The Benefits of Shifting to Sustainer Giving

Last week, the nonprofit sector finally had some good news! The Fundraising Effectiveness Project announced that donations under $250 increased by 19.6% compared to the first half of 2019. These grassroots donors helped propel a 7% increase in total giving over 2019.

This is great news from the FEP, but what happens to these donors after they make their first gift? As we head into Giving Tuesday and the holidays, does your nonprofit have a plan to keep them engaged? With the pandemic putting nonprofit fundraising events on hold for the foreseeable future, building a solid sustainer giving, sometimes known as monthly or recurring giving, is no longer a best practice. It’s now critical to the survival of many organizations.

Since sustained giving donors are committed to your organization, these funds are often unrestricted and more flexible. In a year filled with uncertainty for events and grants, you need these donors more than ever before.  If facing the challenge of building a sustainer giving program to make up for fundraising shortfalls, remember these benefits.

1. Sustainers are converted event sponsors & attendees.

Since your regular event donors are aware that the big event won’t be happening, this is the perfect time to transition them to sustained giving. Launch or re-launch your program in lieu of the cancelled event.Your donors understand that your events raise funds to support the mission and operating expenses of the organization. Design your giving ask around the cost of a ticket or sponsorship. If tickets cost $100 each, ask the donor to give $10 a month for each ticket normally purchased. If a couple typically purchase two tickets to the annual gala, a monthly gift of $20 adds up to an annual contribution of $240.

2. Sustainers stick around.

For the past decade, the retention rate of annual donors has hovered around 50% according to the Association of Fundraising Professionals. By comparison, more than 80% of recurring donors are still giving after a year.

Since the biggest percentage of fundraising costs are in recruiting new donors, the commitment of sustainers helps your organization spend less on marketing and development and more on programs and services. While donor retention numbers vary across organizations, most donors will only give one time. When a donor sets up a recurring gift, even at $5 or $10, that’s a $60 or $120 annual contribution you can depend on each year.

3. Sustainers are long-term investors.

If donors are key stakeholders in your campaign or organization, you should view recurring donors as important investors. While they might not be writing one big check, they are firmly committed to your cause and can be dedicated evangelists and volunteers. A recent survey from Fidelity Charitable found that despite the pandemic, 54% of donors plan on maintaining their current giving, and 25% plan on increasing it.

4. Sustainers give more.

In addition to sustainer gifts adding up over the course of a year, the lifetime giving value of a sustainer donor is significantly higher than a one-time donor. A study from Classy found that sustainer donors gave an average of $795.62 over a period of six to 13 months compared to $147.23 from a single gift donor.

5. Sustainers are growing.

Over the past decade, there’s been tremendous growth in sustained giving. The 2019 M+R Benchmark report found that monthly donors grew by 22% while one-time donors only grew by 8%. As the use of online bills and credit cards has grown, so have sustainer donors. Sustained giving now accounts for 17% of all online revenue for nonprofits.

However, this is a revenue stream that many nonprofits miss. According to NextAfter, only 14% of nonprofits give donors the option to make their gift recurring.

6. Sustainers help diversify your donors.

Because sustainer donations are set up through credit or debit cards, they are popular among Millennials, who are now in their thirties, buying homes, and starting families. Because of their youth perception, they are often an untapped group of potential donors. The 2018 Global Trends in Giving Report found that 55% of Millennials prefer to give online through a credit card and 40% are enrolled in a recurring giving program. Due to their youth perception, Millennials remain an untapped group of potential donors as they start to turn 40 in 2020 and 2021.

7. Sustainers turn small donors into major gifts.

Most sustainer gifts fall under the small donor category, and in 2018 the average monthly gift was $52. However, you shouldn’t think of this donor as only giving $52 but $624, their total for the year. Since sustainer programs primarily operate through your CRM or online donation program, these gifts are commitments and should be viewed by their annual totals.

Most importantly, your monthly donors should be acknowledged and appreciated in terms of their annual giving. If someone contributes $100 or $200 per month, are they getting the same recognition as someone who writes a check for $1,200 or $2,400?

8. Sustainers free up future event revenue.

Eventually, it will be safe to hold fundraising events again. If your organization uses this time to build up sustainer giving programs, those stable funding sources may replace or reduce the dependency on event revenue.

While charity events are usually popular with board members and often become community traditions, funding can fluctuate from year to year. Sponsors may drop out, rain may delay or cancel your event, and unforeseen costs might lower the ROI. Event planning is also labor-intensive and can place additional burdens on overworked staff members.

As your organization becomes less dependent on the annual golf tournament or gala, you can shift your focus away from ticket sales or hunting for sponsors. When event revenue isn’t essential for survival, it can fund new programs or expansions, increase endowments, or build up rainy day funds.

While the shift from events to sustained giving may be challenging now, these programs will provide long-term stability to your organization. In the future, your sustainers may continue to give regularly in addition to buying future event tickets.

Learn more about Julep.