[Editor’s note: This is a guest by our friends over at Virtuous. They will be presenting a Summer Insights webinar on this topic, register here to learn more. ]
The economy—she’s a roller coaster! One day it’s up, and the next…well, it looks less certain. While nonprofits have weathered numerous hardships in the last three years—the COVID-19 pandemic, natural disasters, and high unemployment rates—none rattle a seasoned fundraiser.
However, economic factors are something that no fundraiser truly feels ready for. Economic factors significantly affect how and when donors give to your cause. What we can control, however, is how we prepare our organizations for inevitable recessions. Nonprofits can ensure long-term stability by identifying new engagement opportunities and diversifying fundraising efforts instead of relying on a single source of revenue.
But what actions can you take now to seek sustainable growth?
Improve Donor Stewardship
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Did you know that acquiring a new donor costs five times more than retaining an existing one? As fundraisers, we often look outside of our organization’s database to see what new donors we can bring in and begin nurturing. In reality, the donors that exist in our database are simply waiting to be nurtured! That’s not to say you shouldn’t look elsewhere for new donors—but you shouldn’t bring in new supporters at the expense of your current donors.
When you look inward at your existing database, what donors can you identify that would benefit from additional stewardship? Can you sort or segment donors into three distinct categories?
- Those who have not given in more than 90 days
- Those who have not given in the last year
- Those who have not given in the last 5+ years
While these are simply suggestions for ways to segment your donors, the heart of the matter lies in that there are donors who are waiting and eager to be stewarded by your fundraising team! Begin simply by reaching out to remind them of your cause and how contributing to your mission helps empower grassroots or international efforts for the betterment of the world.
As you begin to take notice of your donor segments, ask yourself, “How am I stewarding donors that have contributed to our mission in the last 30 days?” If you cannot answer this question, that’s the perfect place to start!
An easy way to retain your current donors is by acknowledging and thanking them for their contribution in a timely and personalized manner. Retention rates increase when donors are thanked personally and authentically within 24 hours of their gift. This doesn’t mean just sending a tax receipt in the mail or via email. It means crafting a thank you email sent to donors within those 24 hours.
Don’t worry—this doesn’t have to be an elaborate exercise! Starting simple and small goes a long way.
- Craft a thank you page that appears after a supporter has given an online donation.
- Create a simple workflow that issues a personalized email within 24 hours of the online donation. Use merge tags—first name, last name, and gift date—in the email copy so personalization is a breeze!
- Start your day by calling supporters who gave in the last 24 hours and thanking them for their contribution. While many won’t answer, it’s a guaranteed serotonin boost for both you and them!
- Send a personalized text to the donor immediately upon donation thanking them.
By looking internally at your database and segmenting donors into distinct categories, you’re on the right track to increase donor retention through better donor stewardship. Add on personalization and quick acknowledgment of gifts, and you’re well on your way—without the added cost of acquiring a new supporter!
Diversify Your Fundraising Efforts
We all know the adage, “Don’t put all of your eggs in one basket,” and the same goes for your fundraising efforts. When evaluating your fundraising efforts, ask yourself, “Is the cost outweighing the gain for our organization?”
For many nonprofits, events are seen as the cornerstone fundraising strategy to achieve annual goals. While large-scale events are exciting to throw—over time, those events often hit a point where the costs outweigh the benefits. You may be risking your organization’s overall financial health at that point.
By diversifying your fundraising efforts, you’re not just being smart—but practical. There are other more cost-effective ways to fundraise for your mission—often without the added expense of food, materials, and labor costs that an event solicits! Here are some other strategies to consider.
Matching Gift Program
One way to increase your fundraising efforts is by offering a matching gift program. This addition on an online donation form, pledge card, or telephone ask can go a long way. Many corporations offer employees a matching gift program that can often result in a 1:1 or even 2:1 match!
With billions of corporate matching gifts going unclaimed yearly, it’s an incredible opportunity for your donors to increase their generosity without the added financial burden.
Transform Volunteers into Donors
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We’ve discussed at length that our current database of donors can help increase donor retention, but have you considered volunteers as well? 85% of volunteers say they’re happy to contribute financially to a cause—if only they were asked.
Sound familiar?
Ask your volunteers if they would consider donating a contribution to your cause. This can be easily presented by adding a donate button to your regular volunteer outreach emails or sign-up forms.
Become Responsive to Your Donor’s Needs
Lastly, one way to increase donor retention is by being responsive to their needs. When did you last speak authentically with a donor or engage with them via a survey? Supporters are willing and ready to share honest feedback with their chosen organization—we simply have to ask!
Consider sending a survey to a segment of your most interactive donors asking how to better serve and support them. Many will be eager to respond and may even share feedback that can help evolve your fundraising strategy for years to come.
Even with a constantly changing economic environment, there are many ways to increase donor retention. As your fundraising strategy evolves and becomes more donor-centric and proactive, you’ll steadily see retention and average gift rates climb! All without the additional cost of acquiring new donors.
