(I wrote this article on donor management quite some time ago on request, but it was never picked up and published – so now I’m sharing it with all of you!)
Donor retention hinges on knowing who your donors are, communicating to them consistently, creatively, and personally, involving them in the organization’s work, and, most importantly, having a systematic plan for donor management.
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As an Executive Director or Director of Development, you know who your large donors are. In fact, you were probably responsible for their involvement with the organization. You intentionally cultivated relationships with them, and you made sure to personally acknowledge their gifts. Most likely, you still communicate with them on a regular basis to tell them how their donations have made a difference in support of your organization’s mission, and you recognize them whenever you have the chance.
Because of how much time and effort you put into cultivating and retaining your larger donors, you probably think you don’t have the ability to maintain relationships with all your donors – especially the smaller and new donors. But guess what – you can! And, if you do, you will see improved long-term results for your organization.
New donors have great potential for giving.
How many of your donors are actively engaged in supporting your organization? Research shows that nonprofits in the United States, on average, lose over 70% of first-time donors. Seventy percent! That’s huge.
A primary focus of any donor relation program should be to turn first-time givers into lifetime supporters. Think of how much money your organization is losing when you lose a donor. You’re not just losing the amount of the donation, but you’re missing continued donations, year after year, with the potential for the donation amount to increase as the donor becomes more engaged with the organization. You also lose the potential for this donor to introduce other potential donors to the organization. For these reasons, even a small change in donor retention can multiply the value of your current donors.
Think about your last fundraising event. Do you know how many people attended and who they are (including guests using sponsored tickets)? What about who bought raffle tickets or bid on silent auction items? Were there people attending who have never been to one of your events before?
Tip # 1: Make sure you know who all your donors are!
It takes a lot of effort from staff and volunteers to put on a successful event, so you should take every opportunity to leverage these events to develop long-term donors. I recently read an article sharing the research that over 20% of donors were never thanked for their gift. This is not a mistake your organization can afford to make! You don’t want to overlook someone who supported your organization in any way. Once they are gone, it is extremely difficult to get them back. If you engage them right away, they are more likely to stay involved and there is the potential for greater involvement.
Stewardship should not be an afterthought.
One of the most important parts of donor retention is keeping donors engaged after they have made a contribution. Called stewardship, this is how your organization develops lasting relationship with your donors to show them how their support has made a difference. Effective stewardship requires ongoing, meaningful communication with your donors.
Tip # 2: Communicate with your donors on a consistent basis!
In order to maintain and strengthen relationships with your donors, it is essential to stay in contact with them. You want to thank them immediately after their donation, but you also want to let them know throughout the year how their gifts are making a difference for your organization. The worst thing that can happen is for your organization to make an ask to a donor you haven’t communicated with since the last donation. Yet, frequently this happens. At minimum, you should be interacting with your donors on a monthly basis.
Tip # 3: Customize your communication using different methods!
Your communications strategy should be designed to draw donors in so they have a deeper connection to your organization. In your communications, you want to celebrate the organization’s success and demonstrate how the donor was instrumental in making it happen. Once donors see the value in their gifts, they will be more likely to want to support your organization in the future. You can do this by using creative communication methods and customizing your message to target specific donors.
For example, utilize a mix of methods in addition to email and phone calls, such as newsletters, videos, your website, non-fundraising events, and social media. Innovation and creativity are key here. Also, provide information to your donors based on their specific interests rather than sending all of your donors the same communications. Finally, send personalized messages to individual donors to recognize things that are important to them. An example – it was my birthday a few weeks ago, and I was touched by the organizations that sent me a recognition email or card. These things make a difference!
Tip # 4: Invite your donors to get involved in other ways!
Most of your donors support your organization because they care about your organization’s mission. Many of them would be willing to support your organization in other ways if they were asked. Ask donors for suggestions about what your organization could do better. Give them the chance to share their feedback. Offer opportunities for them to volunteer or serve on committees. If they are interested, you have just engaged them at a higher level, increasing the likelihood they will continue to give and even give at higher levels. Even if they aren’t interested in getting more involved, they will still appreciate that you value them for more than their checkbooks and this will strengthen your relationship with them.
A systematic method for stewardship is essential.
Your organization probably does some of the things listed above. But think how much more effective you organization could be if you were doing all of these things! I know it seems overwhelming, but it is possible to manage all your donors in a personal way. In order to make the most of your stewardship program, you need an established structure and plan.
Tip # 5: Have a Plan!
Most nonprofit organizations develop their donor management system in pieces as different needs arise rather than looking at donor management in a more comprehensive manner. Smaller organizations can operate this way, but there comes a point when Excel or Access just can’t do everything you need it to do. And there is a great danger to trusting your donor information to one file, one person, or one computer. I’ve personally seen an organization that kept donor information in a spreadsheet lose this information when one person accessed the file from the shared drive and incorrectly made changes. Although the information was backed up weekly, no one knew at what point the information had been altered, so it was impossible to fully retrieve the correct records. What a disaster!
The question you should ask yourself is: Does your current donor management system meet all your needs? If not, now is the time to make a change.
Donor management software can make a big difference in your organization’s ability to raise funds.
You probably recognize that you need to know more about your donors and to be able to access this information quickly and easily. You need a way to collect important information about you donors (and prospective donors) and analyze this data so you can personalize your outreach to them. You should have a system that helps you work more effectively and efficiently. The right donor management software can allow you to do these things.
Aside from simply tracking information about your donors and recording their involvement with your organization, donor management software allows you to create targeted lists, customize your communications, and track responses to your campaigns. You can easily pull donor summaries, including giving activity and involvement with the organization, and you can also track pledges, matching gifts, and progress toward fundraising goals.
The bottom line: EVERY donor is valuable.
What difference would it make to your organization to increase your donor retention by even 10%?
It’s well known in the corporate world that it costs more to recruit a new customer than it does to retain a current one. Think of how much time, money, and effort you spend cultivating new donors. You don’t want to lose them after they give just once! Every donor is valuable to your organization, and your donor management system should be designed to retain as many donors as possible.
Jene Kapela, Ed.D.
Jené is the President and Founder of Kapela Leadership Solutions, a consulting firm specializing in employee training and organizational development. Visit the website at http://www.kapelaleadershipsolutions.com or follow on Facebook at https://www.facebook.com/JeneKapelaLeadershipSolutions.