Donor Management Guide: Essential Tips for Nonprofits

April 12, 2016
12 minutes

No matter the size of your nonprofit or the focus of your cause, there’s something that all these organizations have in common: the one link between all nonprofits is that they have donors—and therefore, have to consider donor management.

Most nonprofits have good relationships with their donors and make them a priority, and some recognize that having a big-picture donor strategy is critical, but regardless of where you’re at in this journey, there are some clear do’s and don’ts to consider.

We’ve put together a donor management guide that provides nonprofits of all sizes a list of essential tips for thriving when it comes to growing your donor base, keeping them happy, and improving all the technical and reporting bits that make this possible. If you’re struggling to figure out how to keep your donors engaged or you want to take things to the next level, we’ve got you covered.

What Exactly Is Donor Management?

The concept sounds easy enough (you know, managing your donors…) but actually putting a donor management system into place is not as simple as it seems. Each nonprofit will have its own ideas when it comes to how to approach this, but there are a few key things to keep in mind. First, you’ll want to keep detailed records of who your donors are, where they live, how much they’ve contributed, and how often. Easy enough with an Excel spreadsheet when you’re small, but it can get sticky very quickly. 

Depending on the structure of your organization, it might be smart to track where funds are allocated, especially if you have multiple campaigns happening at once. Donors may not always be forthcoming with their personal information, so whatever you can gather and retain from them will prove to be useful in the long run (and anything you can do to put them at ease is important). Even with the fastest data entry fingers and the prettiest spreadsheet, you’re probably going to find that you want a better solution before long.

Three donors profile pictures float in a web browser window as if inside a CRM.>

Consider Your Donor Management Software

As any director or manager worth their salt will know, it’s all fun and games when it comes to planning events or building a fresh social media presence, but like any other organization, someone has to keep track of everything, and that’s where donor management software comes in. Without being able to capture and organize data about who it is that’s giving you money, how can you truly identify areas of opportunity to really thrive?

You don’t have to be a spreadsheet whiz or spend tons of hours learning a complicated program just to get your donor management under control. Funraise offers tools that are intuitive to use and easy to learn. From keeping track of specific donor data to running reports using a range of filters, you’ll be able to capture each donor’s information simply. Want to track a campaign’s performance or integrate all payment methods like PayPal, ApplePay, or even a good old paper check in one place? Funraise Free has features to help you with all of that and more.

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All About Segmentation

Once you have a donor management software system in place, what, exactly, are you supposed to do with it? How precise you want to get with your donor management efforts is entirely up to you, but many nonprofits will benefit from some basic segmentation, which can be hugely beneficial when deciding where to focus their efforts. Think of segmentation like grocery shopping—if you aimlessly walk the aisles of the supermarket, throw random ingredients into your cart, and try to make sense of what to cook when you get home, you’re probably going to end up ordering out again. Instead, taking the time to plan ahead and organize your list helps you to be the most efficient and ensures that you’re not living off of Postmates.

Segmentation allows your organization to categorize your donors into groups based on any number of factors. You can keep things very basic and separate them into local and non-local contributors or target your marketing efforts based on their age. Other nonprofits like to segment their donor data based on how frequently people contribute, allowing them to see where they need to increase their engagement efforts. Ultimately you get to decide how to best use segmentation to your advantage and a platform like Funraise makes this process super easy.

Cultivate Recurring Donations

Recurring donations may not make up the lion’s share of your fundraising base, but even if they don’t, it’s extremely valuable to any non-profit to cultivate and encourage this type of giving. Firstly, recurring donations are reliable and consistent, which allows your organization to plan and budget more effectively. As your non-profit grows, having this strong foundation to build from will be increasingly essential.

These donors tend to be more valuable overall as well--according to one study, the average monthly donor gives almost six times as much as a one-time donor over the course of a year. There is also a noticeable trend toward this form of giving, with many donors preferring to give smaller amounts consistently over time than in one large chunk (check out this great example of how For the Children doubled their recurring revenue). Managing these donors and making sure to retain them is a critical part of any donor management strategy.

Want to know more about recurring giving? →

Make Use of Your Data

It’s the twenty-first century, even the most wizened non-profits can’t afford to ignore data any longer, and even if you’re still small, you should be using the information you have to intelligently plan your donor outreach.

