Building a Successful Nonprofit Donor Recognition Program

Building a Successful Nonprofit Donor Recognition Program

Written by Jennifer Dempsey

What would you say is the most important idea or concept a nonprofit can express to its supporters? How your organization is making an impact in the world? How donations are being spent? How donors can give?

 

The most important thing you need to say to your supporters is just two simple words; Thank you

 

A recent study asked non-profit donors who’d previously made an annual gift between two hundred fifty and twenty-five hundred dollars to a cultural organization – and then did not donate again within 24 months why they stopped giving.

 

 

The number one reason listed for not donating again? “Not acknowledged/thanked for previous gift”.

 

As this study shows, the way in which you recognize donors is too important to be left to chance. To retain donors year over year and ensure the continuing health of your organization, you must have a strategic donor recognition program in place that explains in detail how your organization will express gratitude to your donors in a fair, consistent and appropriate manner.

 

There are 5 steps to follow when building a non-profit donor recognition program.

 

 

  • Define Your Organization’s “Why”
  • Create Donor Personas 
  • Establish Goals for Your Donor Recognition Program
  • Create Your Donor Recognition Program
  • Periodically Review Your Donor Recognition Program

 

 

 

As you go through the process of building this program, remember to keep a relationship-first mindset. A donor who is only able to give a small gift today may turn into a larger donor tomorrow. Likewise, a new subscriber to your email list may just be one nudge away from becoming a loyal recurring donor. Every supporter, regardless of the size or frequency of their financial gifts, should be nurtured and made to feel appreciated.

 

Step 1) Define Your Organization’s “Why”

 

Your organization’s “Why” is the reason you exist. It’s your vision, your passion and the opportunities you have to change the world for the better. Your “Why” is what connects you to the heart of your donors and ultimately inspires them to give. The “Why” of your organization goes beyond the “What” of what you do.

 

Consider a large charitable organization like Habitat for Humanity which is highly successful in garnering not only financial support from its supporters but large in-kind donations as well. What Habitat for Humanity does is build affordable homes. That’s a noble endeavor but it doesn’t tell the people who live in and around the area in which these homes are built how this activity benefits them. That’s explained by the organization’s “Why”.

 

What Habitat for Humanity does: Helps families build and improve places to call home. 

Why they do it: Affordable housing plays a critical role in strong and stable communities.

 

Do you think a supporter would be more inclined to give after understanding the organization’s “Why”?

 

After you’ve identified and clarified your “Why”, the next step is creating donor personas.

 

Step 2) Create Donor Personas

 

Here at PHOS, when we first begin working with a client, we ask them to describe their ideal customer/customers. Once we’ve collected valuable data about their customer’s wants, needs and behavior, we create a “buyer persona”, a fictional customer profile that includes all of those concerns, interests, and behaviors. 

 

Non-profit organizations can benefit greatly from this exercise as well. Before crafting a donor recognition program designed to communicate your appreciation to supporters, it makes sense to have a clear understanding of who your supporters are, why they give and how they want to be recognized.  

 

To begin this exercise, you’ll want to group the total group of supporters you’re trying to reach by category. Here are some possible market segments you might want to consider starting with:

 

  • Those who share your organization’s burden and vision but haven’t donated yet
  • One-time donors
  • Major/loyal donors
  • Donors who used to give in the past but no longer give

 

Within each of these categories (or market segments), you’ll find a wide range of individual customer personalities with different likes, dislikes, motivations, and preferences. The more you know about each group, the better target your outreach efforts to align with their needs and wants.

 

Let’s start creating a buyer persona for someone in the first group, someone who shares your organization’s burden and vision but hasn’t donated yet. This individual has taken the first tentative step of supporting you by agreeing to follow your updates on social media or receive your monthly newsletter. At this phase of the supporter’s journey from prospective donor to loyal supporter, he or she doesn’t have a high level of trust in your organization yet. They need to know more about you. Where will their donations go? What is the fiscal health of the organization? When you communicate with someone in this group, your job is to build a relationship and increase trust. (This is also true for new one-time donors.) You might even want to assign a name to this donor persona like “Newcomer Nancy” to help you imagine talking with her about her concerns and interests. And don’t forget that Newcomer Nancy needs to feel appreciated and valued for agreeing to receive those future communications. She may not have given to you monetarily yet but she’s giving you her time and attention and that’s worthy of acknowledgment. 

