7 Best Practices for Effective Donor Management
Generous donor support is what keeps your nonprofit’s lights on, allowing you to work toward your mission more efficiently. That’s why it’s critical to have a clear donor management plan. How you engage donors, personalize your interactions with them, and show appreciation for them all impacts whether they continue supporting your cause.
In this guide, we’ll look at how you can create a well-rounded donor management approach to support your long-term fundraising strategy and goals. We’ll cover:
Donor management is a multi-faceted process, requiring input from different teams within your nonprofit’s staff. But when all the pieces come together, your nonprofit will benefit from loyal support, increasing your donor retention rate.
What is donor management?
Donor management is the steps your nonprofit takes to acquire new donors, collect donor information, and use that information to cultivate strong supporter relationships.
Because donor relationships are some of the most important relationships your nonprofit has, it’s important to optimize every stage of the donor management process. Creating a positive donor experience increases the chances that your donors will continue supporting your cause for the long term.
It’s helpful to look at the donor management process through the lens of the donor journey or lifecycle. The donor journey is the process by which new supporters learn more about your organization and determine whether they want to donate to your cause.
The four stages of the donor journey are awareness, research, decision, and retention. Let’s take a closer look at each phase and how your nonprofit can optimize the donor management process throughout each step.
In the awareness phase, potential new supporters hear about your organization for the first time. This is the stage where you’ll first make contact with individuals who may eventually become donors, meaning it’s crucial to make a positive first impression.
Creating targeted marketing campaigns is the most effective way your organization can manage potential donors at this stage. There are plenty of ways you might reach new supporters for the first time, including through:
- Google ad campaigns
- Social media campaigns
- Event promotions
- Direct mail outreach
The more touch points you can have with potential new donors, the more likely you are to catch their attention and spark their interest.
After hearing about your organization, potential new supporters will conduct further research about your cause and your mission. In this phase, it’s important to ensure your online marketing materials are designed to clearly communicate what your nonprofit does, why it matters, and how donor support makes a difference.
To help facilitate the research process, ensure the following marketing platforms are optimized to spread information about your mission:
- Your website. Make sure your website features a robust about page, community testimonials, past annual reports, information about donation uses, and other content that helps potential new supporters understand what your organization is all about.
- Your social media pages. Maintain an active presence on the social media accounts your nonprofit uses, whether on Facebook, Instagram, Twitter, TikTok, etc. Share information about events, volunteer opportunities, and fundraising campaigns. Also, create posts that offer insight into your organization’s history and current strategic goals. Social media is also the perfect place to feature the behind-the-scenes work of your nonprofit in action.
- Your email newsletters. Use your email newsletters as an opportunity to spotlight different aspects of your nonprofit’s mission. Include interviews with community members, volunteers, staff members, and other important stakeholders. Incorporate plenty of photos and other visual content to help bring your mission to life.
Ultimately, your goal should be to make it easy for new audience members to understand your organization on a deeper level in just a few minutes by looking at any of your digital marketing platforms.
In this stage, new audience members decide whether they want to show their support and donate to your cause.
Offer multiple ways for donors to give depending on their preferences, including:
- An online donation page. Your online donation page should be easily accessible on your website. Include buttons or links on your home page and menu that send website visitors directly to your online giving form. Make sure your donation page is streamlined and simple so that donors can quickly fill it out. Also, offer the option for donors to turn their one-time gift into a monthly donation to help encourage more recurring giving.
- Direct mail fundraising. Ensure your fundraising request letters include a pre-addressed envelope for supporters to send in a check or cash donation.
- In-kind donations. Make sure donors are aware of your in-kind giving opportunities. Some donors may work for or own companies that often have surplus products they can donate to your cause. Others may simply prefer donating items rather than monetary gifts.
Once donors decide they want to give, you want to ensure your donation processes are as straightforward as possible. This increases the chances that donors will follow through on their intention to give and feel more inclined to donate again in the future.
The donor journey doesn’t end once an individual has donated. In the ongoing stewardship and retention phase, your nonprofit must work to stay engaged with donors, cultivate stronger relationships, and ultimately encourage them to become recurring donors.
There are three aspects of the retention process:
- Donor appreciation. The first thing you should do after donors give is thank them for their contribution. Send an automatic thank you email and donation receipt so donors know that you received their gift. Then, continue your appreciation efforts with a more personalized email or letter. You can even call donors to thank them over the phone. A Bloomerang study found that calling donors twice within 90 days after their gift boosted retention from 33% to 58%.
