by Neha Sandesh
One fuels the future. The other funds the everyday. Learn how combining major gifts and recurring giving strengthens your fundraising strategy.
In today’s unpredictable economic climate, nonprofits are struggling like never before to maintain stable revenue to fuel their missions.
Rising prices, budget cuts, and economic uncertainty have made organizations scramble to maintain a source of stable funding, making it more important now than ever to diversify your fundraising strategy and lean on multiple revenue sources.
Have you heard the phrase “Don’t put all your eggs in one basket?” Not only does this apply to your personal investments, but to your organization’s fundraising strategy as well, and it is critical that you target donors of all giving patterns.
Two key sources of revenue for nonprofits are major gifts and recurring donations. Having a tailored strategy for each will help keep your income flowing, a force that even the most stringent of budget cuts can’t hit!
Why Major Gifts Matter
Major gifts are typically above $5,000 and comprise a smaller set of your donor base. These gifts take time and consistency to cultivate, and show the importance of deep, personal relationship-building with your donors.
If it were as simple as knocking on someone’s door and asking for a donation that could change the trajectory of your organization’s future, then everyone would be doing it, all the time! These relationships, however, are built on time, trust, and a deep alignment with your mission and vision.
But major gifts have the opportunity to fund entire programs or campaigns. A few major gifts can make a world of difference to your operations and your mission, and major donors also have the added impact of bringing visibility and a broader network to your goal – and even planned giving potential.
The Importance of Recurring Donors
Recurring donors, on the other hand, are the bread and butter of your funding.
A loyal donor base that engages frequently with your organization through:
- Content
- Volunteer efforts
- Events
- And most importantly, recurring donations
Keeping these donors constantly engaged and aware of your organization’s mission and key developments is vital for their continued support and contribution to your mission.
Recurring donors have higher retention than one-time donors, and because giving is automated, there’s less friction and less likelihood that they will lapse.
Over time, recurring donors are also more likely to give additional gifts, such as during year-end campaigns, and they have the potential to become major donors in the future. These donors are your financial safety net in which to forecast your income – as long as you keep the foundation steady.
Think of your favorite subscription streaming services, like Netflix. If Netflix stops updating new content or engaging with their viewers over time, subscribers are less likely to renew their subscription in the future.
Similarly, if your organization is not providing your loyal donor base with a steady stream of content, acknowledgements, and information about the impact their donations have, they are less likely to continue their support.
Optimizing Your CRM to Segment Your Donors
If you aren’t using your CRM to segment your donors, then you’re missing a huge opportunity to easily personalize your outreach! Using a CRM to segment your donors based on their giving history and engagement is one of the easiest and most reliable ways to create tailored content that appeals to donors with different giving habits.
For major gift donors, your CRM should be able to track each major donor prospect through these key cultivation stages and assign tasks for your Major Gift Officers to conduct meetings and set up next steps:
- Awareness
- Identification
- Qualification
- Cultivation
- Solicitation
- Stewardship
CharityEngine provides an easy way to guide your donor through the donor journey through opportunities, CharityEngine’s moves management functionality. Opportunities are used to track progress with major donor requests and can help your major gift officers easily view how their major gift ask and relationship with their prospect is coming along.
For recurring donors, there are a variety of ways you can use your CRM to effectively target and maintain this support base:
- Optimize your donation forms and make it as easy as possible to set up a recurring gift.
- Track retention and upgrade triggers, such as when a payment fails, a donor pauses their subscription, when a donor leaves your donation form before completing the payment, etc.
- Create streamlined content, such as a weekly newsletter for your recurring donors to keep them informed of your organization’s happenings, and how their gifts are influencing your mission.
Striking a Key Balance in Fundraising Strategy
Balance is the key to everything – our meals, our habits, and definitely our fundraising strategies. Keeping a close eye on the balance between cultivating relationships with major donors and maintaining consistency with recurring donors will ensure your organization has a steady flow of revenue that can withstand any form of uncertainty.
