Be aware that recurring donors could eventually exceed FEC contribution limits. Although it’s unlikely, if a donor starts a $500 monthly donation a year before the election, he or she will have surpassed the federal contribution limit by Election Day. For Crimson users, these donors will automatically be flagged as possible over-limit contributors. Also remember that donors usually sign up to make recurring contributions with a credit card. Eventually, these credit cards will expire. Ensure that you have a system for reminding donors to update their records. If using WidgetMakr, accounts will automatically be updated for Visa and MasterCard donors that do not change card numbers. However, if your donor is using American Express or their card number changes, they will manually need to update their recurring gift.
• Remind donors that gifts to political campaigns or PACs are not tax deductible: Because recurring gifts have seen tremendous growth in the nonprofit sector, it is easy for donors to get confused. Make sure that your donation forms, gift receipts and thank you letters include this reminder.