Are you struggling with the question of how you can advance your nonprofit’s mission during these challenging and uncertain times? If the answer is yes, you are not alone.
In 2020, many nonprofits faced the reality of significantly decreased revenue while facing the demand to provide more of their services to more people – especially food pantries and those in human services. So, early into this new year, how do nonprofits shift their focus from all of the challenges they are facing to the opportunities that this new year brings?
My answer: focus on your strengths. Use this as an opportunity to try new things, and deeper engage your loyal donors and ambassadors (this is stewardship, my friends).
Bring up stewardship in a conversation with a group of fundraisers and you’ll see both frustration and excitement –occasionally on the same face (yes, and some eye rolling).
Why the mixed emotions? Because retention and engagement are expected. But very often, time and resources are not dedicated to this effort. Additionally, many board members don’t understand how important it is, or what is required of them in these efforts.
If stewardship is not part of your plan, then it’s not a priority for you - and it should be.
Two key findings stood out in the Fundraising Effectiveness Project’s latest quarterly report (released Dec. 22, 2020):
1) The amount of donations outpaced number of donors in the third quarter with donations up 7.6% and number of donors up 6%.
2) Fewer donors gave to the same organization. The donor retention rate of 32.4% YTD is down 4%, resulting in a whopping 67.6% donor attrition rate.
This means if you have 1,000 donors 676 are leaving and if you have 500 donors 338 are leaving every year. Therefore, with a base of 500 donors, you must acquire 338 new donors just to replace those lost, in addition to your efforts on donor and revenue growth. (Sidebar – could this be a factor in the revolving door of development staff often seen at nonprofits?)
There is an answer to this challenge, which will only worsen during these uncertain times, and that solution is to develop a robust retention (stewardship) plan. Furthermore, it costs less in both time and money to retain donors, and the results are sustainable long-term.
I am focusing on retention because it has been vastly ignored. However, it is important to both retain and acquire donors on a consistent basis. So, of course, donor acquisition also needs to be in your plan – fodder for a future blog? Stay tuned.
Now let’s talk about how to create a good stewardship plan and some tools that are needed.
The formula for a good stewardship plan:
Segmentation + Good Data + Targeted Communication = Quality Stewardship
Implementation of a good stewardship practice relies upon segmentation and good data. Lumping your new donors into a communication bucket with your long-time donors is a recipe for donor attrition.
Make 2021 the Year of Donor Retention for Your Nonprofit!
Donors leave because they do not feel heard or valued. Make sure you know your attrition rates and understand why donors are loyal and why they leave –don’t make assumptions. This requires talking with and surveying current and lapsed donors.
Make donor retention fun for you and for your board and committee members. For instance, who doesn’t feel good thanking someone? Implement a thank you call campaign. This will energize your board members to have a great start to their year.
Focus on 3 key areas:
1) Engage new donors so they are more likely to make a second gift,
2) Practice Moves Management, moving donors to higher and recurring giving levels, identify donors who may desire to make legacy gifts, and
3) Deepen relationships with loyal donors and volunteers and assist them to become better advocates and ambassadors.
The secret sauce to this recipe is genuine and targeted communication. Use technology to your advantage, understanding that real connection with your prospects and donors is what will result in successful outcomes.
In conclusion, advancing your mission in hard times will be tough and will take focus. Just know that 2021 brings an abundance of opportunity to those willing to progress regardless of uncertainties and difficulties.