Sunday, December 06, 2009

How The Everyday Donor Can Become A Major Ally In Your Nonprofit Surviving This Economy

Any nonprofit's relationship with its donors is invaluable the moment the donor gives for the first time, after they've given a second or third gift, and after they've given multiple numbers of donations over the course of years. The donors we're discussing, here, are not foundations or major corporate sponsors (who are solicited and cared for in their own unique way or at specific times). The donors that we are discussing, here, are the 'everyday' people who donate to your nonprofit perhaps through an annual appeal letter, or the local family owned business down the road that gives a couple hundred dollars each year. The sum total of all of these regular donors are what is called a nonprofit's donor base. How does a nonprofit retain donors, encourage their interest and support, and grow the amounts and frequency in which donors give? Donor development.

Donor development is the term given to building confidence in donors, educating donors, including donors, being transparent when reporting to one's donors, and caring for a given agency's relationships with all of its donors. Whether any donor gives any nonprofit a donation once a year or once a month, and also whether that donor gives $20 or $2,000. Donors are not simply people who gave money for your agency to go spend, without any regard for the outcome of the way the money was spent, without any regard for the donor's best intentions given the organization's mission statement, and it's an opportunity to raise more from that donor again and again.

You may be wondering how your organization can initiate or get donors giving, in the first place. Read Your Nonprofit Needs Cash Flow... to find out how to begin a donor base. You may also be wondering what today's donors are thinking about or considering (especially, today, in this economy) as they decide which nonprofits they will give to or won't; and for what types of programs or funding needs. To understand donors' motivations read What Motivates Giving.

Donor development has everything to do with treating the donor as the investor in the nonprofit that they are. Put another way, without regular donors or without donors who are asked to give again after they've given once - a nonprofit has no regular cash coming in the door to pay bills. It is difficult for any nonprofit to maintain its cash flow (and pay the bills) without a body of donors who are given by the nonprofit, itself, the incentive (provide donors with the recognition as supporters or enablers - because they are. Without them a nonprofit does not operate so the donor is the team member, on any nonprofit's team, that enables it to do its work), education (about the issue the organization serves, the current need in the community that still exists that the nonprofit serves, what it is explicitly doing currently in the community, and what its success rate is and why its uniquely situated (in its community) to succeed at its own mission statement), and included (e.g. through regular appropriate gratitude and acknowledgment of their contribution to the organization's success for the community's benefit). It is also difficult to grow a nonprofit and the programs or services that it offers without regular sustained support. Having a donor base, or a group of people, businesses, and other (usually regionally local to the nonprofit) supporters allows a nonprofit a certain amount of cash flow, month to month - a nonprofit that has an established, managed, developed, and involved donor base (who are involved as donors) is a nonprofit that has a sort of peace of mind among its nonprofit administrators and leaders.

Today's donor development is a bit different than at any other time in recent American philanthropy. The following are several suggestions to develop your agency's donors, this coming year, especially given the economy:

__ Put yourself in their shoes. Perhaps your have donors who have given regularly over the past two or five years but has indicated on an appeal remittance that they are sorry but they can't give this year. We can all appreciate this situation - but more than that: take their communication as not just an apology (or not just 'another donor who isn't giving this year') but rather as someone who is engaged with your agency, remains engaged, wishes they could give as usual - but can't right now. My point? The words "right now". This is still a regular donor to your nonprofit in their eyes - so do nothing in your agency's view of them. Ask them again next year for a contribution and let's assume the best for all of us in this economic downturn and assume that they will be able to donate again and then again for years to come.

__ Consider who is who among the entire group of donors. What is the breakdown of your donor base? No donor is more important than another (based on who gives how much) but for the sake of analysis and familiarity with what your agency can do to 'grow' specific sub-sets of the total group of donors is worth the time. Let's say that you analyze all donations (and the donors who gave them) given over the course of the past two years (to account for the economic downturn) and discover that 80% give between $1 - $50; %10% give between $51 - $100; 5% give over $100; 3% gave over $1,000; and 2% gave over $5,000. Your fundraising volunteers and staff can now sit down, given your region's economic situation, and strategize (realistically) how to increase next year's donation amounts over the course of next year for each of these sub-groups. For instance, perhaps for the 80% who give $50 or less, perhaps your nonprofit will instate two new annual appeal campaigns. For those who gave between $100 - $1,000 your nonprofit decided it will have a 'thank the donor' event where the executive director, board, and key staff will mingle with these donors thanking them for their generosity, listen to the donors' connection with your agency (note that for future interactions with the donor), and then include them in the two new appeal campaigns. Perhaps for the 5% who gave over $1,000 your board and executive director are going to divvy up their names and over the course of the year take their respective donors to lunch or breakfast, discuss their generosity, thank them, ask them if they're interested in becoming more involved, and share with them what current funding needs exist and ask for reasonably larger donations than their most recent.

__ Meet the donor where they have indicated to the nonprofit that they prefer to be met by your agency. In other words, if a donor, Ms. Jones gives each year to one fundraising method that your agency solicits her through - let's say an annual gourmet dinner and auction - then be certain to invite her to the same even next year. If, though, Mr. Smith has been invited to everything but only gives, year and year again, to the annual appeal letter then still include him (as long as he has not requested to not be solicited for these) to everything but be aware (perhaps indicated in your donor database software) that his preference is to donate each year, once, in response to your annual appeal letter.

The key for any size nonprofit (even an extremely large one) to begin, have, and maintain or grow a relationship with any one individual donor (out of its donor base) is to enter correct data (such as donation received, in response to what kind of solicitation or event, any connection that they personally have with the cause or issue or organization, etc.), but also refer to the data as appropriate (such as just before you send him or her a personalized thank you note or just before you take him or her out to lunch to ask for a major donation). Having information on donors is not some commodity to be sold or some invasion of privacy (and should not be acquired, managed, or thought of as such). Rather, it's the incidental information that the donor has made public (e.g. perhaps they just made partner at the law firm they work at), or the information gained after developing them over the years (e.g. your nonprofit assists those with multiple sclerosis and the donor has indicated that their older brother is a client of the agency's), or the information that they state directly (e.g. such as 'I wish I could give this year but I can't', or a response to a board member asking at a 'thank the donor' function why they give to your nonprofit). Information is very powerful in leveraging a donor's relationship with the nonprofit they support.

For further information read How To Increase the Number of New Donors

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