The Nonprofit Stewardship Cycle
By: Ilan MannApril 20, 2020
Just as customer engagement is becoming an increasingly important metric for profit-driven businesses, donor stewardship is playing a larger role than ever in nonprofit management.
According to the Association of Fundraising Professionals report, the donor retention rate in the US was 45.1%. That means that in the US, at least, you are more likely to lose a donor than not, and in Canada you have roughly a 50/50 chance.
It gets worse: that 45.1% is a mix of new and returning donors. New donors return at an average rate of only 20.3%
But according to the same report, if you can manage to get a donor to give a second time, and become a repeat donor, the average annual retention rate for repeat donors is 61.3%, more than 3 times the new donor rate.
So that’s the “why” in a nutshell. Let’s discuss the “how.”
The first piece of advice that we always give to our non-profit clients is to be in touch regularly, between asks. We call this the non-profit stewardship cycle. A good rule of thumb is three communications between asks. The most effective feedback loop that we’ve seen looks something like this:
- 1st Ask
- Thank you
- Communication with the focus on them
- Communication with the focus on the organization
- 2nd ask
Probably the most consistent advice we give our clients is to avoid the temptation to “ask when you’re not asking.” That means throwing in a P.S. with an ask in a holiday card, slipping a donation reply coupon and return envelope into a birthday greeting, or – and this is the most egregious – including an ask in a thank-you card.
The temptation is completely understandable; nonprofit fundraisers are just that – raisers of funds. They are judged by their superiors based on metrics relating to dollars and cents, and don’t get bonus point on their quarterly reviews for giving donors warm fuzzy feelings; but they really, really should!
Those warm fuzzy feelings turn into happy donors, who turn into recurring donors (3 times more likely to donate year after year!)
With the big “don’t” out of the way, let’s break down the non-profit stewardship cycle:
The first ask
Like in any ask, you want to follow best practices (some of which we’ve written about in other posts, and some of which we will continue to explore in future posts).
That means making sure the ask is specific, relevant, timely, segmented, and sincere.
Make it a personal ask, at the right and relevant time, to the right person, for the right reason.
Fail to treat each and every donor as an important individual, and you are already on your way to losing them; they may make the donation, but they won’t feel as good about it as they should.
The Thank You
Any donors gift should be immediately followed with a (handwritten, obviously) thank-you card. If I need to convince you that that’s true, you may be on the wrong website.
Don’t wait to send these out – strike while the iron is hot and the donor is feeling good about their gift, and make them feel even better.
Don’t send a boilerplate and insincere thank you.
With Postalgia you can easily swap in variables like the gift amount, the specific cause or project that the donor has donated to, etc… take advantage of this feature and make the card personal and intimate.
Use a specific person’s name on the card – don’t just sign off “on behalf of the entire team.” Include a name, phone number, email address, and invite the recipient to get in touch any time. You’ll be amazed how many use this as an avenue to give again, to sign up for a recurring gift, to get involved as a volunteer, etc… without you having to ask them.
Communication with the focus on them
It should surprise absolutely no one to learn that people feel compelled to give not only to organizations that they feel are important, but also to organizations to which they feel they are important.
The idea that someone at the organization knows who I am, cares about me, and will notice if I don’t give is a huge reason why donors become repeat donors.
Ideally 1 – 2 months after their gift and the thank-you card that should have followed it within 10 days, you should find an excuse to get in touch with them and talk about them!
Examples include a holiday card (there are holidays worth mailing about every quarter) or a birthday card
Communication with the focus on the Organization
This is also known as an impact mailer.
We have seen clients flip this communication with the last one, because timing worked out better with scheduling holiday mailers.
The impact mailer can be sent out any time, but it is often effective to send it out last before the next ask.
This mailer can include a newsletter, a project update, or photographs and press clippings, but it should definitely include a personal note about the impact that their gift has had.
Go ahead and include a press clipping about the ribbon cutting for the new pediatric wing of your hospital, but make sure that you point out that their $250 gift in February helped to pay for one of the state of the art operating rooms that has already helped to save the lives of over 100 children in our community (the bolded words are variables that can be easily swapped in from your database or CRM).
This is a great final opportunity to say “thank you” before the next time you say “please.”
The 2nd ask
If your organization that does a quarterly solicitation, ask yourself which of the following two scenarios you would prefer as a donor:
Scenario One: You receive a solicitation on March 1st. You make a donation on March 15th. You hear nothing from the organization until you receive another solicitation on June 1st. Didn’t you just give? Don’t these guys ever let up?
Scenario Two: You receive a solicitation on March 1st. You make a donation on March 15th. You get a thank-you card from Sally on March 25th. You get an Easter card on April 12th, again from Sally, wishing you and your kids a happy Easter. You get a newsletter on May 10th, with a note from Sally, thanking you for your specific contribution to the good work that they’re doing. You get another solicitation on June 1st.
It should be obvious to you that Scenario two is going to result in a higher retention rate, happier and more engaged donors, and larger gift amounts.
Make your second ask distinct i from the first – that is to say either ask for a contribution towards a new project or goal, or as a follow-up to increase the impact and finish the work of the original ask. Do not simply ask for the same thing again for the same reason.
Reference their past generosity – don’t just treat them like a first time donor, you are in the process of building a relationship, they must believe that you know who they are and care whether or not they are giving.
Finally, consider a latency period between asks. That is to say that if a donor has donated twice in one calendar year, it may be a good idea to not ask them to donate again that year, or at least to take a quarter off. Continue to send them the non-solicitation communications, but avoid donor fatigue and burnout.
Mastering donor stewardship is arguably even more important than mastering donor acquisition – your recurring donors are the foundation of your charity, nonprofit, or advocacy organization.
As the girl guides are fond of reminding us: “Make new friends, but keep the old; one is silver, and the other is gold. ”
Want to level up your direct mail? Contact us.