Donor Retention and Recognition

“The donor” is and should be seen as the most important person for any nonprofit organization, period! However, lately donors are treated more like a commodity than a treasured artifact.

How a nonprofit treats their donors will have a significant impact on the organization’s ability to raise money and grow.

As a consultant for nonprofits I see way too often donors that are ignored with no plan in place to make them feel special or needed.

The phrase “you’re my friend” is one of the most touted sayings in political circles, especially when a contribution is being pursued. Likewise, when the salutation, “Dear Friend” or “Dear Supporter,” is used by a nonprofit, that in my opinion is impersonal and in some respects insulting! If you want a contribution you have to start by addressing me by my name and treat me like an individual versus someone in line at the drive thru.

How much do you really know about your donor? Have you taken the time to ask them what they like or even dislike concerning your program? How often do you communicate with your donor and NOT ask for money?

All these questions are just the start to building a retention program that works!

As best as I can tell, there are few free programs or informational pages on the internet that really share the practical secrets to help nonprofits retain donors. So, once again, I’ll try to tackle the subject and give you the information you need, NOW!

Why does a donor stop giving? Over 50% of all donors stop giving because of three simple yet profound reasons.

Approximately 25% of donors stop giving because they find another cause they think is more deserving. This begs the question then is your message on point and are what you are doing and why you are doing it consistent? Does it resonate with donors or are you doing something that people really don’t support? Is what you do effective year round?

Unfortunately over 20% of donors that stop giving simply cannot afford to support charities at that time.

Lastly and most amazing is that over 10% have totally forgotten they supported the charity in the first place. This last point for me further emphasizes the fact that if your nonprofit’s method if getting donations is largely based on simple emotional appeals then eventually the well will run dry and people will literally forget you.

The message your nonprofit gives to donors must be one that is lasting and not just tell of a need but helps truly show that with support they can make things better long term. The ultimate goal would be changing or affecting a life forever.       

So how do you keep donors happy? First a donor needs to feel appreciated, welcomed and wanted. Likewise, most people that give money want to know the results of their actions so they in turn need information. Newsletters and annual reports are fine but those are often ignored.  Nonprofits need to connect with their donors! This connection is a key in the retention of donors and where most nonprofits seem to operate in blissful ignorance.

Nonprofits need to fit in their schedule throughout the year ways to acknowledge their donors both publically and privately. So, what is the most effective way to say thank you?

This is a question that has plagued nonprofits for a very long time. Everyone would like to have the definitive answer as to what works and what does not. Unfortunately, since every donor is different there is no real clear cut answer. Regardless, nonprofits need to make an attempt and buckle down and establish an ongoing program now and not wait until they are doing a capital or planned giving campaign.

What does a plan look like?

A simple approach is to establish a recognition program along with your annual fundraising plan.

First, determine how many times do you want to make contact with your donors and what is the purpose for this contact?

Sidebar: We all have people we know that we only seem to hear from when they need something from us. We know when the phone rings or they show up at our door step it is not for a social visit but for some other alterative motive. You do not want your nonprofit to fall in this category!

For the sake of example let’s say you determine you want to make ten contacts a year to donors that give at a certain level of giving. This might include newsletters, face to face conversations seeking advice, birthday cards and/or special occasion cards like for Thanksgiving as well as sending an actual personalized letter soliciting money to support a specific program area or project.  I am not talking about a mass produced letter but a one on one conversation piece. 

You may also want to consider having a donor appreciation social, dinner or luncheon. The purpose for this event is to say thank you and to give information on how monies were spent wisely and effectively.  Nonprofits may also choose to post a list of donors, unless they wish to remain anonymous, where you offer your program so clients and others can see who supports your cause. Having a newspaper ad thanking donors can also be effective.

Newspaper ads thanking donors are often done after a fundraising event; however, you may find it more effective during Thanksgiving with an ad that might read: In this time of reflection we at X nonprofit want to thank all those who supported us during this year etc. This is helpful especially if you plan on following up with an end of the year ask.

Regardless, in every way possible thank your donors! Mention them everywhere you can. Again, in your newsletter, your annual report, your website, when you stop by to talk thank donors for not just for money but for their advice and valuable time. If you send a card put a hand written note of thanks.

I strongly believe that all nonprofits should consider having at their program location a donor wall system or some display that lists the names of individuals that have contributed to the nonprofit both annually and long term. 

There are dozens of companies that sell these types of systems with a wide array of designs. They also offer high tech digital touch screen displays as well, yet personally I would opt for a higher degree of personalization with a warmer feel. I also like the idea of establishing a walk of fame where you have gift bricks with donors, names.

Some may not see the importance of having this outward display. Regardless, if this is not the approach your nonprofit takes you still need to determine how you’re nonprofit can connect with your donor and determine what is being done to ultimately give credit where credit is due.

In short, choosing to do nothing and ignore your donor is the quickest way to loose them!

DISCLAIMER: This information is not intended to provide legal or accounting advice, or to address specific situations. Please consult with your legal or tax advisor to supplement and verify what you learn here.