The foundation of an effective fundraising strategy is built on the relationships your team forms with the people who power your mission. Every member of your nonprofit team already knows how to build strong relationships with friends, co-workers, family members, significant others, and more. Magic happens when you build those kinds of relationships with your prospects and donors. This is where donor stewardship comes into play.
What is donor stewardship?
Donor stewardship—also known as stewarding your donors—is the act of building relationships with supporters after they make a donation to your nonprofit. A donor stewardship plan is a long-term strategy to strengthen those relationships in the hopes of earning repeat donations from these individuals.
In this guide to donor stewardship, we’ll review what your organization needs to know and do to build authentic, long-lasting relationships with donors. We’ll explore:
- How does donor stewardship impact donor retention?
- Building your donor stewardship plan
How does donor stewardship impact donor retention?
Your donor retention rate measures how many donors continue to give to your organization over time. You can calculate your organization’s retention rate by dividing the number of donors who gave again this year by the number of all donors who contributed last year.
You’ll be able to tell from your donor retention rate if you have a solid contingent of donors who give to your nonprofit month after month or year after year or you’ll see if you’re struggling to retain donors. If you relate to the latter, you’re not alone—the average donor retention rate for the nonprofit sector hovers around 45%.
When new donors give only once, you experience a loss on the initial investment to acquire those new supporters. As you know, there’s a cost associated with bringing in new donors; this is the money spent on your donor acquisition efforts. It’s usually more expensive to acquire donors than it is to retain them as donors tend to give in larger quantities the longer they engage with your organization. That’s one reason why focusing on retaining donors is important—it’s much more cost effective for your organization in the long run.
Luckily, there are plenty of strategies your organization can use to encourage donors to make repeat donations, starting with implementing a strong donor stewardship plan. By stewarding your donors, you’ll show them that your organization appreciates their continued support and contributions. That’s the first step in building deeper relationships with your donors. When they see how they’ve impacted your mission and that you recognize their contributions, they’ll be more inclined to give in the future. Depending on your donor management software, this can be a relatively seamless process or it can take some time to set up.
Building your donor stewardship plan
Let’s take a closer look at how you can start building genuine relationships with your donors through a strong donor stewardship plan.
The stages of donor stewardship
The donor stewardship process begins when a supporter donates to your cause for the first time. Your donor stewardship plan will outline how you encourage these individuals to continue supporting your cause.
Review the steps of the donor stewardship journey below:
- Acknowledge the donor’s gift as soon as you receive it. The very first thing you should do after you receive a donation is thank the donor. You can do this by sending them an acknowledgment email that includes information on the donation they made and a note of thanks.
- Send the donor a personalized thank-you message. Next, send each donor a personalized thank you message that includes their name, references their specific donation amount, details the impact the donation will have on your mission, and shows appreciation for their support.
- Create and send updates that communicate the impact they made. By making a donation, a donor is showing that they’re interested in helping you carry out your mission. Follow up with each donor by sending messages that describe how their donation is being used and the impact it’s having. In these messages, you should invite donors to continue engaging with your mission in other ways. You can do this by encouraging them to participate in a volunteer opportunity or attend one of your events.
- If applicable, thank your donor publicly. Not all donors want their donations to be publicly acknowledged, which is why you should always ask before you share this information. For those who are fine with your organization sharing that they made a donation, you can highlight your donor on your social media pages, on your website, or on a donor wall at your office. You can also invite them to meetings or events to express your gratitude in person. Use these opportunities to get to know your donors better by asking them about themselves and finding out what drew them to your cause.
- Invite the donor to give again. After you’ve stewarded your donors in the above ways, you can ask them to make another contribution. Once you do, go back to the first step in this plan and start this process over.
This is a general outline of what the stages of the donor stewardship process look like, but your organization can adopt other engagement strategies. Just follow the approach that works best for your organization’s unique situation.
We’ll review a few best practices to help inspire your brainstorming process and determine how you might go about carrying out the five stages of the stewardship journey.
8 best practices for enacting your donor stewardship plan
Now that you know the basics, you can start stewarding your donors. Here are eight strategies that will help you carry out your donor stewardship plan effectively.
1. Create your donor stewardship team.
Every plan requires a strong team to help see it through. Create a team to lead your donor stewardship efforts, ensuring each individual has a clearly defined role in the process.
Depending on the size of your staff, your donor stewardship team might consist of the individuals featured in the graphic below.
- Your Director of Donor Relations will lead the team in carrying out your stewardship efforts, overseeing your strategy at the highest level, and offering support to other team members.
- Your Major Gifts Officer will focus their efforts on building relationships with major donors.
- Your board members can meet with high-impact donors, contribute to appreciation efforts, and act as ambassadors for your cause.
- Your volunteers can support your stewardship efforts by helping you write and send acknowledgment letters or by calling donors to thank them.
It’s important to make sure that each team member understands their role in supporting your stewardship efforts so that everyone is on the same page and there is no overlap or gap in responsibilities.
2. Create a communication cadence.
Establish a clear communication cadence that takes donors through the stewardship process in a way that keeps them updated—and does so without sending them too many emails during a short period of time, as this can cause email fatigue. Use analytics from your email marketing platform and social media pages to determine when supporters are most active. This can help you decide how to space out your donor communications.
