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Donor Relations: Ultimate Guide to Donor Relationship Building

July 17, 2022
8 minutes

Nonprofits are the experts in donor relations, right? Well, yes, of course! But one thing that we learned in our time in the nonprofit world is that there are as many answers to questions as there are people. Another thing that we've learned is that it's really valuable to hear others' perspectives. With that in mind, here's our answer to the question, "What is donor relations?".

What is donor relations?

Donor relations is all the efforts a nonprofit makes to acquire, retain, and engage with donors. It is personalized relationship-building, and so it is different for every organization and every donor. Successful donor relations efforts yield lasting relationships, thanks to happy donors who stick around.

While donor relations is a highly personal process that requires a human touch, technology can still lend a helping hand. Great donor relations are focused on the individual donor, and that means keeping track of every detail, from their address to when their dog’s graduating from obedience school. A donor CRM can help with that, allowing every member of your team to document donor data and details with ease. Delightful!

Donor stewardship definition

Donor stewardship is all the efforts a nonprofit makes to engage with a donor based on their giving. So, the process of donor stewardship doesn’t begin until after a supporter has made a donation. Stewardship activities often focus on ensuring a gift is used as the donor intended.

The stewardship process usually includes several key steps, such as sending a gift acknowledgment letter, confirming the donor’s expectations for the gift, and reporting back to the donor on the gift’s impact.

Donor relations and stewardship: what’s the difference?

Donor relations and stewardship are inextricably intertwined, but they’re not one and the same. Whereas donor relations is proactive relationship-building done consistently, from the beginning, donor stewardship is reactive relationship-building, done in response to a donation. In other words, donor relations = donor; donor stewardship = gift.

When you’re doing donor stewardship right, it’s a part of donor relations. Let us set the scene. You’re already connected to a lovely donor thanks to your amazing donor relations strategy. Now, they’ve given you a generous gift! So, you begin the donor stewardship process, stewarding their gift by ensuring it goes to the right place and the donor feels satisfied with its use.

Donor relationship key areas

Nonprofits are built on a foundation of donor relationships, each one a little block of support that contributes to your mission. If you want to spread your nonprofit wings and soar like a beautiful butterfly (well, now we’re just mixing metaphors), you need to nurture every donor relationship, and that means knowing donor relations best practices. Let’s break down the donor management process to ensure a ⭐⭐⭐⭐⭐ donor experience for every supporter.

Initial meeting

You only have one chance to make a first impression, so this is a crucial area for every new donor relationship. Maybe it’s at a fundraising event or maybe it’s when you’re grabbing your daily espresso at the local coffee shop. Either way, don’t waste the opportunity. Nail down your elevator pitch and preach the gospel of your cause. Then, make a plan to follow up.

Acknowledgment

Once your new buddy has made their first gift, send a prompt, personal, and enthusiastic thank you (we like to do it within 48 hours, but 24 is even better). Remember that donor appreciation is a long-term commitment, so thank every donor for every gift, no matter the size and no matter how often they give.

Stewardship

Once you’ve expressed your gratitude, you want to confirm that this gift is going exactly where the donor wants it to go. No crossed wires or false expectations here—no sirree! Proper stewardship is essential to building trust, especially with a new donor. But by keeping it real with your donor communications in the long term, you’ll have a (generous) friend for life.

Recognition

In addition to thanking donors through gift acknowledgment letters, many donors like to be recognized in other ways. Now, we’re not saying you need to erect a solid gold statue in front of your office (but we bet some folks would realllyyyy like that). By donor recognition, we just mean shouting folks out in your annual report or putting their name in your fundraising event program or even on social media. Here, it’s really about making the effort.  

Feedback

A solid relationship is built on authenticity, so getting honest feedback from your donors is great for building relationships. Send a survey after your latest event or ask supporters to fill out a brief poll on social media about your communications. People like to share their opinions, so it will make them feel valued and included. And, as a bonus, you get lots of juicy info for your donor database.

Cultivation

Once a donor relationship is solid, you can’t just walk away and hope for recurring gifts for the next 150 years. (What? Zombies can give gifts, too!) No, you need to nurture that relationship, making a phone call to check in every few months, grabbing an annual coffee, and brainstorming unique ways to connect your donors (especially your major donors!) to your cause and keep them engaged. All told, donor relations is similar to any sort of relations. It requires both people to be invested, to do their part, and to show up.

The importance of donor relationship building

As you can see, donor relationship building is a multifaceted, long-term commitment. Happily, it’s worth it! Because solid donor relationships lead to a solid nonprofit organization, doing a more-than-solid job at making the world a better place. How important is donor relationship building? Let us make a bulleted list of the ways …

  • Improve donor retention
  • Hold better events
  • Increase recurring donations
  • Acquire new donors
  • Learn what’s working
  • Expect the unexpected
  • Build your network

Improve donor retention

This here is the number one value proposition for donor relationship building: donor engagement increases donor retention rates. By forging strong relationships with your current donors, they’re much, much more likely to donate again and again.

