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Home NonprofitNonprofit Management Common Nonprofit Mistakes (And Simple Solutions) Part 7: How I Built A Donor Base Of Sand

Common Nonprofit Mistakes (And Simple Solutions) Part 7: How I Built A Donor Base Of Sand

by Tim Goetz

Miss the beginning of the series? Go to Common Nonprofit Mistakes (And Simple Solutions) Part 1: I Could Do It All, But I Shouldn’t.

Nonprofit leaders often come to me for financial advice because of my background in accounting. Those discussions about money often lead to conversations about ways to increase donations to fund their missions.

I see many nonprofits working hard to bring in new donors, only to be frustrated as their established donors drift away. In fact, 65% of first-time donors don’t make a second donation because their relationships with the organizations weren’t very strong.

Imagine your donor base is made of sand. You can keep adding more new donors through events and outreach, but unless you make an effort to keep building the relationship with your existing donors, the base will start to crumble.

The best advice I can give you is to reverse your thinking. Don’t focus on collecting donations. Focus first on building relationships with new, current, and potential donors. Let’s look at how Molly got a crash course in the value of getting personal with her donors.

Tips for Retaining Nonprofit Donors

Hey, Molly here. In case you are new, I am the director of an animal shelter that recently held a fundraising event that brought in many new donors and raised about $30,000. I had almost forgotten about sending thank you notes to those who participated, but I was able to get my act together and collected a pretty good list of mailing addresses from many of the participants.

Searching for creative ways to thank my donors had me glued to my computer screen. I didn’t want to send out the same generic thank you letter we usually do. I wanted to spice it up. I searched for days, but I couldn’t find anything that was quite right. Not to mention, I couldn’t get over the cost of printing and postage. It was outrageous! We aren’t made of money around here.

Finally, I gave up. Time was ticking, so I asked a volunteer to print and mail the usual form letter. I hadn’t tracked my donations at the event very well and I wasn’t sure who had given, so I thought it would be best to thank everyone who attended for their support.

I planned on making personal calls to my major donors and sponsors, but life caught up to me. First, a bathroom overflowed, meaning wet towels, a scramble to move items off the floor, and calls to the insurance company. Then I realized I needed to get caught up on the volunteer schedule for next month. The last straw was one of our dogs giving birth to a litter of puppies. I had literal puppy dog eyes pulling me away from my desk and asking for cuddles. Needless to say, a couple of weeks flew by and those calls never happened.

I did, however, get a call from my board member, Roland, who said, “I ran into Mike at the hardware store and he wasn’t exactly happy. He gave you a $5,000 check at the event for the facility upgrade and said you mailed him an unsigned thank you letter. He was disappointed and was pretty sure he wasn’t going to donate next time.”

Mike had definitely been on my list of calls that never happened. I began to wonder what other donors might feel unappreciated by my lack of a personal touch. I knew I should have signed the bottom of the letters or not sent that generic letter in the first place.

I wondered if I could salvage the relationships before too much damage was done. I put down my cute puppy, grabbed my contact list, and made separate spreadsheets for each type of donor: new donors, regular donors, and major donors. Then I created a plan to contact each group in a more personal way.

I spent all afternoon calling my major donors, starting with Mike, and I shared a little about the progress on our plans for the facility upgrade. Mike thanked me for calling, but I clearly had a bit more work to do to improve that relationship.

Appreciating Your Donors

Next, I wanted to send the new donors a handwritten card. There were 50 of them, so I knew I didn’t have enough hours in the day to do it myself. I asked a few volunteers to sit down with me and finish writing the rest of the letters. By the end of the day, we had all 50 letters written and ready to send out. We even included a picture of our new puppies.

It was definitely time-consuming to reach out this way, but the responses we received were much more valuable. Several donors sent in additional donations, and one actually sent a handwritten letter back, with a picture of their dog they adopted from our shelter a couple of years ago.

I have to tell you, it was extremely heartwarming and encouraging. I loved getting to know our donors, and I feel like they were working with me to help our organization achieve its mission.

Our shelter was growing and I was stretched thin, but I was grateful that I had volunteers I could count on. Unfortunately, we ran into a snag that put that in question. I’ll fill you in about that story next time.

Nonprofit Best Practices

Create Your Donor Relations Plan

After making the mistake of treating each donor the same, Molly learned the value of approaching her donors in an organized, efficient, and personal way.

Your organization may have 200 donor contacts or you may have 10,000. As your nonprofit grows, you probably won’t be able to personally reach out to every donor. The easiest way to make sure you are building and maintaining relationships with your donors is by dividing them up into groups, such as new donors, recurring donors, potential major donors, and current major donors.

Funnel for Nonprofit Donors

Your plan of communication with each of these groups will vary, and the goal is to build relationships. In doing so, many supporters will feel more connected to your organization and may move to the next level.

For example, if you get a new donor, you may want to make an extra effort to send a handwritten note or ask a board member to call them for a personal thanks. This personal touch can jumpstart that relationship and make them feel like you genuinely appreciate their support.

For donors who give on a regular basis, you should also consistently send thank you letters to them. Monthly notes can include tangible examples of what their donations are helping to accomplish.

For major donors or potential major donors, identify a manageable amount of people you wish to build deeper relationships with based on the amount of time you have available. Then start reaching out to get to know them and their families, as well as their interests and values. This might mean inviting them to dinners or meetings, recognizing them at events, sending handwritten notes, etc.

Keeping It Personal

Your passion and drive for your cause are your biggest assets when you interact with a donor. If you can communicate why you are committed to your cause in each letter, call, or meeting, you will help the donor feel it as well. Sure, sometimes you will have a mail-merge letter or bulk email, but remember to ask yourself, “How can I make this more personal?”

Ideas for Retaining Donors

Getting Board Members Involved

You may be wondering when you are supposed to do all of this note writing, phone calling, and elbow-rubbing. Remember, you don’t have to do it all yourself. Your board members and volunteers can play an important supporting role. If you start delegating tasks, remember to track activity in a database or spreadsheet. Here is some of the information you will want to keep track of:

  • Donor’s contact information
  • The person responsible for managing the contact
  • Communication history and involvement with your organization, such as: attended event, volunteers, responded to last direct mailer with donation, etc.
  • Donor level
  • Donation history (amount and timeline)
  • Next steps for following up

Managing your donor list in a database will help you stay organized and give you knowledge of your donor base. If you aren’t ready to use donor management software, you can download a sample donor list spreadsheet.

Starting With A Simple Thank You

Not sure how to get your donor relations plan moving? Start with a personal acknowledgment of the donations you receive. According to Penelope Burk’s donor-centered research, 80% of donors say they would be inclined to give again if they receive a prompt and personal thank you letter. Here are a few ways to make your donors feel appreciated without having to break your bank:

Tips for Building Donor Relationships

What are some creative ways you acknowledge your donors for their support? Let us know in the comments section below.

Up Next: Part 8

In Part 8, we will look at the importance of having the right people reviewing your financial reports. I will also share how implementing internal controls can catch financial mistakes and help prevent fraud in your nonprofit.

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