Just as a handyman needs different tools in his toolbelt to successfully complete a variety of jobs, so too do fundraisers need knowledge of several different strategies when they are looking to raise money for their organization. It is critical for fundraisers to be well-versed in the various types of gifts and donors they should pursue and how they can go about doing this, as this will allow them to truly choose the right “tool” for their particular context.
So, in this blog, we’ll do a deep dive into two of these gift types: recurring and one-time gifts, considering questions like: what, exactly, are each of these gift types? What are the pros and cons of each? And how your organization may go about pursuing each type.
Recurring Gifts
Recurring gifts are just what they sound like — gifts given on a consistent schedule over an extended period of time. Many studies have shown that though these gifts individually tend to be smaller, recurring gifts are vital to nonprofit organizations’ life and financial health. Here are a few of the reasons why:
- First, the predictability of recurring gifts is helpful when it comes to budget forecasting and planning. Of course, an organization’s total amount of monthly donors and the amount those people are giving will ebb and flow, but it allows the nonprofit the ability to make a reasonable guess in terms of the donations they can count on each month.
- Monthly gifts end up adding up to a larger amount than a typical one-time gift. Monthly donors give 42% more in one year than average one-time givers. Monthly donations average about $52/month, adding up to $624/year, while an average one-time gift is $128.
- Recurring gifts increase donor retention. Monthly givers are more likely to continue giving year-over-year. This is likely due to the sustained impact that these donors are able to see over an extended period of time, as well as the organization’s ability to get to know and build relationships with these people.
As evidenced by the above, there are certainly compelling reasons to focus on your organization’s monthly/recurring gift program. If you are in the beginning stages of creating yours or even if you are looking to fine-tune one that already exists, here are a few steps you can take.
First, develop your strategy. Consider things like: what are we trying to accomplish through monthly giving? Will those dollars go to a specific program or cause? How does our recurring gift program connect to our mission, vision, and values?
Next, set some goals. How many monthly donors would you like to have? What is the average dollar amount you’d like to bring in monthly? How can you increase the gifts of existing donors?
Then, hammer out the details like who your audience is, how you’d like to market to them, and how you’ll evaluate the success of the program.
Lastly, it’s time to execute! Put the plan you’ve created into action, knowing it may take some time, as well as trial and error to have the success you desire. But, over time, you are likely to find that focusing at least some of your efforts on this type of fundraising will yield extremely positive results for your organization.
One-Time Gifts
Although there is a lot merit in the argument to focus heavily on recurring gifts, one-time gifts should certainly not be ignored — especially when talking about major gifts. A small one-time donation is helpful, but you likely have not moved the financial needle significantly, and you also haven’t necessarily gained a loyal, returning donor — but major donors are a bit of a different story. In fact, one recent study showed that around 80% of funds received by nonprofits come from just 12% of donors. So, when talking about the efforts you and your team should be putting toward one-time gifts, we are really talking about the category of major gifts.
When thinking about what qualifies as a major gift, it’s important to remember that there is no official industry standard. Depending on the size and scope of your organization, though, you may want this number to be either lower or higher.
In terms of strategy for obtaining one-time gifts, there are four basic steps:
- Identify potential major donors. This is where Atticus can help. Our technology does the work of identification for you—looking at several factors to find potential major donors that align with your organization’s mission, vision, and values. Among those factors are indicators of wealth (like real estate and stock ownership), as well as past giving history and philanthropic involvement. Our platform can help you find completely new donors or people who have given in the past but have the potential to give significantly more (these may also be your current recurring givers!).
- Growing the relationship. Once you’ve identified potential new donors, you will need to determine how best to approach an introduction and any subsequent relationship building. Atticus proves quite helpful here, as well, as we are able to specifically identify the ways in which a potential new donor is connected to your organization and what might endear them to your mission.
- Making the ask. This step — the step of actually asking a donor for money — can feel quite daunting. For an in-depth look at how you can do this, check out our blog, “Making the Ask.”
- Maintaining the relationship. This is just what it sounds like — continuing and growing this newly established relationship. This likely includes frequent and personalized communication or time spent in person and one-on-one, making sure these donors see clearly the impact their money is having on your cause.
Which type of gifts should you focus on?
Though it may seem like you need to focus your efforts on either one of these strategies, the reality is that both have a role in your organization’s fundraising at any given time. That being said, your current state and various circumstances may dictate how much focus and weight are being put on either of them at a certain moment. But long term, both will prove relevant to your various fundraising needs.
Perhaps a good place to start, though, is a current-state analysis. Do you have a thriving monthly donor database, but you’re lacking those few times-a-year major gifts? Maybe the opposite is true, and you have solid relationships with several major donors, but you’re missing out on what adds up to be significant support through small, but consistent gifts. Consider your organization’s goals, and where you are in meeting those. Which of these strategies is the most practical for getting you there?
This is a simple step, but it is the best way to ensure that your efforts are productive and worthwhile. If you identify an organizational need for more major donors, Atticus is here to partner with you. We are ready and excited to help you make the most of your fundraising strategies and raise the funds you need to further the mission of your organization. Let’s fully fund your organization’s great endeavors.