Your first email or letter to the donor should describe your mission, projects, and goals. Your follow-up communications should include more information about how their donation was used, why you’re grateful for their support, and what your goals are for the future.
By using an email provider that integrates with your donor database, you can automate your donor communications to reach donors based on where each donor is in the stewardship process. This ensures that you’re communicating with donors on a regular basis and saves your team time.
3. Start with introducing your mission to your donors and finding ways to make a positive impression on them.
When you first reach out to your new donors, remind them about what you do and why their donation matters. As you do that, make sure that you’re leaving a positive impression on donors.
This might include:
- Answering the phone when donors call and calling them back as soon as possible if you miss their call
- Greeting someone when they visit your office and showing them how your team is working to put their donation to good use
- Getting to know donors at events
- Getting to know your volunteers
- Interacting with your supporters on social media
By keeping donors updated on your work and making sure all interactions with them are positive, you’ll build deeper and more authentic relationships with them. This should help you win a second donation from them—and hopefully many more in the future.
4. Practice donor segmentation.
Donor segmentation is a tactic where you group your supporters based on shared characteristics. This practice allows you to create a more personalized experience for donors without having to go through the time-consuming process of creating unique messages for every person who interacts with your nonprofit.
Donor segmentation also enables you to send your donors information that they’re most likely to engage with. This shows them that you care about connecting them with opportunities that appeal to their motivations and interests.
You might create donor segments based on the following criteria:
- Donation frequency: Group donors by how often they make their gifts. This can include donors who gave annually, monthly, at some other irregular interval, or recently for the first time.
- Donation recency: Group donors by when they made their last donation.
- Donation type: Group donors based on how they made their donation. This can include grouping donations received through peer-to-peer fundraisers, monthly giving programs, online donation forms, mail-in contributions, etc.
- Donation amount: Group donors by how much they gave and what category they fall into. You might group your donors by major donors, mid-level donors, and lower-level donors.
- Donor motivation: Group donors based on what motivated them to give to your cause. You can find this out by seeing which campaign or call to action motivated them to give.
Determine which segments make the most sense for your nonprofit. Then create personalized and relevant messages for each segment.
5. Optimize your communication platforms.
You should communicate with your donors through all of your communication platforms. An effective donor stewardship strategy makes use of both online and traditional marketing channels.
Here are the platforms and channels you might use to connect with your donors:
- Social media (Facebook, LinkedIn, Instagram, Twitter, TikTok, etc.
- Phone calls or text messages
- Direct mail
- In-person gatherings
Track your donor outreach using your donor database. This will help you see which outreach efforts are or aren’t effective and will inform how you should adjust your strategy accordingly.
6. Show donors that you’re using their gifts as expected.
When donors give to your organization, they expect that you’ll use their donations as you said you would in your outreach messages or on your online donation page
For example, if you said a donation would go toward supporting your volunteer program or purchasing new equipment for your community center, make sure that you do those things and let your donors know when you’ve done them. This helps build trust between your organization and your donors, which will encourage your donors to support your organization in the future.
7. Ask donors for feedback.
One way to increase donor loyalty is to show donors that you appreciate their input. You can do this by asking them for feedback and implementing any reasonable changes they request (as long as the changes align with your mission and put your resources to the best use).
Send out regular donor surveys asking what they think about things like how you can improve your fundraising events or how they’d like you to communicate with them in the future.
8. Create memorable moments for donors.
Creating memorable experiences for donors keeps your organization on the top of their minds. This is important for winning a second donation from first-time donors and getting your current donors to give again, more often, or in larger amounts.
Here are a few ways you can create memorable moments for your donors:
- Send them a heartfelt thank you message when they aren’t expecting one. Send donors a video of you thanking them or a thank you note from your volunteers or beneficiaries. Do this out of the blue, not just after they donate. They’ll feel more appreciated that you value them beyond when they make a donation.
- Show donors that you consider them an important part of your community. You can do this by sending them a birthday card or calling them on an anniversary that they’ve shared is important to them.
- Send an unexpected gift. Show donors you’re thinking of them by sending a small gift, whether that’s a branded t-shirt, sticker, water bottle, or coupon book for local businesses.
Your attempts to create memorable moments for donors will help your organization stand out from the crowd.
Effective donor stewardship includes a combination of tried-and-true strategies and robust software solutions to be successful. Look into your options for effective fundraising software like Bloomerang to help power your stewardship efforts. Bloomerang can help you:
- Manage donor relationships
- Keep track of your retention rate and other engagement metrics
- View giving timelines that summarize your donors’ engagement histories, encompassing every email they received, event they attended, and donation they contributed.
Try Bloomerang for free to test out these and other donor stewardship features. If you’re looking for more resources to help build your donor stewardship plan, you can find those here:
- Nonprofit CRM: The Buyer’s Guide + 9 Solutions (2021 Update). Your CRM is your ultimate tool for keeping donor data organized and accessing data insights. Here are the top nine solutions to consider.
- Major Gifts: The Ultimate Guide To Kickstart Your Program. Your major donors supply your organization’s largest gifts, so it’s important to have a specific strategy for stewarding these donors. This guide will help you get started.
- Donor Segmentation | Comprehensive Guide + Tips for Success. Donor segmentation allows you to send more relevant, personalized messages to different donor groups. Learn more about this technique with this comprehensive guide.