Three Genuine Ways to Build Better Relationships with Donors

Lani Hollander, ICG Consulting Specialist - January 13, 2021

The new year is also about adopting better practices. As a nonprofit fundraising professional, why not start with what you are most grateful for - your donors! Adopt these three simple, research-backed practices, and watch your donor relationships - and your bottom line - flourish. 

1. Year-Round Giving is Year-Round Work

Fundraising is year-round work. Whether you are crafting compelling annual appeals, planning events that actually raise money, or working on a cultivation plan for a major donor, ensuring the financial sustainability of your nonprofit is a task that never stops. As soon as we are done sending out our Giving Tuesday appeals, it is time to make next year’s fundraising plan.

2. Retention through Relationship Fundraising

This is why donor retention – the ability to hold onto a donor year after year – is so important. Cold and warm mailings, connecting with prospects at events (more likely online events these days), or making solicitations over the phone take time and resources for any development shop to secure or renew that one donor. Most charities sadly lose 50% of their annual donors between the first and second gift. British fundraising guru Peter Burnett estimated that acquiring new donors costs nonprofits five times as much as reactivating lapsed donors. It pays off – literally – for fundraisers to adopt practices that maximize the opportunity for relationship development that retains donors. Not only does this reduce resources invested in sniffing out new donors, but the longer we build relationships with our donors, the higher we move them up the donor ladder to more impactful gifts.

3. Fundraising Secret Sauce: Acknowledgement, Communication, and Recognition

So what can we fundraisers do to hold on to our beloved donors? One of the most promising approaches to developing donor loyalty, improving donor retention, and building the relationships that yield transformational giving is donor-centered fundraising. The philosophy is the brainchild of fundraiser Penelope Burk, whose affirmation that “communication is the ask” cultivates donors to their next gift through three steps: acknowledgment, communication, and recognition. Combined, these steps improve donor loyalty and increase gift values faster than traditional transactional strategies. Too many nonprofits use transactional approaches to ask, ask, ask without anything in return. These practices not only fail to show our gratitude to our donors but harm you in the long run with low retention rates as donors fail to stick around. 

Let’s break this down.

Acknowledgment: Showing Appreciation for Giving

An acknowledgment is a private affirmation that the donor is appreciated. Think of it as a private thank-you. This first exchange after receiving the gift must be used to inspire future support. Donor-centered acknowledgment is prompt, personal, does not ask for another gift, and catalyzes the donor’s interest in giving again. A phone call (made within 24 hours if possible) is recommended, as is a thank-you letter (sent within 48 hours if possible) that focuses on the donor and what their gift will accomplish, rather than the gift amount itself. For normal-sized gifts, acknowledgment can come from about anyone – a staff, volunteer, or beneficiary. Go the extra mile for major gifts: have your acknowledgment come from “influential” individuals in the organization such as the Executive Director or board member.

Communication: All Killer, No Filler

The next part of your donor-centered strategy is communications. According to Penelope Burk, communication should consist of “meaningful information offered to donors about the not-for-profit’s work and its progress to date, the most important information being real evidence concerning what donors’ contributions are helping achieve”. Communications from your nonprofit’s beneficiaries or program staff are the most powerful in influencing the next gift decision, while communications from fundraising staff are often less impactful. The communications schedule should be driven by the news-worthy events in your nonprofit, rather than some arbitrarily-chosen cycle. Tell stories that stir the emotions, focus on beneficiaries, and talk impact.

Recognition: We Would Like to Publicly Thank You

Finally, be sure to recognize your donors. Unlike the private acknowledgment described earlier, recognition is the public acknowledgment of donors for their contributions. Classic acknowledgment tactics include donor awards, media stories about donors, and publishing an ‘honor roll’ donor list in annual reports or newsletters. Many donors actually prefer being recognized through modest gestures. Paired well with the earlier steps of acknowledgment and communication, donor recognition events can be the catalyst that influences donors to make their next gift. In fact, a survey performed by Burk found that 87% of donors chose to make a gift after attending a recognition event. The key is to place donors in positions where they are “active” in the recognition, rather than passive recognition that is “done to donors”. Case in point: donors placed a higher value on active involvement such as thank-you calls, recognition events, and communications from beneficiaries than they did on passive involvement such as token gifts, plaques, and having their name printed in the annual report.

Wrapping It Up

Fundraising experts and blogs alike (at ImpactCurve Global, we are no exception) are rife with expressions like “we need xyz solution now more than ever”. There is truth to this urgency: while the COVID vaccine may be in sight, nonprofits are going to feel the economic backlash from the pandemic for years to come. Now, more than ever, we need sustainable practices to keep our donors during these challenging times. As your organization moves into the new year, set aside time at an upcoming meeting with your team, leadership, board, and/or volunteers about how you can incorporate the three above practices into your annual fundraising plan. Your donors, your beneficiaries, and your organization will all benefit.

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Want to chat with us on incorporating donor-centered fundraising at your organization? Send us an email – we would love to talk. Also, visit our website to access time-saving templates and resources!