Business Strategy

Nonprofits and the Recurring Revenue Problem

Nonprofits – big or small, and regardless of their cause – share a common concern: the recurring revenue problem. For decades, nonprofits have relied on generous families to write annual checks to their organization. Annual dinners and parties have focused on drawing the most possible income to raise their projected budget for the following year or make up for shortfalls from the current year. Donations without a comma struggle to make a dent.

Relying on government funding isn’t a stable solution either. The priorities of the current government administration will always shape federal funding, which can fluctuate or even eliminate government assistance.

Donations, whether business or personal, come from people. People make donations based on their interest in your cause, marketing, and/or personal relationships. As wealth changes hands or becomes scattered throughout a family, reliable annual checks can change or disappear. Continuing to rely on the same, small group of people to fund your organization is never the right long term goal. Building a large network of passionate fans supporting and promoting your organization will pay in droves. In order to build and maintain a large network, your organization needs a software strategy that makes it easy to review your most important data quickly and prioritize your goals.

Growing the network

The good news is there are many opportunities to grow your network of fans. Younger generations have growing interest to be a part of the solution that replaces traditional methods, but they have a different approach. Millennials are interested and active in nonprofits as volunteers and supporters. Small donations from a group of dedicated supporters are more reliable and stable as a long term recurring revenue solution. Those donors also promote their favored nonprofits across social media platforms. There is no better brand awareness than fans pushing your work, your mission, and generating donations for you.

Building recurring revenue online means creating compelling stories and case studies of your team’s work with the cause. Taking advantage of marketing campaigns to position your organization at the right time can really move this needle. The ACLU raised more money online in one weekend than all of 2016 after outrage over the January 27, 2017 immigrant ban. Celebrities and business executives will also match funds for certain causes. Being active on social media, especially Twitter, gives you the advantage of getting in front of the right people at the right time.

Timing is everything. Create consistent content that showcases the impact your work is having on your community. Take advantage of how your mission or your services aligns with the goals of corporations and other nonprofits close to yours. The more you grow your connections and interactions online and in your community, the more you can show your impact.

Many businesses want to give back. Restaurants frequently host social hours to raise money for nonprofits through a percentage of food and drink sold. They aren’t alone. This form of support is also popular at art events, retail shops, and benefit concerts. Give them a reason to frequently point their efforts at your organization.

The role of software

As administrators or full-time professionals at a nonprofit, you have to run the organization like a business to raise the funds needed to push your cause forward. It’s not enough for you to be sold on the nonprofit’s mission and excited to work for the cause everyday. You have to be able to sell prospective donors, build more fans, and continue growing your network. New donor acquisition is important to understand. What drove them to your cause, and why are they passionate about it? How do you keep them engaged online or in person? What does it cost you through marketing or community events to acquire new donors? What’s your retention rate, and how do you improve it?

Software should play a big role in operations, fundraising, and providing a service to the community for nonprofits. Whether you’re balancing your financials online, generating fundraising reports, or automating a service for your cause, software can streamline your organization and make it easier to reach more people.

Make giving easy. Whether it is a one-time or monthly donation, it should be easy on any device to give. Apple Pay and Google Pay, Square, Paypal, or a payment portal from your donor management software are all good options to keep the payment process consistent and easy for any donor. If you can remember the donor, their payment preferences, and which campaign led them to give, it’ll help you further understand their connection to your cause.

To make technology work for your organization, you have to prioritize it in your yearly budget, plan for improvements in advance, and seek grants to help produce creative projects throughout the year.

Utilizing software and social campaigns to grow your donor base and promote your organization is the best way to grow your nonprofit’s awareness and annual budget. It isn’t just about building custom software for every need. It’s about choosing the right software and making sure all of your software communicates well with each other.

Existing tools

Here’s a few donor management software tools worth exploring:


Neon provides easy-to-use online donation forms, automated receipting for donations, donor management and communication, peer-to-peer fundraising tools, and custom executive reports for the organization.


Salsa takes a unique approach of engaging supporters online and providing tools for nonprofits to manage their relationships with their donors.


With GivingFuel, you can create donation pages for your website, implement and review detailed reports, and launch text-to-give campaigns.

Little Green Light

Little Green Light provides an all-in-one solution to donor management that integrates with tools you may already use, such as Paypal, Stripe, Mailchimp, Sendgrid, and more.

Next steps

To start planning the best software strategy, consider what data matters the most to you. The answers to the following questions may be good data points for the organization.

Who are your donors? How much do they give? When and why do they give? How long have they been giving? How often does someone at the organization communicate with them? Do they come to events for the organization? What community do they live in? What services are they most interested in?

What else is important to you? If you know what information you need to run your organization better, you can find or create the best software for you.

Questions? Shoot us a message.

By Emily Hart