Hold better events

Once you’re besties with your donors, they’ll be much more likely to tell you all their secrets—like what types of events they really want to attend or what auction items would make them write a blank check. Better events mean better event attendance means better returns.

Increase recurring donations

We all love a major gift, but recurring gifts are also pretty swell. They give you a predictable source of revenue and set you up for some much-needed stability in the volatile nonprofit world. If you’ve been successful in your donor relationship management, your donors will feel appreciated and connected. In turn, they’ll want to increase their involvement over time. Often, that looks like moving from once-in-a-while donations to monthly donations.

Acquire new donors

Your donors know lots of other people, and every one of them is a prospective donor (who knows even more prospective donors! Trippy, huh?). Once they get to know you and your work, they’ll bring others into the fold.

Learn what’s working

Donors are a font of free feedback, and you’ll reach a point in your relationship when you can ask them, honestly, what’s working and what’s not. Their insights will point the way to improved communications, events, and strategic planning.

Expected the unexpected

Sometimes, a major donor ghosts you, and you never hear from them again. And yeah, it’s devastating. On the other hand, sometimes a smaller donor leaves you the bulk of their wealth. When that happens, it’s not out of the blue—it’s because you put in the effort to build the relationship. With donor engagement, you build something truly special with your donors, and you never know how that might play out (or pay off) in the long run.

Build your network

Everyone has people and businesses they turn to in a crisis, and with strong donor relationships, you’ll have access to dozens (or even hundreds) of networks. Need a last-minute caterer for your luncheon? We bet someone will have a hook-up.

7 ways to improve donor relationships

Sometimes, a relationship needs a little help. Maybe you’ve been busy, and that monthly happy hour has fallen by the wayside. Or perhaps you find yourself scrolling through Instagram instead of making eye contact. It happens to all of us, and that includes donors. When your donor relationships need a nudge to get back on track, we have a few tips.

  • Pick up the phone (or the planner)
  • Automate your communications
  • Segment your donors
  • Get them more involved
  • Ask for feedback
  • Hire a donor relations professional
  • Hold an appreciation event

1. Pick up the phone (or the planner)

If one of your beloved donors goes radio silent or ceases their regular donations, it’s time to kick things up a notch. Pick up the phone for a live check-in or ask them out on an actual, in-person coffee date. Nothing revives a droopy relationship faster than a personal touch.

2. Automate your communications

Solid donor relationships are built on consistency, but sometimes, life gets busy and things fall through the cracks. But by using your CRM to automate communications, you ensure that every donor gets regular updates and asks. And while you’re automating things, don’t forget to set some reminders for personal check-ins, too!

3. Segment your donors

To give those vital communications a more personal touch, we suggest doing some donor segmentation. It will allow you to customize your outreach based on donor interests, so that every supporter feels like you’re listening. If that isn’t some great relationship building, we don’t know what is.

4. Get them more involved

Sometimes, giving money feels impersonal. If you see your donors drifting, invite them to engage more directly with your cause. Ask them to volunteer, join a committee, or host a fundraising event. Once they feel truly connected to your organization, they’ll want to keep the giving going.

5. Ask for feedback

Everyone likes to feel valued, so asking for feedback is a prime way to build a donor relationship. You can ask for more general feedback, like what they think of your communication cadence, or direct feedback, like what it would take to get them to join your board of directors.

6. Hire a donor relations professional

If you’re experiencing rapid growth and/or have the resources, having a full-time donor relations manager can really improve your donor relations efforts. Having someone to answer any donor question will make every supporter feel, well, more supported! Plus, they’ll keep your donor pipeline strong for the future.

7. Hold an appreciation event

What better way to improve relationships with your donors than a designated donor appreciation event? Host a luncheon or a wine tasting or a puppy-cuddle-a-thon. Then, shout your gratitude far and wide, sharing how your donors have made an impact and how they can keep helping in the future.

Final points

Just like personal relationships, donor relationships take work. At the end of the day, here’s what you really need to know.

  • Donor stewardship and donor relations are often used interchangeably, but donor stewardship is a part of donor relations. Donor stewardship starts after a donor makes a gift, while donor relations is the entire relationship-building process.
  • Donor relations are important for increasing donor retention, recurring gifts, and new donors. Plus, you never know where your next major gift will come from.
  • Solid communication is at the heart of donor relations. Reach out consistently, personalize your outreach, vary your asks, and, occasionally, get offline and pick up the phone.
  • CRM software can help you segment your donors, automate communications, and track every interaction, leading to improved donor relationships.
  • Get everyone at your organization involved in donor relationship building so that each donor feels connected to the whole organization—not just one individual.
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