November and December tend to be the highest donation months for non-profits. There are a few different factors that contribute to this, including year-end giving drives, increased sense of charity around the holidays, and people hoping to reduce their taxable income for the year.
While it’s always great to get large donations at any time of the year, there are inherent challenges that come with most donations happening at the same time. Recurring and micro donations can solve those challenges and provide additional benefits to nonprofits and charities. In this article, we’ll explore the value of encouraging recurring and micro donations as well as how you can start driving both with passive donations.
What is recurring giving?
Recurring giving is a donation strategy that involves making regular contributions at a consistent interval. Monthly giving is one of the most common intervals, but donations can also be made weekly, bi-monthly, or quarterly.
What are micro donations?
There’s a common misconception that you have to donate hundreds of dollars in order to support an organization. In fact, donations of any size are beneficial. Micro donations are charitable contributions of smaller dollar amounts, often totaling less than $20. Instead of saving up for a lump sum donation at the end of the year or each quarter, micro donations can happen all year round.
What is passive giving?
Passive giving is equivalent to “passive savings” but for donations. Essentially, recurring and micro donations are happening in the background, without you noticing you're having to manually donate. Passive donations can be as simple as a daily or weekly recurring micro donation. But they can also use transaction-based logic, happen in the background via round-ups, be based on your financial health to avoid overdraft, and help you “donate what you can”. These donations are small enough so that individuals don’t notice, but over time it makes a difference.
Similarly, many workplaces are offering corporate matching these days. When you let them know you’re donating to a nonprofit, they may choose to match up to a certain percentage of your paycheck. This makes your donation go even further, without costing you any more money.
Why do recurring and micro donations matter?
Recurring donors are 440% more valuable than one-time donors. This is because supporters typically end up contributing more over the course of a year, since it's more manageable spread over time. Additionally, recurring giving is more convenient for donors — they’re already signed up for subscriptions, pay monthly bills, and more, so recurring giving fits into how they already spend their money. Along the same lines, nonprofits can ask for more money in a less threatening way by providing recurring options, instead of just requesting annual lump sums.
Driving recurring and micro donations is also more affordable for your organization. You don't need to continue to spend money and employee time marketing to recurring donors — they're already signed up to give regularly! Similarly, it’s much easier to retain an existing donor than to attract a new one. This makes their donations more cost-effective for your organization.
It’s important to not only consider the financial benefit of recurring and micro donations, but the functional benefit as well. Operational challenges occur when revenue only comes in during one or two months of the year. Spreading income out makes planning programming easier and provides a safety net.
Perhaps most impactful is the bond you’re able to establish with your donors through recurring and micro donations. You start to develop a sense of community with the donors who sign up to give regularly and can develop strong relationships with your most loyal donors. Instead of reaching out regularly asking for another donation, you can instead communicate about the progress you've made with their support.
Even better: passive donations
Intelligent passive donations combine micro and recurring giving concepts with a few caveats:
- They aren’t on a fixed schedule (typically)
- The donor doesn’t notice it — donations are made in a way that doesn’t affect their lifestyle or budget
- Donations are smart, based on transactions, lifestyle, and individual preference (the process is fluid, seamless, and holistic, but the donor is aware of their impact!)
Passive donations still bring stable income for the nonprofits, who in turn spend less time and money on fundraising activities.
How can I optimize for recurring giving and micro donations?
Start by eliminating friction from the donation process and make it easier for donors to have an impact faster. Create options for recurring giving and highlight the impact of recurring donations at different tiers. Ensure language on your site as well as options for giving provide the ability for donors to make smaller donations — potential donors shouldn’t feel like giving $50+ is the only option.
No matter the size of the donation, show your gratitude for the donor. Send a personalized thank you email and highlight the impact of their contribution. When someone signs up for recurring donations, consider sending them a physical thank you note and regularly reaching out via email to share the impacts of your program so they know how their donation is helping.
Empower Donors with bunny.money
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