Knowledge and Insights

Given the current economic conditions, including an overall decrease in government funding, donor acquisition and retention strategies are more essential than ever for managing a nonprofit organization.  Over the last 10 years, donor retention has dropped significantly, which poses the question, “What are you doing to ensure the long-term viability of your organization?”

One of the key considerations in donor retention is creating and establishing a relationship with your major donors.  Touch points throughout the year will deepen this relationship.  Meeting with these donors a few times annually will help you understand what is important to them and show them that they really do matter.  As it would be nearly impossible to meet individually with all donors, additional touch points can be made throughout the year through personalized, hand-signed thank you notes or phone calls from board members and executive management.  This demonstrates the commitment and appreciation of those within the organization and speaks volumes to the donor – over and above mass produced communications.

Another key consideration is to establish and communicate planned giving.  Also known as legacy or estate gifts, planned giving is one of the best ways to ensure the long-term viability of your organization.  It also presents to the donor a new avenue to give, above and beyond the normal annual giving.  Educate your donor base about the potential favorable tax breaks associated with planned giving and incorporate this as an additional way to give in your fundraising communications.

Lastly, dispel the overhead myth by doing your part to focus donors’ attention on what really matters:

• transparency,
• governance,
• leadership and,
• results.

To do this, first, share data about your organization’s performance through your annual report and quarterly newsletters.  Second, teach donors to examine the results (especially the impact and outcome) rather than solely the percentage of every dollar that goes to pay for administrative costs and fundraising expenses. One way to refocus attention is to highlight the results of operations as opposed to financial ratios and have honest conversations about what it truly costs to meet your organization’s objectives.

Contact Mercadien’s Nonprofit Services Group at 609-689-9700 for help improving donor retention and achieving your organization’s financial and strategic objectives.

The author of this article, Christine Thomas, is a former employee of Mercadien.