Why Small Donations Should Matter A Lot To Nonprofits

When we released the results of our first $5 experiment, some were quick to admonish us for being too harsh on poor gift acknowledgement following such a small donation.

No one expects a nonprofit throw a parade in someone’s honor after a measly $5 donation. However, savvy organizations with high retention rates understand the potential in gifts of all sizes – especially small ones – and segment their follow-up accordingly.

Small donations shouldn’t be shrugged off

A small donation can send one of several different signals, each with its own appropriate response:

1) First-time donor without significant financial means

This donor is likely new to your organization, and was obviously interested enough to make a contribution.

What you can do:

• Survey – Find out why the gave, what they expect from the organization, where their interest lies.
• Invite to volunteer – They may not have the financial means, but they may have free time and energy.
• Upgrade to a recurring gift – If you’re feeling bold, consider introducing the idea of a monthly gift at the same amount.

How you follow-up will be the interaction they get from you after being a donor. First impressions are everything!

2) Repeat donor who has downgraded

This donor isn’t new to your organization, but their giving has dropped off.

What you can do:

• Examine their history of giving – Is this a large downgrade? Was the drop sudden, or is it part of a trend? Are donors of a similar demographic also downgrading.
• Reach out personally – Find out what’s going on. Are they unhappy with the organization? Are they going through financial difficulties?

3) Secret shopper

This donor could be scoping you out.

Who they might be:

• A potential board member
• A potential employee
• A potential sponsor
• A potential grantee

Any one of these parties could be checking to see how you follow-up. Do you communicate impact? Who does the communication come from? What is the content of your newsletters and other marketing materials?

You might be surprised by how often this happens. All the more reason not to shirk small donations.

4) Recurring donor

If you’re getting a monthly gift from a recurring donor, don’t wait until the end-of-year tax receipt to make them feel special. These are likely your most loyal donors, and are ripe for major gift cultivation.

What you can do:

• Call randomly to say thanks – Don’t coincide the call with a gift – make it unexpected!
• Take them out to coffee to ask for feedback – What could we be doing better?
• Invite for in-person tours – Show them how their gift is making an impact.

It doesn’t take much to treat small donors like royalty

All the research in the world tells us that donors want to feel appreciated. In fact, nearly 50% of donors lapse because of poor appreciation.

You can make a small, first-time donor feel as appreciated as a major donor or high-level sponsor without throwing a gala or ordering a brick paver.

Try one or more of these things:

• A handwritten note
• A quick phone call (voicemails are just as good)
• A test message
• A personal email (not auto-generated from your payment processor, but from a real staff/board member)
• A tweet or LinkedIn message

None of these activities requires much time or effort, but are more powerful than any form letter or donation auto-response email.

If you struggle with manpower to make phone calls or handwritten notes, consider getting your board members of a group of volunteers together to help out (order a few pizzas for them).

Just look at these examples:

Thanks @StevenShattuck (A Friend of Nonprofit Hub) for supporting the biggest outdoor dance party in Wayne, Ne!

— Launch Leadership (@Launch_Leaders) May 28, 2015

@StevenShattuck Thanks for your support of United Way of Central Indiana. #LiveUnited — United Way (@uwci) May 17, 2015

Here’s a great example of a handwritten note:

And here are two examples of how quick, easy and impactful a thank you voicemail can be:

All of the above examples came from first-time, $5-$10 donations. Each represents the start of what could be a deep relationship – a relationship that may be difficult to form through just a templated email (although, that’s not to say that an email receipt can’t delight a donor).

So don’t sleep on the small donations, especially from first-time donors. Their lifetime value could equate to 1000x that initial donation over the longterm.

Do you segment your donors by donation amount and follow-up differently? Let me know in the comments below!