Nonprofit Stewardship: Why It’s Important

INTRODUCTION

Donor retention is an ongoing campaign, and stewardship is the most important tool to be successful. Major donors have a higher retention rate than small donors. According to FundraisingReportCard.com, donors who give less than $100 have a retention rate of 19.1% and donors who give $1000-$5000 have a retention rate of 31.46%. Many non profits mistakenly think that this is confirmation that they should focus their resources on stewardship of major donors. When in fact they have the cause and effect reversed; the lack of stewardship of small donors is the very reason they have such a high churn rate. The high retention rate among major gifts donors is proof that stewardship works. If non profits were to steward all of their donors at the level they steward their major donors they should expect to see similarly high retention rates across segments often resulting in millions of extra dollars raised.

Key Topics

1. What is Stewardship?

2. What are the Goals of Stewardship?

3. How does Stewardship help with Donor Retention?

4. How do you Create a Stewardship Program?

5. What are Some Examples of Good Stewardship?

Nonprofit stewardship why its important

1. What is Stewardship?

The objective of nonprofit stewardship is to nurture your relationship with donors and community members and the goal is to maintain good retention rates across giving segments. Stewardship is how nonprofits reach out and stay connected to patrons. Behind the scenes, stewardship involves collecting donor data, storing it within a CRM, and establishing a robust donor segmentation system. From the supporter’s perspective it involves many touch points reminding donors about the impact that they’re having, expressing gratitude in a meaningful way, as well as introducing them to the lives that they are touching while supporting the cause.

thanks! notecard

2. What are the Goals of Stewardship

To practice good stewardship requires keeping donors informed about the allocation of their donations and giving them satisfaction that funding is being used effectively and efficiently. Following up with a thank you message after donations is an excellent way to show gratitude. Showing gratitude is one of the cornerstones of developing relationships with donors. Stewardship is never ending and should always be in the process of being improved.

hands holding heart

3. How does Stewardship help with Donor Retention?

Stewardship is key to retaining donors. Retaining donors is also more cost efficient than gaining new donors. Stewardship takes time, money, and effort but it is worth it. Nurturing relationships with your big as well as your small donors is important. FreeWill.com uses a pyramid to represent the levels of donors, and you can use it as a visual tool to guide your stewardship decisions. At the base of the pyramid (you can think of this as the foundation) are occasional donors, volunteers, and others who help in your community. This level of participants is essential for your nonprofit to work day to day, so stewardship is very important. In the middle are recurring and annual donors, which is where a large portion of your funding comes from. Then at the top are major gift and planned gift donors, which we mention above could have a high return rate. Use this analogy of donors to base where and how much you invest your stewardship.

Donor Pyramid

Another framework is the activist ladder which employs stewardship to elevate volunteers into occasional givers, occasional givers into recurring donors, and recurring donors into major gift givers.

Activist Ladder

4. How do you Create a Stewardship Program?

Stewardship is a strategy, so you need to plan a program. Build a robust stewarding team with these key roles: Director of donor relations,  Stewardship officer, Relationship manager. With a strong team performing the shared duties of stewardship, a lot can be accomplished.

Organize your donor data into a CRM system to implement donor segmentation, so you can approach your interactions with members with authenticity. With an organized system of your donors information, you can enforce a system that thanks donors when they give a gift. Keeping the donor pyramid in mind, stewardship efforts can be based on need and the gift size.

 

Highlight donor recognition. Show gratitude. Make your people feel a part of your organization:

  • Curate a portal on your organization’s website that acts as a donor appreciation page that gives members the option to show that they have donated when they contribute to the cause.
  • Make sure to refer to donors by their preferred named via their preferred method of communication (eg. phone, mail, email, etc).
  • Aim to stay in contact with all donors, even inactive donors.
  • Plan to run campaigns that focus on your mission and how donors take part in the cause

Set goals that are achievable. There are a few points to aim for in your stewardship program: 

  • Retaining a certain number of new donors based on a specific campaign
  • Receiving bigger donations from a specific section of donors
  • Having a increased response rate on account of your program

Setting goals are a great incentive for your team to work towards and are also a way of making improvements to your strategy. You can learn a lot from the results and you can change your strategy as you go.

