Stewarding Your Way to Success:

A Brief Guide to Donor Stewardship for Nonprofits

JANUARY 2022

Mira Philips, Senior Consultant at The Athena Advisors is our in-house stewardship expert. Here she offers a bitesize guide to stewarding nonprofit donors.

Fundraising for nonprofit organizations requires much dedication, planning, strategizing, and grit. The current landscape is competitive, with so many organizations seeking support. As such, an exciting moment for your nonprofit is when you connect with donors who can aid you in achieving your mission and vision. But what happens once you’ve secured a contribution? The next step is to return to the beginning and continue identifying, cultivating, and soliciting new donors, correct? Not quite.

Sure, you’ll always be on the lookout for new donors, but don’t rely on this as a central part of your fundraising strategy. Stewardship, which begins after a donor has contributed to an organization, is also an essential part of fundraising. Stewardship strategies are intended to strengthen and deepen the relationship with the donor, so that they might be moved to give again, and potentially at a higher amount. The key aspects of stewardship are relationship building, managing the gift, recognizing the donor, and cultivating them for a future gift. However, stewardship can be a daunting process, especially when there are no consistent processes established. Yet, not investing in these processes has immediate negative implications.

Data collected for the Fundraising Effectiveness Project’s 2020 Fourth Quarter Report, reveals that while charitable giving increased by 15.3% in the United States between 2019 and 2020, donor retention rates dropped by 4.1% in that same period. While this number is not alarming, we cannot overstate the importance of stewardship and retention for an organization’s financial health. Best practices state that donor retention keeps organizations fiscally accountable to their donors, saves money, as securing new donors is more expensive than retaining current ones, and provides organizations with a more stable funding base, especially during periods of uncertainty. Moreover, loyal donors can open doors to other funding opportunities. Some of these individuals make up corporations, foundations, and government agencies and might be willing to connect you with members of their network.

According to Dr. Adrian Sargeant, Director of the Centre for Sustainable Philanthropy at Plymouth University, when there is a retention problem, it is typically for the following preventable reasons:

Donors feeling neglected when it appears an organization only reaches out for support
Donor dissatisfaction with the organization’s outcomes
Limited personal interactions between the organization and donors
Poor retention efforts after first gift
Poor communication between the organization and donors

Of course, if a donor is unhappy with your organization’s work, this may not merely be an issue of poor stewardship. However, if your organization is doing great things and donors still express dissatisfaction with outcomes, this may indicate that you’re not communicating your impact properly. The other reasons for donor lapse relate directly to poor stewardship. At The Athena Advisors, we always emphasize to clients that they must prioritize stewardship. Below, we provide some simple Do’s and Don’ts to get you going:

DO create a Donor Pyramid and Stewardship Matrix:

A donor pyramid helps you categorize your donors according to common characteristics and giving levels. This way, you can determine the causes of poor retention, how to best steward donors at their current level and strategize ways to move them to higher giving levels. A stewardship matrix enables you to organize stewardship activities by giving level (e.g., at $1,000, donors will receive a handwritten letter from the CEO, while at $10,000, they’ll participate in a call with a Board Member). This will help your organization establish consistency and avoid errors.

DON’T discount the importance of data collection:

Managing and reporting gifts, ensuring contributions are meeting their intended use, and communicating with donors all require you to collect data. The program team won’t know what kind of information to share with donors if preferences were never recorded, while you won’t be able to send out snail mail if a donor’s address is incorrect. Collect good data from the beginning and update accordingly.

DO communicate with donors about things other than fundraising:

You never want your donors to feel like an ATM. Rather, you want them to be a part of your community. Keep them up to date on important milestones within your organization, non-monetary ways they can engage, and any important changes they should know about. Additionally, sharing testimonials from program beneficiaries is a sure-fire way to keep donors interested. They want to know what is going on, not just how much money they can contribute. Donors at a higher level may also appreciate personalized communications.

DON’T ignore donor communication preferences:

Good communication ≠ more communication. Additionally, your donor pyramid should not be taken as fact as to how you should engage donors at any given level. Rather, it should be used as a general guide. Ensure that you are listening to donors when they outline specific preferences. One way to avoid miscommunication is to reach out periodically and ask your donors how they want to be acknowledged, or the frequency and type of information they want to receive. For higher-level donors, it is prudent to determine these preferences at the beginning of the relationship in writing.

DO establish boundaries:

Stewardship does not mean accepting the donor is right all the time. Sometimes, a donor may ask something of your organization that does not fit with your mission, or outline expectations that you cannot fulfill (e.g., requesting an acknowledgment within a timeframe beyond your capacity). At the end of the day, this is not a customer service relationship, but a partnership that should be mutually beneficial. As such, be mindful of your principles and capacity as an organization when responding to donor requests.

And because we like to end on a positive note, we have one more DO:

DO cultivate a culture of philanthropy within your organization:

While ultimately, the responsibility for fundraising may reside with a few individuals, everyone does have some role to play concerning stewardship. You should endeavor to ensure that everyone understands the fundraising goals of the organization, is aware of the importance of building relationships with donors and knows their responsibilities when engaging with donors.

The goal of stewardship is to develop and preserve meaningful connections between donors and your organization, and demonstrate that from the first gift to their last gift, the organization will be a good steward of their contributions and time. A stewardship plan that is flexible, proactive, and considerate of both donor wishes and your mission, is paramount for your organization’s financial stability and creating a community of supporters. We hope this post provides some points to consider as you look to develop, establish, or improve your donor stewardship plan.

References/Resources

Association of Fundraising Professions (2021). “Giving Increases Significantly in 2020, Even as Donor Retention Rates Shrink.” https://afpglobal.org/fundraising-effectiveness-project-giving-increases-significantly-2020-even-donor-retention-rates

Bloomerang (2015). “A Guide to Donor Retention.” https://bloomerang.co/retention

Fish, Sarah (2017). “Donors Behaving Badly: How to Navigate a Challenging Donor Relationship.” Charity Village. https://charityvillage.com/donors_behaving_badly_how_to_navigate_a_challenging_donor_relationship/

QGiv. “Donor Stewardship: Create Lifelong Donors in Six Steps.” https://www.qgiv.com/blog/donor-stewardship-guide/#what

Shattuck, S (2020). “Donor Relationships: 5 Challenges and How to Overcome Them.” https://anngreennonprofit.com/2020/01/16/donor-relationships-5-challenges-and-how-to-overcome-them/

Shattuck, S. (2020). “4 Effective Stewardship Opportunities During a Pandemic.” NonPRofitPro. https://www.nonprofitpro.com/article/4-effective-stewardship-opportunities-during-a-pandemic/

University of Georgia Donor Relations & Stewardship (2019). “FY20 UGA Stewardship Matrix.” https://issuu.com/teamstewardship/docs/3._drs_stewardship_overview_fy20_matrix_b