Recurring Revenue Strategies for Nonprofits

Introduction

• Recurring revenue is a valuable asset for nonprofits.
• Key benefits include predictable funding for budgeting and planning.
• Not many nonprofits fully utilize recurring revenue.
• Presentation by Amber Melanie Smith, nonprofit founder.

Recurring Revenue Streams

Amber discusses four main strategies and one bonus strategy:

1. Monthly Giving Programs

• Encourage donors to make regular monthly donations.
• Example: St. Jude Children's Research Hospital's "Partners in Hope."
• Steps to Implement:
  • Set up a mechanism for monthly donations via donation software forms.
  • Create a compelling campaign with clear messaging.
  • Recognize long-term donors for their contributions.
• Challenges:
  • Donor fatigue.
  • Potential decrease in larger one-time donations.
• Estimated Revenue:
  • With a mailing list of 1,000 subscribers and 5-10% conversion.
  • Monthly revenue: $1,250 to $2,500.
  • Annual revenue: $15,000 to $30,000.

2. Membership or Subscription-Based Programs

• Similar to monthly giving but offers specific benefits.
• Example: National Audubon Society offers magazines, event discounts.
• Steps to Implement:
  • Determine value-added offerings that align with donors' interests.
  • Consider a tiered subscription system.
• Challenges:
  • Subscriber fatigue.
  • Ensure alignment with organization's mission to avoid tax penalties.
• Estimated Revenue:
  • Conversion rate of 3-7% from 1,000 subscribers.
  • Monthly revenue: $300 to $3,500.
  • Annual revenue: $3,000 to $40,000.

3. Fees for Service

• Charge fees for services or programs offered.
• Example: American Red Cross charges for CPR training.
• Steps to Implement:
  • Assess mission-aligned services to monetize.
  • Develop a plan targeting people who can afford to pay.
• Challenges:
  • Competition from similar services.
• Estimated Revenue:
  • 2-5% conversion from 1,000 subscribers.
  • Revenue: $2,000 to $25,000.

4. Recurring Fundraising Events

• Manageable, easy-to-run events.
• Example: Alzheimer's Association's Walk to End Alzheimer's.
• Steps to Implement:
  • Decide on a manageable event format.
  • Consider small, low-cost events with regular themes.
• Challenges:
  • Audience fatigue.
• Estimated Revenue:
  • Based on attendance and ticket pricing, revenues can vary.

Bonus Strategy: Investment Income

• An advanced strategy requiring initial capital.
• Example: Ford Foundation uses an endowment.
• Steps to Implement:
  • Develop an investment policy with board approval.
  • Invest in high-yield savings or income-generating assets.
• Challenges:
  • Possible financial loss.
• Estimated Revenue:
  • With $50,000 to $100,000 investment, generate $2,000 to $7,000 annually.

Final Thoughts

• Combining strategies may lead to audience fatigue.
• Growing mailing list is key for increasing conversion rates.
• Encouragement to explore these strategies and share experiences.

Additional Resources

• Subscribe to Amber's newsletter, "Changemaker Mondays."
• Explore Amber's other resources: YouTube channel, Facebook group "Change the World or Bust."