Stewardship relies on communication, so your stewarding team should organize a communication strategy. This strategy should cover when you will contact donors, plan the contents of each communication piece, communicate upcoming events, letting members know about volunteer opportunities, provide concise and well organized program information, and present relevant stories of people who are part of your organization. All donors are important and need different kinds of engagement, so plan to have a specific strategy for lapsed donors.

Stewardship Mail Package

5. What are Some Examples of Good Stewardship?

Stewardship is a category of communication. To reiterate, stewardship is about nurturing relationships and maintaining donors. It is like a conversation, you are just trying to stay connected and have wholesome interactions with donors. Stay away from asking for donations and remain on the side of gratitude. You can gain authenticity by sending handwritten letters. In a previous article: 10 pieces of mail to send each year, we have highlighted below examples of stewardship mail.

 

Stewardship Letter: You would send a stewardship letter to them after they have donated, to keep them informed about how their gift is being used. It often includes an impact report, newsletter or other information.

Thank you Card: You should include in your thank you card: A personalized thank you message, an appealing design, a handwritten note, a signature from a real person, and contact information.You should not include an ask of any kind. This is an opportunity to show gratitude and strengthen the relationship between your donor and your brand, not to ask for more money (though don’t be surprised if your thank you note generates a second gift).

Impact report: The purpose of impact reports (which can sometimes take the form of annual reports, quarterly reports, etc…), are to communicate the progress made helping the people or advancing the cause that your organization is supporting.

Lapsed Donor Letter: Remember that inactive donors don’t think of themselves as inactive, they see themselves as having previously donated to the cause. Simply the act of reminding them that their support is needed can be enough to reactivate a critical mass of your lapsed donors. Others may require reasons as to why they should give, and why now. Be sure to include urgency in your lapsed donor appeal, as well as specifics.

Donor Anniversary Card: A donor anniversary card celebrates a past gift, which has the simultaneous effect of promoting gratitude – like a thank you card – and reminding donors that their support is needed – like a lapsed donor letter. One of the reasons that these cards are so effective is that people tend to behave seasonally, and whatever triggered their generosity at this time last year is likely to do so again this year. The focus should be on celebrating your donor for their past gift, while thanking them for their implied future support.

 

CONCLUSION

Stewardship is about sustaining your relationship with all your donors. Each type of donor plays an important role in supporting your nonprofit organization. Continually investing in and improving your stewardship efforts will have an outsized impact on engagement as well as impact.

Traditionally, stewardship has required a large investment of resources and time, which has made it difficult for smaller organizations and leaner teams to extend good stewardship past a few large donors.

Postalgia strongly believes in giving the major gifts experience to ALL donors employing personalized handwritten mail, which has been shown to re-engage lapsed donors, increase retention rates, and increase gift amounts. Contact us today to discuss your next mail campaign.

Want to level up your direct mail? Contact us.

The 10 Direct Mail Pieces That Should be in Your Nonprofit Marketing Plan

INTRODUCTION

When putting together the fundraising and stewardship parts of your nonprofit marketing plan consider these 10 pieces of mail. Direct mail is the guaranteed best way to get your donor’s attention. Our clients have seen these pieces increase fundraising and retention rates! A significant feature of our handwritten direct mail is its customizability, allowing personalized authentic communication with members of your community.

According to Nonprofitpro.com, email response rates are extremely low. So low that they don’t even reach 1%. On average the email response rate is 0.1%, online display marketing is 0.2%, and paid search is 0.6%. Direct mail has a higher response rate average of 5.3%, while handwritten direct mail campaigns push that response rate even higher. The overall direct mail impact can be even higher than the response rates imply, as direct mail can also increase online giving.

