As a nonprofit, you are dependent on external donors to provide you with funds and donations that will help you and your cause. This can often cause quite a bit of stress, especially if you don’t know from where or when the funds will come through.
Financial management, specifically donor management, is key to creating a successful non-profit. You want to look at donor retention rather than sporadic bursts of income. It will give your non-profit the legs to really follow its cause and make a difference.
You’ve probably heard the concept of a monthly retainer over and over again. Well, think of donor retention as something quite similar. For non-profits, donor retention is the measure of existing donors who continue to give and contribute to your organization.
It’s like having long-term supporters or fans who come back annually and are invested in the growth of your non-profit.
If you have a low donor retention rate, you usually end up needing larger once-off donations or gifts, to get you through those quiet times.
So trust us, donor retention is something you definitely want to see and accomplish in your non-profit.
People don’t want to feel taken advantage of. There is nothing worse than donating to a non-profit and never hearing from them again. The key to a high donor retention rate is building a relationship with your donors, and making it personal.
Show your donors that, just like they are invested in your cause, you are invested in them. Focusing on your donor experience is essential for building long-lasting relationships. Understand your donors and who they are. See them as part of a system that deepens the value of your non-profit.
Some examples of strengthening your relationship with your donors could be:
Get transparent and show your donors the value they are bringing to your cause. People really want to feel as if they are part of something that makes a difference in the world. When they feel uncertain about how their money is being used, they may hesitate to donate again.
Send out weekly newsletters that have impact stories embedded into them. This will not only keep the line of communication open on a weekly basis but show donors the impact of their contributions.
Other ways you can show the impact you have is through using social media and video reports, as well as quarterly, biannual and annual feedback reports. Also consider posting regular updates on your website so that donors can easily find information on your initiatives and how their funds are being used.
We’re living in the digital age so make sure you take advantage of technology to streamline your donor management.
Use technology to help smoothen out your systems and automate your donor data. You need to know who your donors are, how much they are spending, and how long they’ve been donating. You need to know who leaves and who stays and why.
Tracking this information makes building relationships with your donors easier. Your time isn’t taken up by trying to collect information or losing track of who is actually part of your system. You can focus on the people partaking in your organization and make sure that they get the full advantage of working with your cause.
One of the best ways to boost donor retention is to offer the choice of setting recurring donations. This makes it easy for your loyal donors to continue to support your organization without any effort or manual payments on their side.
Donors may want to continually support your cause but don’t want to go through the admin of making a payment every month or year. So, allowing for recurring donations keeps these donors onboard for longer.
There is no better way to build your donor relationships and transparency than by asking for honest feedback. This will open up the conversations as to why your donor participated, and what worked and what didn’t work.
You can learn what they like and don’t like about your initiatives, processes, and organization as a whole. As a result, you get an opportunity to constantly improve and encourage honest conversations that enable you to enhance donor experience. In turn, this will boost donor retention.
By asking for feedback, your donors will also feel validated and more involved in your NPO. But don’t just leave it at the feedback, schedule a time and a plan to start implementing changes and step it up.
It’s not just about pleasing the donor, it’s about creating a non-profit that serves its cause and donors.
Everyone loves to get a little dressed up sometimes and to be invited to an event. Your non-profit does not have to be run separately from your donors. Perhaps once or twice a year, schedule an event where you can showcase what you do and where your donors can have a little fun while supporting a good cause.
An event - whether it’s a casual event or black tie - allows your volunteers and donors to connect. It also allows your non-profit to connect to more people. People can see physically what your organization does and how they can best help it.
Working as a nonprofit often has you dependent on others to accomplish your vision. But getting others on board and growing your community can be such a wonderful experience.
Donor retention is not about begging sponsors and donors to come back to you over and over again. It’s about showing them why they want to come back and invest in your non-profit. Setting up your nonprofit for donor retention will also help you get more organized and create strong, effective workflows.
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