The subscription economy certainly boomed during the COVID-19 pandemic, and while the pandemic-fueled growth may have faded, subscription models continue to outperform the broader online economy: in June 2013, Stripe announced that recurring payment volume processed on Stripe is growing 16% faster than one-time payment volume.
The reasoning behind the subscription economy's continued growth as well as the reason why philanthropic organizations should continue to ride this wave of subscription-based services is a result of 3 key benefits of recurring subscriptions:
- Easier Acquisition
- Increased Retention
- The Convenience of upgrading a recurring gift on GiveCampus for both you and your donor.
Easier Acquisition:
The first benefit, easier acquisition, is tied directly to a lower initial ‘ask price’ that results in a larger lifetime gift. Many younger donors feel as if they have not earned enough money to be able to give a significant gift. Recurring giving resolves that tension by allowing those donors to give $5 or $10 monthly gifts, which will accumulate over time to an amount that would otherwise have been out of budget for your donor. For instance, if you have a new donor who can not give $500 but instead opts in to the idea of giving $10 a month over the next 5 years, your $10 donor becomes a $600 donor over the life of the gift as well as being a consistent donor year in and year out.
Think about your last campaign. Now multiply that number by 2.5x; based on an analysis of users on the GiveCampus platform that new number would be the value of those gifts if they were recurring. GiveCampus has made recurring giving easy by adding the option to include recurring gifts on your Social Fundraising Platform and Giving Forms. For more information about adding recurring giving to your campaign click here!
Increased Retention:
In addition to the ease of acquiring new donors, recurring giving also allows you to more easily retain your existing donors who have demonstrated an interest in giving to the institution. The educational fundraising community relies heavily on LYBUNTs and SYBUNTs to segment and solicit inclined donors. Many of these lapsed doors simply forget to make a gift each year, don’t recall the last time they gave, or hit some kind of friction while making a gift. However, for every SYBUNT that you are able to transition into a recurring donor, you will save time and money on expensive donor reacquisition materials and deliver a better experience to your donor.
One idea to keep your LYBUNTs and SYBUNTs giving year-over-year is to create a campaign targeting these audiences; however, instead of allowing one time gifts for this specific campaign you could set the terms of the campaign to require that all gifts are recurring. Make sure to be clear about these terms in your marketing, and you may find that those former LYBUNTs and SYBUNTs are now recurring donors and being stewarded as such. We also recommend you leverage the Smart Appeals for Anniversary Donors, a low-lift way to renew your most loyal donors and capture those who just lapsed.
Convenient Upgrades:
GiveCampus allows you to seamlessly upgrade any recurring subscription easily on the platform - an incredible benefit of this type of gift! Recurring giving allows an opportunity to thoughtfully engage and upgrade recurring donors. By sending a thoughtful upgrade email to those donors who already make recurring gifts you may be able to increase their donation year after year.
Thinking back to the example from earlier with the $10 donor, if you increase their donation by 20% this would change their gift from $10 to $12. This does not seem like a lot of money in a single instance of a single individual, but over a year you would see an additional $24 from this donor and over the course of 5 years an additional $120. Complete this strategy with each of your recurring donors and you could easily add thousands of dollars each year in upgraded donations and your donors will be making gifts they can be proud of having contributed.
You can easily modify a recurring donation on the Recurring Subscription table located in your 'Manage Gift' section of your administrator dashboard. Donors can also easily make this upgrade on their own (but who doesn’t like to have these things done for them with a confirmation email sent afterwards:) For more information about modifying recurring donations click here.
Some recurring giving tips:
- Make recurring donations the default, or if you are really bullish, think about starting a campaign for consistent donors with recurring giving as the only option.
- Continue to meet your donor expectations by maintaining communication and steward them regularly for their recurring gift. Upgrade your donors regularly by 10-20%. Many will absorb the additional increase as long as they understand the additional impact that their donation will have over time and you make it easy and frictionless to increase their giving.
- Customize your recurring giving email templates for an experience that feels tailored. For more information about customizing email templates click HERE.
- In the rare case where GiveCampus is not able to recover a recurring credit card with a new expiration date your donors will be prompted to update credit card or payment information in the system. While in most cases nothing need be done on your end, this presents another opportunity to engage and thank them.