The 10 Direct Mail Pieces

1. Solicitation Newsletter

2. Event Invitation

3. Stewardship Newsletter

4. Holiday Cards

5. Impact Report

6. Thank You Cards

7. Pledge Card With Reply Envelope

8. Lapsed Donor Letter

9. Donor Anniversary Card

10. End of Year Report

Nonprofit mail marketing plan

1. Solicitation Newsletter

Solicitation Letter

The solicitation letter requests donations, contributions, or volunteers from the recipient. This letter is properly addressed to the addressee, clearly states who or which organization it is from, then goes into detail about the purpose of this solicitation and how the recipient can take action. This letter acts as a vehicle to describe the “ask” , such as the upcoming fundraising event. The fundraising event details that should be mentioned are, the name of the event, the purpose, who is sponsoring the event, the date, the venue, and any other important details. Always ensure to include details on how the recipient can be a part of the event or ways to donate to the cause.

Here is a solicitation newsletter format:

  1. Organization name and address
  2. Date
  3. Name and address of recipient
  4. Salutation (Dear Salutation, )
  5. First paragraph: introduce your organization and summarize your mission
  6. Second Paragraph: state the details of the fundraising event
  7. Third paragraph: request an ask in the form of: attendance to event, donation, volunteers
  8. Fourth paragraph: Let them know you are open to being contacted and include contact information
  9. Fifth paragraph: Express gratitude in advance
  10. Complimentary close (Warm Regards,)
  11. Handwritten signature above your name
  12. PS. message (optional, but encouraged)

 

2. Event Invitation

Event

An event invitation can be paired with your solicitation letter if the contents of the letter talks about an upcoming event. Take care to have an eye catching design that is easy to read and accessible (Clear Print Accessibility Guide).

What to include in your invitation:

  1. Name of event
  2. Date and time
  3. Location
  4. RSVP details
  5. Your organization’s name
  6. Any sponsors
  7. Key event details
  8. Any other important information
  9. Contact information

 

3. Stewardship Newsletter

Stewardship Letter

Stewardship is about building the relationship you have with donors and maintaining open communication. You would send a stewardship letter to them after they have donated, to keep them informed about how their gift is being used. By being transparent about the allocation of funds, it allows donors to feel more involved and connected to your organization. Your goal is to provide them with reassurance that their gift is making an impact and meets their expectations and intentions.

 

Here is a stewardship newsletter format:

  1. Organization name and address
  2. Date
  3. Name and address of recipient
  4. Salutation (Dear Salutation, )
  5. First paragraph: Mention how you have received their gift, the gift amount, express organization’s gratitude
  6. Second paragraph: Quick summary of mission statement, explain how funds will/have been used
  7. Third paragraph:  Authentic statement of gratitude (1-2 sentences)
  8. Fourth paragraph: Let them know you are open to being contacted and include contact information
  9. Complimentary close (Thank You,)
  10. Handwritten signature above your name
  11. PS. message (optional, but encouraged)

*Important Tip: Never ask for donations in your stewardship endeavours.

4. Holiday Cards

Holiday Card Yellow

Holiday cards are at the top of the list of most important pieces of mail to send out each year. According to nonprofitssource.com, their 2023 charitable giving statistics report, shows that 30% of giving happens in December. So make sure to be on schedule and create beautifully designed cards that your recipients would want to put on display. Add the personal detail of curating handwritten messages. Be clear on how they can give, whether that be via digital platforms or filling out a pledge card.

 

5. Impact Report

Impact Report

The purpose of impact reports (also known as annual reports), are to communicate the progress made helping the people your organization is supporting. According to a case study by Katie Boswell and Sarah Handley from thinknpc.org, there are 5 areas you should include in your impact report: need, activities, outcomes, evidence, and lessons learnt.

Need: What are the problems your organization is trying to make an impact on?

Activities: How is your organization addressing these problems?

Outcomes: What progress have these activities made on the problems?

Evidence: What evidence do you have to show you have made an impact?

Lessons learned: How/what can you improve in the future?

Impact reports can take many forms from a folded booklet to a one page piece. To ensure your recipients are reading the report, make sure you are designing it in a way that catches their attention.

 

Here are some tips for the design:

  1. Be consistent with your organizations brand guidelines
  2. Write your report with intention
  3. Make sure the typography is accessible (Clear Print Accessibility Guide)
  4. Include eye catching imagery
  5. Include a contact information sections
  6. Include a way to donate section

 

6. Thank you Cards

Thank You Card Yellow

Thank you cards are an essential part of good stewardship practices. The bottom line is, when you receive a donation, a thank you message should be sent back. Some helpful tips to consider when writing a thank you card, personalized thank you message, no donation ask, appealing design, make it handwritten, include a signature, and contact information. The structure of a thank you card is similar to a thank you letter, the difference is this one is condensed.