- Donor stewardship/engagement. Donor engagement and stewardship are the relationship-building efforts your nonprofit undertakes to foster stronger donor relationships. These efforts include inviting donors to events or volunteer opportunities, sending donor surveys to gather their feedback, and sharing the impact of donations.
- Follow-up donation requests. After stewarding your donors, you’ll eventually be ready to request another donation. At this point, it’s important to use what you know about donors, including their past donation amounts, to request an appropriate donation amount.
By carefully managing and cultivating donor relationships, you can make the donor journey a cyclical process and promote more recurring gifts. Next, we’ll dive into some tips and best practices for optimizing your donor management at every stage of the donor journey.
7 tips to improve your donor management strategy
As you work to streamline each step of the donor lifecycle, there are several tips, best practices, and tools you can use that will help simplify the donor management process.
1. Set realistic goals.
Setting donor management goals can give your nonprofit’s team an objective to strive for that will guide all of your donor outreach efforts. Your goals should be SMART: specific, measurable, attainable, relevant to your organization’s overall mission, and time-based.
Set an overall donor management goal for your organization each year as well as goals for every campaign. For example, you might set yearly goals to acquire 200 new donors or increase your donor retention rate to 60%. Then, you might set smaller goals for your peer-to-peer fundraising campaign, such as recruiting at least 50 volunteer fundraisers or calling every person who gives to the campaign to say thank you.
2. Identify metrics.
Determine quantifiable metrics to assess your donor management progress. These metrics should be relevant to your goals. For example, you might track donor engagement analytics such as:
- Donor retention rate (how many donors who gave last year give again this year)
- Donor acquisition cost (how much funding your nonprofit spends to acquire one new donor)
- Donor lifetime value (how much value a donor offers your nonprofit over time)
You can use several tools and resources to identify and analyze these metrics, including your:
- Donor database
- Online donation software (this might be part of your donor management system)
- Social media platforms
- Email marketing platform
Work with your team to determine which metrics you’ll track, when you’ll report on each metric, and who is responsible for updating each metric.
3. Invest in donor management software.
A donor management system is a software tool that allows nonprofits to store, organize, and report on supporter data. You may have also heard this platform referred to as a nonprofit CRM.
Investing in powerful donor management software offers many benefits. This tool allows nonprofits to:
- Personalize donor outreach. When you keep track of donor information such as their full names, donation and volunteer histories, event attendance, and other data, you can personalize donor outreach messages. For instance, rather than sending a generic thank you email that begins with “Dear Donor,” you can send a personalized message that addresses the donor by name and thanks them for their specific donation amount.
- Track fundraising progress. Your CRM allows you to track fundraising metrics and other analytics related to your fundraising campaigns. This makes it easy to see how your events and campaigns have changed over time.
- Identify potential major donors. You can use your donor management software to identify donors who have the potential to become major donors. Donor management systems like Bloomerang provide insight into who your most engaged donors are and which donors have the highest giving capacity.
It’s important to look for robust donor management software that offers a wide variety of features to meet your nonprofit’s needs. Typically, it’s better to look for a more robust system upfront that can grow alongside your nonprofit rather than sticking with an inexpensive but less built-out option.
Look for software with features such as:
- A donor database. This is the tool you’ll use to build, view, and update donor profiles.
- Online giving tools. An online giving platform allows you to create an online donation page and process digital donations. This provides a better donor experience, empowering them to give from anywhere, at any time.
- Reporting features. Your donor management system should be able to run reports on a variety of topics, including marketing and fundraising campaigns, donor engagement metrics, and other annual planning insights.
- Integrations. Integrations allow you to extend your donor management software’s functionality by adding the other software tools you’re already using. This ensures seamless data transfers between your CRM and platforms like your email marketing tool or event management system.
Bloomerang’s donor management software buyers’ guide offers tips on choosing the right system for your organization. Be sure to schedule demos with your top options to get an idea of what the software looks like in action.
4. Ensure donors know the impact of their gifts.
Donors want to know that their gifts actually made a difference for your cause. Seeing the impact of their gifts first-hand can encourage them to continue giving.