Even if you’re still using a spreadsheet to track your donors (but surely you’re not), you can and should use the information you have to be smart about how you’re interacting with your donors. Who used to donate regularly but has fallen out of contact? Who has upped their contributions lately and might be a good candidate for more personalized outreach or recognition? When do your social media pushes or campaigns have the most impact? The right tools, like Funraise’s donation management platform, will make this a breeze, and having the right information is more important than ever when it comes to donor management.

Automate What You Can

Non-profits, like any other industry, can sometimes be slow to embrace change and innovation that would be beneficial. Automating the tasks that help you manage your donor portfolio is a great example of this. If you can offload some of your more tedious workflows, it frees up time for your team to work on things that are more valuable (and that they actually enjoy).

Just about every calendar and email client now has ways to set rules, automate certain aspects of email communication or scheduling, and create templates to save time, but this is one area where having an actual CRM makes a huge difference. The right donor management software -- like Funraise -- will save you an incredible amount of time on routine tasks and empower your team to excel at the parts of donor management that require a human touch.

Thank You Goes A Long Way

While your donors likely already receive an automated thank you email after their contribution, an important part of donor management involves putting in a little extra effort to show your contributors that you’re truly grateful. They’re probably not giving because they want a pat on the back, but it doesn’t hurt, does it?

How you decide to express your appreciation is up to you, but make sure to keep this activity a prominent part of your donor management system. Consider hosting a virtual event that thanks your regular donors or involves the people who are directly benefiting from their contribution. If a donor’s gifts have helped out a local school, why not have the students there draw thank you pictures? The more creative and thoughtful your sentiment is, the better they’ll feel about contributing and participating and the better chance you’ll have of retaining important donors.

Not Everything Is An Emergency

In most cases, donors are sensitive to the fact that things come up and sometimes extra funds are needed for a project on a last-minute basis. On the other hand, donors are also smart enough to realize that not every fundraising drive is actually an emergency. We’ve all seen the strategy employed by some organizations where each email blast is urgent in nature and calls for immediate action. After a while, these emergencies don’t seem so critical.

Rather than flooding your donors with emails that aim to rustle up donations with an attitude of scarcity, it’s best to approach these individuals from a place of transparency. Many of today’s regular donors are younger (millennials and Gen Z make up the majority of the workforce now), so it’s important to present your cause in a way that shows your commitment to long-lasting change. This is a marketing strategy as well as a donor management tool, but “not irritating your contributors” is a good practice regardless.

An envelope unfolds with a note that says 'You're Invited!'

Send A Virtual Invitation

The attitudes of today’s nonprofit donors have shifted quite a bit in the last several decades. Where it was once thought that people in a position to give money to charity preferred to keep a hands-off approach, now more than ever, those who contribute want to get involved. Especially for donors who care about your cause but can’t give large amounts, this is a great feeling.

To that end, you can take your donor management efforts to the next level by inviting your contributors to get involved. In the era of COVID this can prove to be a bit more challenging, but you can flex your creative muscles to explore virtual options. Have you been working on a campaign that benefits a local group? Try hosting an online video call between a few members of this group and some of your top donors. The opportunity for contributors to actually speak with the people they’ve helped is one of the best ways to engage them in future projects.

There Are No Absolutes

Well, there are some rules to follow when operating a nonprofit, but in a larger sense what we mean is that your donor management system can look however you want it to. You can keep things simple, especially if you’re just starting out, by using Funraise to capture basic donor data and keep your finger on the pulse of your contributions.

Or, if you’re a well-established organization, you can ramp up your marketing efforts and surpass your fundraising goals by utilizing donor segmentation, virtual events, and appreciation programs. Rather than waiting for your donors to be the proactive ones to write you a check, you can position your organization as one that’s at the forefront of making a change.

The ideas in this guide are the essentials and should act as a jumping-off point for your donor management efforts. From getting to know who your donors really are and building personal relationships with them to partnering with other organizations to grow your local presence, your nonprofit can use donor data to truly make a difference. If you’re ready to take things to a new level, check out what Funraise can offer.

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