 

Here is a thank you card format:

  1. Salutation (Dear Salutation, )
  2. First paragraph: Acknowledge how you have received their gift, the gift amount, express organization’s gratitude (1-2 sentences)
  3. Second paragraph: Quick summary of mission statement, explain how funds will/have been used (1-2 sentences)
  4. Third paragraph:  Another authentic statement of gratitude (1 sentence)
  5. Complimentary close (Warm Regards, )
  6. Handwritten signature above your name

 

7. Pledge Card With Reply Envelope

Pledge Card Reply Envelope Blue

Those who work in the nonprofit sector are no stranger to pledge cards and return/reply envelopes. They are a great way to secure consistent, long-term commitments from donors. Pledge cards are also a great way to collect your donors information for donor segmentation. The standard sections to fill out include: first and last name, email address, phone number, home address, and pledge amounts. It is also a good idea to have a section that summarizes your mission statement and how giving impacts the cause.

 

8. Lapsed Donor Letter

make a change

There is the constant struggle to prevent lapsed donors, and sending out personalized lapsed donor letters is good stewardship practice. The type of language you use is important when you communicate with lapsed donors. Remember that inactive donors don’t think of themselves as inactive, they see themselves as having previously donated to the cause. Even if they only donated one time, take the opportunity to highlight that and use encouraging words. Make sure to stay away from language which might make them feel guilty and set a positive tone.

 

Here is a lapsed donor letter format:

  1. Organization name and address
  2. Date
  3. Name and address of recipient
  4. Salutation (Dear Salutation, )
  5. First paragraph: Mention that you consider them part of the community and they have donated in the past, express gratitude
  6. Second paragraph: Summarize your mission statement and explain that help is still needed
  7. Third paragraph: Provide ways to donate or participate in the community
  8. Fourth paragraph: express gratitude again
  9. Complimentary close (Thank you again, )
  10. Handwritten signature above your name
  11. PS. message (optional, but encouraged)

 

9. Donor Anniversary Card

volunteers like donors

 

A donor anniversary card is similar to a lapsed donor letter. It has the same intentions; the difference is that the contents of this card is like a condensed version of the lapsed letter. This option is a less intense way to practice inactive donor stewardship. It also feels more personal, especially if there are personalized details like the message being handwritten.

 

Here is a donor anniversary card format:

  1. Salutation (Dear Salutation, )
  2. First paragraph: Mention that you consider them part of the community and they have donated in the past, express gratitude (1-2 sentences)
  3. Second paragraph: Quick summary of  your mission statement and explain that help is still needed (1-2 sentences)
  4. Third paragraph:  Provide ways to donate  (1 sentence)
  5. Complimentary close (Warm Regards, )
  6. Handwritten signature above your name

 

10. End of Year Report

sticky notes plan end of the year

The end of year report is similar to the impact report, in that it is communicating the progress made toward the cause wrapped up and summarized. This report can be sent out at the end of the year, or in the early new year. You can follow the same touch-points that were mentioned above: need, activities, outcomes, evidence, and lessons learned.

Here are some tips for the design:

1. Be consistent with your organizations brand guidelines

2. Write your report with intention

3. Make sure the typography is accessible (Clear Print Accessibility Guide)

4. Include eye catching imagery

5. Include a contact information sections

6. Include a way to donate section

CONCLUSION

This article provided 10 pieces of direct mail with their accompanying descriptions. We also provided tools to get a preliminary start to creating these pieces, so you can add them to your annual direct mail strategy.

Want to level up your direct mail? Contact us.

Prevent Lapsed Donors

Article Highlights:

Pay attention to you donor retention

Invest in stewardship

Implement a donor segmentation system

Focus on your annual fund strategy

 

 

INTRODUCTION

Those who work in the nonprofit sector know that donor retention is an ongoing obstacle. As retention rates continue to plummet, lapsed donor prevention efforts are a top priority.

