A Quick Guide to Donor Stewardship for Nonprofits

You work hard to bring new donors in for your organization – what happens after they’ve made a contribution?

With donations being the lifeblood of any nonprofit, your work never ends in terms of fundraising and finding new potential donors, but you can maximize your opportunities by engaging in donor stewardship activities. 

The idea is that if you can keep donors coming back, you can reduce some of the pressure that comes from always chasing new one-time donations. Instead, the goal is to create a sustainable pipeline of donations while optimizing your fundraising activities.

Here’s how:

What is donor stewardship?

Donor stewardship is the series of activities fundraisers undertake to retain their donors beyond an initial donation. You could describe it as a relationship-building process – the aim is to help donors feel like they know you well so that they’ll feel comfortable donating to your organization again.

Stewardship involves several different aspects, from managing donations as donors intended them, to updating donors on the impact their gift has had. Your stewardship activities should help to create a connection with the donor so they feel loyal to your organization.

The nonprofits that are most successful with donor stewardship tend to create and work with a stewardship plan. It’s not an easy task – stewardship often requires the efforts of everyone who is on-staff at the nonprofit.  Below are some aspects that usually go into a donor stewardship plan:

Define what stewardship means at your nonprofit

It’s important that everyone in your organization has a shared understanding of donor stewardship as there are many potential definitions of what it means and what goes into it. Stewardship is always about providing excellent care and communication with donors, but what exactly does that look like to you?

For example, here are a few different activities donor stewardship may involve:

• Acknowledging and thanking donors
• Communicating with donors with personalized messaging
• Social media updates and shoutouts
• Annual reports
• Gifts
• Invitations to events

Segment your donors

Donor segmentation is important so that you can send relevant messages to your donors. This is much more effective than treating everyone the same because it’s about getting the right message, to the right people, at the right time. It’s also more manageable for your team so that you can split donors into key groups to manage outreach 

Donor levels usually are a good place to start. If you have limited resources to devote to donor stewardship, it makes sense that you’d give the most personalized attention to those who give regularly and significantly. Building segments around donor levels also allows you to be strategic about approaching donors to move to the next level.

Besides donor levels, you might further break down segments to include factors such as:

• New donors – You’re at the early stages of building a relationship with them so your communications probably sound a bit different compared to how you communicate with regular donors. However, first impressions are key to establishing a strong relationship with your donors from the beginning.
• Loyal donors – These are people who give a small gift regularly. You may want to try to encourage them to increase their gift. One way to do this is sharing the impact that a larger gift may have for the organization.
• Major donors – Donors who have partnered with your organization at a high level. Personalized communication can go a long way with this audience.

Document a plan for stewardship techniques for each segment

A documented plan is always the best strategy so that you diarize which activities you need to do when, and always come prepared for big donor periods, such as Giving Tuesday. Decide what techniques you’re going to use for each level, when they need to be actioned, and who will do what task.

Some examples include:

• Creating volunteer opportunities for donors that help them to be directly in touch with the work you do and better visualize the impact.
• Personalizing gift receipts to include information about specific projects their donation will help.
• Hosting donor appreciation events.
• Sending articles or interesting content to donors about your cause.

Why does donor stewardship matter?

There are a number of reasons why stewardship matters. 

First of all, it’s much more cost effective to keep your current donors than to go out and find new ones. According to donor retention data, nonprofits lose 54% of their donors each year. At the same time, recurring donors give an average of 42% more than one-time donors. Stewardship aims to retain as many donors as possible so that you can maximize donor contributions and avoid being in a cycle of chasing one-time donors.

Secondly, it’s about treating donors with the courtesy they deserve for taking the time to contribute to your organization. Many donors drop off for reasons that are completely preventable. For example, various studies have found poor communication, not being thanked, not knowing how the money was used, and thinking that other causes have a greater need, to be among those reasons. Each of these can be prevented with good communication and a robust stewardship program, starting with thanking donors!

Thirdly, stewardship can not only help you to retain donors but also to attract larger gifts and more donors. Loyal donors will often refer their friends and networks to causes they feel connected to. They may also choose to increase their contribution if the relationship is nurtured well. People want to feel good about who they donate to and stewardship helps to promote those positive feelings.

What are some steps to follow for good donor stewardship?

Here are some steps that can help nonprofits to follow good donor stewardship practices:

Leverage data

We’ve mentioned segmenting your audience and reaching the right people, with the right message, at the right time – in order to do that, you need to leverage reliable data. The more granular you can go, the better the information you have to personalize your messages.

Kindsight’s Multi-Lens Modeling feature allows nonprofits to view donor profiles under multiple settings, depending on what their goals are. Nonprofits can see more information in a more comprehensive way.

Real Time Alerts are another feature that can help. These will alert you to actionable information that allows you to time your outreach according to the intelligence you receive. It will also help you to shape your messaging for a personalized approach – for example, if someone has sold a property or stock, it may be a good time to reach out.”

Tell your story

Storytelling is impactful. It captures people’s imaginations and emotions in a much more powerful way than straight facts and data. Communicate the impact of donations while telling the story of your organization.

For example, while people might understand in theory that 1000 people were impacted by a flood in a town, what will really speak to them is individual stories. They’ll feel for the family that lost their home and for whom their donation has helped to get back on their feet.

Prioritize gratitude

There’s really no excuse for any donor not to be thanked for their gift. Thank you messages should be sent early and often, along with an explanation as to why you appreciate their gift. What is it helping your organization accomplish?

For major donors, you should take extra care to personalize a thank you. For example, some ideas include:

• Have a high-ranking person within your organization call them directly within 24 hours of their gift
• Send them a hand-written card
• Record a personalized thank-you video
• Invite them as a VIP to an important event of yours (board meeting, party, fundraiser, meet and greet, ride along…)
• If you are able to accomplish something with their gift, share that with them

DYK, Kindsight has it’s very own Generative AI tool, built by nonprofit professionals, for nonprofit professionals! Writing a personalized thank you letter with engage is simple! Login and navigate to the Thank you letter prompt.  Describe the program or area of funding your donor contributed to and then add details about the gifts, the impacts, etc.  Like magic, engage creates your first draft in a flash! Edit, deliver, and get responses.

Set clear, measurable goals

How will you know how well your stewardship efforts are working? It’s important to set goals that are achievable and measurable so that you can monitor your progress. Some examples of the sorts of goals a nonprofit might aim for include:

• To retain X% of new donors from our XYZ campaign
• To increase the donation of X% of regular donors
• To thank 100% of donors
• To retain X% of major donors

Use robust Fundraising Intelligence 

The more you know, the better you can focus your donor stewardship program. A robust fundraising intelligence platform is the answer for getting better data and the ability to be more targeted with your messaging.

Kindsight offers Fundraising Intelligence at a granular level so you can be better attuned to your donors. Learn more by requesting a demo here.

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Guest Author