By Beverly Bain
Philanthropy on an Easy Payment Plan
Many years ago (no need to discuss how many), I signed the lease on my first apartment. I proudly took possession of my key, unlocked my door, and stepped inside to find…a lot of empty space. It was time to go furniture shopping. As a poor college student, I didn’t have a lot of extra cash to fill an apartment with furniture. As a single mom, I wanted to buy the nicest bedroom set I could find for my daughter. The local thrift stores and secondhand furniture shops didn’t have much.
At one of the local chain furniture stores, though, I found just the bedroom set I was looking for—a four-poster canopy bed with a matching dresser in walnut and ivory tones with pink rose accents. To my delight, the furniture store offered a payment plan. While the price tag on the bedroom set was too much for me to pay in one chunk, modest monthly payments were totally doable. My daughter was thrilled with her new bedroom set, and it didn’t break the bank for me.
Today, many new graduates and young alumni are in a position not unlike mine back then. As they get on their feet, they have bills to pay, student loans to pay back, and bank accounts without much money. When their university’s annual fund calls and asks for a gift, $100 seems like a lot. Low monthly payments seem much more doable, especially without the commitment of giving until a set amount is paid. For this reason, the recurring gift is a perfect solution for many alumni.
The Hidden Value in Recurring Gifts
While recurring donors typically give a smaller amount at a regular frequency, don’t let that smaller amount fool you. In 2014, Network for Good reported that donors who set up a recurring gift gave 42% more per year than donors who gave one-time gifts. In an analysis of five years of giving data, Monumental Fundraising reported that lifetime giving was consistently higher for recurring donors, who gave two to four times as much as one-time donors. In addition, young people are recognizing that recurring gifts are a feasible option. According to Network for Good’s previously cited study, 52% of millennials are interested in monthly giving.
While higher education has not aggressively focused on recurring giving, the tide may be turning. Inside Philanthropy reported in 2013 that the previous year’s growth in total fundraising from recurring online giving increased by 73% for higher education. In the same report, average monthly donations increased by 10% for higher education. As institutions see the value in recurring giving, they are adjusting their annual giving efforts accordingly.
4 Tips for Recurring Gifts
If you’re looking to build or grow a recurring gift program, here are some tips to help:
- Craft a strategy around increasing recurring giving support. Will you target certain segments specifically for recurring giving, or broadly seek increased recurring giving support? Is your online giving page optimized for mobile giving, and does it encourage donors to make recurring gifts? Will you incentivize recurring giving, and if so, how? Will you ask a recurring donor to increase their commitment on a regular basis, and if so, when and how?
- Evaluate your existing data if you’ve conducted efforts to bring in recurring donors in the past. Which kinds of solicitations brought in the most recurring donors, and what specifically made people respond well? Conversely, what kinds of efforts didn’t work?
- Develop a process to identify recurring donors who give by credit card and whose credit cards are about to expire. Ideally, this process should contact them automatically and encourage them to update their card information.
- Consider how you will steward recurring donors. A recurring donor that gives $100 per month will give more in a year than a donor that makes a single $1,000 gift—are your stewardship processes set up to recognize the recurring donor for the total value of her gift over the year?
If you haven’t made recurring giving an important part of your overall fundraising strategy, I hope this has given you food for thought. Recurring gifts can be a great way to increase your overall support and reach alumni who might not give otherwise.
About the Author
Beverly Bain is a Senior Product Manager at roundCorner. With 15+ years of experience in higher education advancement, Beverly oversees the development of Advancement Connect to ensure a positive experience for faculty, students, and alumni. Advancement Connect is the constituent-centered fundraising solution for institutions of higher education, helping to build and nurture life-long relationships with alumni and supporters.