Referencing the 2022 Quarterly Fundraising Report, “Retention is expected to decrease by -3.1% year-over-year, following last year’s -7.4% decrease…Year-to-date retention of donors from last year stands at 29.9% in Q3” (givingtuesday.org, pg. 11).

Infographic-01

Pay attention to you donor retention

To calculate your donor retention, use the formula below! Donor retention is tough, but the good news is that it is easier to maintain repeat donors than it is to find new donors. With attention to the details and hard-work, you will be able to have your donors keep coming back. According to NeonOne.com, if you can improve your donor retention by 10%, you can reach up to a 200% increase in projected incoming donations.

Infographic-03

Invest in stewardship

Investing in something requires allocating funds and also devoting your time and effort. In the nonprofit sector, stewardship is everything. It is key to building strong relationships and making donors feel important and seen. You can do this by showing them how their involvement in your community impacts the people and cause. Be upfront by showing them your successes and your struggles. Hone in on your mission with sincerity and authenticity by taking personal approaches to communication efforts, such as sending send handwritten letters.

Invest Stewardship

Implement a donor segmentation system

We talk about this a lot. We highly encourage an in-depth donor segmentation system. Donor segmentation organizes your donors into groups based on their information, which builds your portfolio of donor data. You can use donor data to plan meaningful experiences and authentic communication between you and donors. By getting to know your donors, you can be strategic with your interactions by providing ways to participate in your community that are relevant to them.

 

It is a give and take as you build relationships. The more you invest in stewardship, the more information you will collect to better understand your constituents’ motivations and interests with your organization. So as your donor data grows, keep it organized in a solid CRM (constituent relationship manager).

 

Focus on your annual fund strategy

An annual fund strategy speaks to all the money that a nonprofit organization raises throughout the year. This fund is the foundation that allows your organization to maintain day to day operations, while running special programs. The annual fund strategy is top priority! Here are your best annual fund strategy practices.

 

Put your team together

Coordinate a dedicated group that’s soul purpose is to organize and implement a plan throughout the year. This is an ongoing process. It is good to build a team that has at least 2-3 people, so that all jobs do not fall on one person. The various responsibilities on the team are: prospect research, fundraising events, community member outreach, and direct asks coordinator.

 

Conduct prospect research

Prospect research identifies donors that have the capacity and financial resources to make major gifts. With that information, you can make the decision to focus more stewardship on these donors. Prospect research can also reveal and predict who and how much they will give. Research should be a big step in your strategy.

Here’s what to look for in your research:

A donor’s previous giving history with your nonprofit and other organizations

The donor’s personal background (values, interests, hobbies, etc.)

Wealth indicators (amount given in previous donations, real estate, stock ownership, etc.)

If donor is frequently philanthropically-motivated in other ways (if they frequently volunteer with nonprofits or have served on a board of directors)

 

Invest in fundraising software

You will need a robust system of tools to collect your research. It is important to build an online platform that is curated for community members to donate to, which ties into ensuring that your mobile giving interface is optimized. Social media upkeep is a big job and requires a lot of time and effort, but done well can be very useful in staying connected to your community. Consider investing in an email and text-to-donate program.

Build a schedule

It is important to stay organized and plan out a schedule of staff and resources for every campaign. If you know exactly what you need, you will have an easier time initiating a campaign instead of pulling things together at the last minute.


Important schedule items:

  1. Campaign start and end dates
  2. Fundraising event dates
  3. Important administrative dates, such as tax deadlines
  4. When each phase of your marketing strategy begins and ends

Plan to show your gratitude to donors, employees, and volunteers

Saying thank you is highly recommended for successful stewardship practices. It shows that you value those who volunteered and donated to your cause. It is also a great opportunity to add authenticity and personality to your communication efforts. This is the way to build relationships. It is as easy as sending a message via phone, email, or a personal handwritten note.

 

KEY TAKEAWAYS

The bottom line for preventing lapsed donors is maintaining or raising your donor retention. We covered important areas for you to consider focusing on to make that happen:

  1. Pay attention to you donor retention
  2. Invest in stewardship
  3. Implement a donor segmentation system
  4. Focus on your Annual Fund Strategy

Want to level up your direct mail? Contact us.