 

Contrast “Nancy Newcomer” with someone who belongs in the Major Donor/Loyal Donor group. We’ll call him “Recurring Richard”. Recurring donors feel confident that their money is being spent wisely, otherwise, they wouldn’t continue to give. Here, you’ll want to focus your communications on making Richard feel appreciated and valued and providing him with regular updates on the projects his donations helped fund as well as new, similar projects in development.

 

Once you’ve created a donor persona for each group, you’re now ready to establish specific, actionable goals for your donor recognition program. 

 

Step 3) Establish Goals for Your Donor Recognition Program

 

Now that you’ve defined your “Why” and have clearly identified the different categories of supporters you’d like to reach with your marketing and donor recognition messages, it’s time to give clarity to the program goals. What do you want the program to accomplish specifically? 

How will you measure success? 

 

Here are a few metrics you may find helpful to discuss with your board members and stakeholders as you establish goals for your donor recognition program:

 

  • Retention: The number of donors you keep as evidenced by the percentage of major donors who give year after year and the number who leave or reduce their giving 
  • Total Giving: The number of dollars received in a calendar year
  • Number of Touches: How many times did you communicate via email, phone, letter, etc before a prospect donated?

 

Once you’ve established the goals for your program, you’re ready to craft a formal plan. 

 

Step 4) Create Your Donor Recognition Program

At this stage in the process, you will detail the procedures and policies for acknowledging and recognizing donors at each level of giving. 

You’ll want to ensure that your plan includes the following:

  • Communication: How often will you communicate with donors? What online and offline channels will you use? How will the tone and content of your communications change? Will you need to change the content or design of your website to better communicate your “Why” or speak to an underserved donor persona? 
  • Confidentiality: Not all donors wish to be acknowledged publicly. How (and where) will you publish donor information?
  • Gift Types: What types of gifts will you receive? How will you handle special gift types such as in-kind or endowment gifts?
  • Stewardship Practices: What will trigger the acknowledgment of a supporter and how will you recognize them? Will you send them a gift? Offer membership at a certain level of giving? Hold donor appreciation events? Write a personalized letter? Invite the donor to a special ceremony or volunteer opportunity?

 

 

Keep in mind as you craft this plan that not all donors are motivated by public recognition. For some donors, being offered something (like a gift) in exchange for a donation actually reduces the feelings of altruism which contributed to the initial donation. That doesn’t mean they don’t want to be acknowledged privately for their contributions, however. For these donors, a letter or a personal visit might be more appropriate.

 

You’ll also want to build a regular review process into your donor recognition plan which includes periodic surveying and the solicitation of donor feedback. This is not only a good way to continuously improve your donor recognition program but it makes donors feel their opinion counts and builds relationship. 

 

Step 5) Periodically Review Your Donor Recognition Program 

Your donor recognition program should be re-evaluated as often as your organizational needs change or at least once a year. 

Solicit valuable feedback from each of your donor groups and ask them questions such as:

  • For new donors: How long did you consider giving before you made a donation? What led you to give? 
  • For donors who used to give regularly but have stopped. “What made you stop giving?” 
  • For all donors: How do you prefer to be acknowledged/recognized for your support?
  • For all donors: What is your preferred method of communication? (Email, letter, phone)
  • For all donors: How can we make it easier for you to donate? (This can be especially enlightening and can reveal problems including your online donation form not working, a need for training of the employees/volunteers who answer the phone and more.)

As you follow these five steps, remember that the words you use with your supporters matter. At PHOS, we understand the power of messaging. We would love to:

  • Help you clarify your “Why”
  • Use our marketing expertise to help you craft a strategic donor communication plan 
  • Use our digital marketing expertise to help your organization stand out in a saturated digital space.

How can we help you fulfill your mission?

Jennifer Dempsey

As an Inbound Marketing Executive, Jennifer helps her clients reach, inspire, and educate their target audiences online. She loves helping clients tell their story in a compelling way that stands out in a crowded digital space.