There was a time when nonprofit stewardship was all about the money. How was the money managed? Was it used for the purpose for which it was intended? During the last couple of decades stewardship became more about the donor. Was the donor properly thanked so that they would make a second and a third gift? Were donors being engaged?
The money was not lost in this change because donors want to receive a timely thank you and they want to know what happened to their donation. Was the gift utilized as promised and what was the impact? Research by Penelope Burk and Adrian Sargeant, dating back to about 2001, has demonstrated this over and over again.
The current definition of stewardship is what a nonprofit organization does to, with, and for a donor after the donor has made a gift. The keys to stewardship are communication and engaging the donor.
Why does donor stewardship matter? Good stewardship serves many purposes beyond the very simple fact that it is the right thing to do. Besides expressing gratitude and appreciation, stewardship can:
• Set the stage for the next ask
• Motivate the donor to increase their next gift
• Help build the relationship between the donor and the organization
• Further engage the donor
There are two documents that help provide structure to the stewardship process. The first is a gift acceptance policy and the second is a donor recognition policy. Because the donor recognition policy has the greatest impact on donor retention and increased donor giving, most nonprofit organizations will focus on it.
For donor stewardship to be successful, an organization must have a donor recognition policy that very clearly establishes how and when a donor will be thanked for every gift that is given. The donor recognition policy includes everything from grandma’s tea service to thousands of dollars.
Organizations need to write a policy and review it at lease every other year. Many policies today do not take into consideration cryptocurrency or donor-advised funds. A nonprofit’s donor recognition policy should be written based upon the many possible opportunities for charitable donations. You never know when a donor might want to give you stock. Do you have a policy for managing and recognizing stock donations? Tools like DonateStock can make the process of accepting stock so much easier.
The donor recognition policy must have board approval. This protects both the donor and the organization from a misunderstanding regarding how a donation will be recognized. Having a board-approved policy also provides consistency in how donors are recognized. If a donor asks how they will be recognized, the policy can be provided to them.
A donor recognition policy is a wonderful tool as it demonstrates transparency to donors. It can also motivate donors to both make and increase their next gift. The policy can act in many ways like the donor pyramid in helping to move donors toward more engagement and larger gifts
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Donor stewardship, as encompassed within the donor recognition policy, can take many forms:
• Phone calls
• Formal thank you letters
• Handwritten notes from board members
• Program updates
• Listing in publications
• Donor walls
The last two items go in and out of fashion. You need to have permission from donors to use their names in publications or on a donor wall. Using these two items will depend upon the culture of philanthropy at your organization.
The following activities provide the means to thank donors and to engage them. These are more impactful stewardship activities as they are more personal. They can be used with any segment of an organization’s donors. They tend to be utilized with donors at $500 plus giving levels.
• Invitation for a site visit
• Donor giving circles
• Donor recognition event
• VIP event
• Personal stewardship coffee
Donor stewardship is all about communicating gratitude to the donor and taking the time to understand why they support your nonprofit organization. Having an activity, such as a VIP event with dessert and coffee at someone’s home, enables the organization to learn why a donor supports your organization. Stewardship is about trust and engagement, not just money. If a donor feels a sense of community and belonging, they will continue to support the organization.
Donor stewardship demands that the thank you to a donor is timely, within 48 hours of the gift being received, and expresses sincere gratitude. Providing information regarding the impact of the gift will encourage donors to give again. All donors should receive a thank you letter. If an individual takes the time to write a check or go online to make a donation, the very least they should expect is a kindly worded personal thank you letter.
As an organization develops a stewardship program, it will be important to determine what information needs to be managed in the organization’s CRM. Developing a system for tracking information including which thank you messages have been sent will be critical. This will enable the staff to create meaningful reports for the board regarding the contacts, their giving history, and reference notes.
Although the nonprofit staff is inherently responsible for donor stewardship, participation by board members takes stewardship to a higher level. Board members can call and thank donors or write thank you notes. They can also host a VIP event in their home. What the donor sees is a fellow community member extending themselves to make a difference.
A thoughtful and robust donor stewardship program is a remarkable tool for engaging donors, enhancing the organization’s donor retention numbers, and raising even more money.