The “Netflix effect” might not be not new anymore as people have become used to paying monthly for any number of products, not just streaming services but anything from razors to fundraising software.
For for-profit firms and nonprofits, what’s not to like about the stable, recurring revenue, but consumers also like the idea. The majority of donors in a recent survey said they appreciate the affordability of segmenting gifts over time (61%) but also feel like their recurring gift enables them to continuously support an organization (56%) — making more of an impact than a one-time gift (47%).
The insights come from the 2021 Recurring Donor Sentiment, a new 21-page report from Classy, a San Diego-based fundraising platform. Some 38% of the 1,000 individuals polled feel more connected to a nonprofit when they give regularly. Almost half of those surveyed appreciate the physical swag associated with recurring giving (45%) and exclusive access to cause-related events (44%).
The survey was conducted in May, polling 1,000 individuals who donate to a U.S.-based charity on a recurring basis, whether weekly, monthly, quarterly, or annually.
Combined, Millennials and Generation X comprised almost three-quarters of the recurring donors surveyed. Millennials account for nearly half on their own (44%), followed by Generation X (28%), Baby Boomers (18%), and Generation Z (11%).
The number one reason why donors stop recurring giving is that donors might have experienced “shifting financial priorities” (56%). Less than one-third (29%) chose to give one-time donations instead and about one in 10 said they didn’t know if their funds were making an impact (11%); didn’t have any easy way to stop or pause donations (9%); or, had an expired credit card or one that was not updated (8%).
If donors don’t know if their gift is making an impact, don’t be afraid to reach out to them. Fewer than one in 10 recurring donors (7%) said they want to hear less from the organization compared with 38% who said they would love to hear from the organization more often.
What should you talk about with your recurring donors? Almost three-quarters (73%) of donors like to know the “exact impact their donations make on an organization” while more than half (53%) like “opportunities to connect with those who benefit from their donations.” About 1 in 8 (13%) like stories and anecdotes about the impact donations make on their programs and the people they serve.
Consider offering flexible payment methods. Among survey respondents, the most popular methods by a wide margin were debit cards (34%) and credit cards (30%). Far behind those two are a paper check (10%), e-check (ACH) (9%), Venmo or PayPal (6%), and digital wallets (4%).
Likewise, be flexible in how often donors can give by offering more recurring gift frequencies. While more than two in five respondents (41%) said they prefer to give monthly, there was a wide range of preferences. A little more than 1 in 6 respondents (16%) prefer to give weekly, 13% prefer to give quarterly, 1 in 10 prefer bi-weekly, and even 7% like to give daily.
“It’s one thing to have a recurring donation option for donors, and another to have a strong and sustainable recurring giving program,” according to the report’s authors. “Take this opportunity to identify where your organization can offer frictionless and flexible ways to support subscription giving. After all, there’s no better experience than one that’s created by the voices of recurring donors themselves.”