Benefits of Sustaining Donation Options for Nonprofits

Anybody who’s ever caught part of a public media pledge drive certainly knows about sustaining donations. But did you know that just about any nonprofit organization can set up a sustaining donation option for their members? Also called sustaining memberships, recurring donations, monthly donations, etc, the concept is simple: rather than an individual or organization giving a single, one-time donation, they give repeatedly over an extended (or perpetually ongoing) time period. 

Many organizations see a sustaining vs one-time donation as a “six of one, half-dozen of the other”-type situation where neither is more beneficial, so they don’t take the time to set up a sustaining option. But the truth is, there are many advantages to setting up a sustaining donation option that can help your nonprofit succeed.

Monthly giving means more predictable funding

One of the biggest benefits to offering sustaining membership or giving option to your donors is that it makes your funding more predictable. Rather than trying to budget for an entire year based off of the predicted donations from your big, once-a-year gala or donation drive, you can see money coming in monthly and plan accordingly. 

Additionally, because sustaining donations see greater donor retention (more on that in a bit), you can more confidently predict future donation amounts based on the number of sustaining donors you have. More predictability gives you more confidence to put the money where your organization needs it and run your organization more effectively.

Increase donor retention with sustaining donations

A sustaining donation option also means significantly higher retention rates than focusing on one-time donations. Think about it intuitively: If you give to an organization once, or even give once a year, every time they reach out again, it’s like making a decision all over again. You’re weighing the costs, the benefits, your motivations, and playing the sales game back from square one. But if you’re donating every month (even at a significantly smaller amount), it’s much easier to just say “yeah, I’ll keep that going” than it is to justify another larger one-time expense.

But as someone who lives and breathes donations, you don’t just want intuition–you like data. And the best thing about this is that the data confirms it: According to Network For Good, new donor retention rates hover around 20%, while a remarkable 80-95% of monthly donors will maintain (or even increase!) their donations into the new year. Assuming donor retention is important to your nonprofit, there’s no reason not to have a sustaining option.

Sustaining giving options reduces overhead costs

You’ve likely heard the old business adage that it costs 5 times more money to acquire a new customer than it does to retain an old one, and that sentiment holds true for nonprofits, as well. Donor Acquisition Cost (DAC) is often a significant expense, as it takes time, money, and energy to track down prospective donors, identify effective pitches, and plan/implement the outreach strategies. Once you have a donor’s information in your CRM, retention campaigns can be (relatively) easy to and painless to set up and execute–they often require less intensive planning, less aggressive action, and fewer costly expenses. 

Combined with the higher retention rates for sustaining donors discussed above, it’s easy to see why a sustaining giving option can help reduce your costs significantly over expensive acquisition programs. A great CRM for nonprofits–like Salesforce–can help reduce overhead costs even further by helping organize your donor information, giving you data to help plan effective retention campaigns, and automating processes so you don’t have to worry about devoting so many work hours to every project.

More engaged donors give more

We’ve saved the best for last: statistically speaking, sustaining donors simply donate more money to your organization. For many donors, it’s a matter of mental framing. It’s easier to process and justify $10/month for 12 months than it is to mentally justify a single, $120 gift, even if the amount is the same–but because of that, the amount often isn’t the same. 

Research shows that on average, recurring donors give 42% more money on an annual basis than one-time donors. Beyond just that, sustaining donors are more likely to upgrade to a higher giving level when they renew their donation than annual or one-time donors, meaning not only do they give more initially, but are more likely to increase that number over time as well.

Sustaining giving options help nonprofits achieve their goals

As we said at the beginning, sustaining membership isn’t just for NPR and PBS anymore. Whether it be from higher retention rates, lower acquisition costs, higher annual giving amounts, or even just a more predictable funding stream, any nonprofit organization can benefit greatly from giving their donors the option to sustain. 

Are you looking to start a sustaining giving option for your nonprofit organization, but aren’t sure how best to set up Salesforce to bring about the best results? Redpath Consulting Group has had the privilege of working with more than 300 organizations to deliver customized Salesforce solutions built with the success and longevity of our clients in mind, and we’d love to help you. 

Contact us here to start a conversation and find out what works best for you.