In your ongoing donor communications, progress updates on how donations have helped you achieve a goal, complete a project, fund a program, or work toward another objective. Include photos that demonstrate progress, such as photos of your volunteers sorting thousands of food items using your new equipment, or images that show the construction of your new facility.
You might even recruit volunteers or community members to write thank you messages to donors letting them know the impact their gifts have had on them personally. This can build a stronger emotional connection with your donors and encourage long-term giving.
5. Segment donors to personalize communications.
Using the information in your donor database, you can segment supporters based on their shared interests or behaviors, creating smaller donor groups. Then, you can create tailored content for each group rather than sending generic, one-size-fits-all messages to your entire donor base.
You can segment donors based on a variety of criteria, including:
- Recency: This involves grouping supporters based on how long they’ve been involved with your organization. For example, you might create groups for new donors and long-time donors.
- Frequency: This describes how often donors give, whether monthly, annually, irregularly, etc.
- Amount: This involves grouping donors based on how much they give, including small, mid-tier, or major givers.
- Interests: You can also segment donors based on specific topics within your overall mission that they’re most interested in. This might involve creating groups for donors who are most interested in your volunteer program, community outreach, or after-school program.
Segmentation is an effective way to create more personalized outreach content while still saving your team time. Donors will appreciate your efforts to send messages that align with their interests and motivations. As a result, you’ll start to see increased engagement and a higher return on investment (ROI) for your marketing efforts.
6. Regularly update donor information.
Your donor information is only valuable if it’s accurate and complete. With accurate donor information, you can rest assured that you’re sending marketing messages to the right addresses, phones, and emails. This will increase your marketing ROI since you won’t waste time and effort sending messages to incorrect addresses or phone numbers.
To ensure that your data stays clean and updated, implement a data hygiene process for your team to follow when adding and updating the information in your database. Ensure your data hygiene procedures include these steps:
- Regularly audit your database to identify inaccurate or outdated information. Review your donor data frequently to identify any incomplete, inaccurate, outdated, or duplicate records.
- Remove any inaccurate data. Removing outdated or incorrect information prevents your database from becoming overwhelmed with useless information.
- Supplement your internal records with external data from an append. An append, such as an email or phone append, is the process of pulling data from a third-party source to fill gaps in your internal records. This process can help provide a more complete picture of your donors and help you gain access to contact information you didn’t previously have.
It’s helpful to find donor management software that completes these processes automatically. For instance, Bloomerang’s donor management system performs automatic daily updates for information such as birthdays, addresses, and donor wealth information. This can save your team’s time and help ensure your records are as accurate and comprehensive as possible.
7. Communicate with donors regularly.
As you carry out your donor stewardship efforts, it’s important to strike the right communication balance. You don’t want to flood your donors’ inboxes. However, you don’t want to fall off their radar and have them forget you, either.
Creating a communication cadence can be a helpful way to ensure you’re engaging with donors regularly without overwhelming them. Your cadence might start with a thank you email after a donor gives for the first time. Then, it might include several additional messages spread over a few months.
Using a multichannel outreach strategy allows you to have multiple touchpoints with donors that feel fresh and unique. Consider using the following platforms as part of your multichannel communications:
- Social media
- Direct mail
- Phone calls
Use your communications to highlight additional ways to engage that don’t involve donating, such as volunteering or attending events. This shows supporters that you value all kinds of support, not just donations. Plus, when donors participate in these opportunities, they may feel a stronger connection to your cause, encouraging them to stay involved for the long haul.
As you can see, donor management takes time and careful planning to cultivate long-lasting supporter relationships. Using robust donor management software and marketing tools makes the process easier, helping you keep all donor management activities under the same roof.
Ultimately, effective donor management is all about using the information you have about your donors to personalize your interactions with them and create a better experience. For more information on optimizing your donor management approach, check out these additional resources:
- Donor Stewardship: Expert Tips To Build Strong Relationships. Relationship-building should be the foundation of your donor management strategy. This guide offers tips for building meaningful relationships.
- Donor Management Software: Buyer’s Guide + 16 Top Solutions. Bloomerang’s donor management software buyers’ guide offers tips for the decision-making process and reviews 16 top solutions for nonprofits.
- Major Gifts: The Ultimate Guide to Kickstart Your Program. Managing major donors requires an even more personalized approach. Kickstart your major gift strategy with the help of this guide.