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Donors who feel valued tend to be loyal to the nonprofit organizations that appreciate them. By practicing donor stewardship, your nonprofit can surpass the average donation retention rate of 43% and build a stronger supporter base.
Donor stewardship focuses on building long-term relationships with your supporters by frequently acknowledging their gifts, inviting them to get more involved, and connecting through their preferred communication channel. These efforts help cultivate repeat gifts and engage donors.
In this guide, we’ll cover everything you need to know about donor stewardship, including:
- What is donor stewardship?
- The 5 stages of donor stewardship.
- How to create a donor stewardship plan.
Let’s start with the basics!
What is donor stewardship?
Donor stewardship is the relationship-building process that occurs after a donor supports your organization.
Stewardship is a piece of your larger donor relations strategy. Donor relations ensure supporters have a positive experience with your nonprofit as a whole, whereas donor stewardship is focused on improving the giving experience.
Stewardship relies on continuous communication and engagement to thank donors properly and put their gifts to good use. Consistent stewardship efforts can help your organization:
- Cultivate repeat gifts.
- Improve donor retention.
- Increase donors’ lifetime value.
Donor stewardship is all about keeping your donors passionate, eager, and willing to support you for years to come!
The 5 stages of donor stewardship
1. Gift acceptance
Once you receive a donation, your organization should have a proper procedure in place to accept it. This is where a gift acceptance policy can help.
A gift acceptance policy is a procedure used to manage donor expectations and guide your nonprofit through the process of asking, receiving, and accepting donations. Specifically, it creates an efficient, standardized method for:
- Reviewing each gift to ensure it can be used the way the donor intends.
- Deciding how gifts will be handled if they can’t be applied the way donors request.
- Tracking gifts to follow and report on how each one was used.
- Providing guidance on handling in-kind donations as well as monetary ones.
If there are specific types of gifts your organization can’t accept, it’s best to outline them in a clear, written policy. Donors will appreciate this transparency and understand that you’re grateful for their efforts.
Donor acknowledgment is critical as it ensures your organization complies with legal regulations. The IRS requires nonprofit organizations to send a formal donation receipt letter to donors who make a contribution larger than $250. This document recognizes their charitable donation and can be used by the donor to claim a tax deduction.
An acknowledgment letter should include a brief expression of gratitude followed by your nonprofit’s name and the donation amount (or a description of a non-cash contribution if applicable). This satisfies the legal component of donor stewardship and can improve donor stewardship at the same time by recognizing each gift’s value.
3. Personalized recognition
To begin the recognition process, nonprofit organizations should follow up each gift they received with a sincere, personalized thank-you letter or email. After this first step, get creative with how you express your appreciation. Strong donor recognition strategies include:
- Promptly following up with an email, phone call, and/or meeting(depending on the size of the gift and pre-existing relationship with the donor). We recommend following up within 24 hours or one week at the latest.
- Hosting donor recognition events to cultivate relationships and encourage higher levels of giving.
- Featuring donors in your nonprofit organization’s newsletter, publication, or annual report to add interest and celebrate donors.
- Creating giving societies and honor rolls that offer tiered recognition and accompanying benefits.
Donor appreciation takes a supporter’s unique preferences into account, such as whether they prefer to remain anonymous or receive recognition. If you give your donors a highly personalized sign of appreciation, it will deepen their relationship with your organization.
4. Communicating results
While donors value acknowledgment and recognition, they also want to see the impact of their gifts. Communicating your results back to donors keeps your supporters well-informed about how their gifts are being used.
Consider the following strategies to report the impact of a gift:
- Send campaign updates via email and direct mail.
- Feature stories in your newsletter.
- Post updates on social media and your blog.
- Create case studies highlighting the community you serve.
When a donor can follow their gift’s full journey, they will feel more inclined to continue lending their support.
During the final stage of your stewardship process, focus on motivating donors to continue or increase their support. Keep the emphasis on relationship-building rather than solicitation to develop deep, positive connections with donors.
Incorporate these simple cultivation tactics into your stewardship strategy to encourage commitment to your organization:
- Share plans for the next stages of projects that donors gave to in the past.
- Suggest related programs donors could be interested in supporting based on their previous interests and giving history.
- Ask donors to spread the word about a project or program they’re passionate about on social media.
- Invite donors to a fundraising event, volunteer opportunity, or tour of your headquarters to see the results of their gifts firsthand.
What do your donors value? What approach do they respond to? How do they want to be contacted? Answering these questions will help cultivate your relationships with donors as they move towards their next gift.
How to create a donor stewardship plan
Donor stewardship requires creativity and planning to build long-lasting relationships. Create an effective donor stewardship plan with these steps:
- Organize a stewardship team. Recruit members of your staff and board to reach out to donors. Ensure everyone is on the same page and well-equipped to engage in timely, meaningful stewardship.
- Study your donor data. Utilizing your CRM for donor information like engagement history will provide a roadmap for your stewardship plans.
- Identify and segment donors by levels. Based on this data, group donors into well-defined segments such as new donors, long-term donors, and major donors. Then, create customized messages for each segment, making donors feel like you’re speaking directly to them.
- Develop and organize stewardship opportunities. From hosting donor appreciation events to sending out acknowledgment letters, make sure you’re prepared for each stage of stewardship.
- Evaluate feedback and data results. Measure the impact of your stewardship plan by documenting contributions and making note of any changes like increased donation amounts. Then, collect data and feedback from your CRM and surveys to improve future stewardship.
Remember that the purpose of donor stewardship is to give back some of the appreciation that your donors have shown you. By investing time and effort into this process, you can cultivate a base of happy and loyal supporters.