Always Say “Please” and “Thank You”: How Your Organization Can Use Donor Recognition Strategies to Maximize Fundraising Opportunities

With so much to focus on during a fundraising campaign, donor recognition can easily be overlooked.   However, a sound donor recognition strategy can create valuable fundraising opportunities in both the short-term and the long-term.

Recognition Pays Off

Everyone likes to be recognized.  Some recent anecdotes and research from the nonprofit sector help underscore just how valuable donor recognition can be.   Here are just a few examples.

A September 15 article in the Nonprofit Times highlights how personalized donor recognition can provide a much-needed boost a fundraising campaign.  The article cites the example of KCSM, a community jazz radio station in the San Francisco Bay Area.  As part of a fundraising campaign, KCSM targeted lapsed members, offering them a chance to renew their membership in exchange for a personalized gift.  For their donation of $80 (twice the amount of an ordinary donation), donors were given a KCSM T-shirt with their name on the back, along with the names of jazz legends like Miles Davis, Charlie Parker and Duke Ellington.

According to the Nonprofit Times article, “[t]he Legends of Jazz campaign raised $42,400 from 577 donors, with 200 donors giving at least $80, for a response rate of almost 6.5 percent. The average gift was more than $100 and the campaign’s overall Return On Investment (ROI) was 204 percent.”

The article also cites a study by M+R Strategic Services in Washington, D.C., which tested the effects of gifts or premiums to prospective donors.  The survey focused on donors to the following organizations: Easter Seals, Human Rights Campaign, Save Darfur Coalition and The Wilderness Society.  The premiums that were given out included scarves, calendars, T-shirts and blankets.

The M+R study found that donor recognition in the form of gifts and premiums had a strong correlation with overall giving.  When a premium was offered, response rates increased by 95 percent and the average gift increased by 37 percent.  Even when the cost of the gift or premium was taken into account, the nonprofit was still better off.  Three of the four nonprofits in the survey netted more when premiums were offered, and overall net dollars per recipient were 51 percent greater when a premium was offered.

Possible Recognition Strategies

So what are some donor recognition strategies your organization can use?  Other than the sort of gift and premium ideas discussed earlier, the following are some good, general strategies that will help you ensure that your donors get the recognition they deserve:

1.       Tell your story. Your donors want to know exactly where their money is going.  Put yourself in a donor’s shoes for a minute.  Whether you’re a public radio supporter giving $50 in a telethon or a large foundation offering a sizable grant, you want to make sure that your contribution is being used for its intended purpose.  When it comes to donor recognition, job number one is to tell your donors about all of the good things you are doing thanks to them.   In addition to the traditional thank you letter, you might want to consider phone calls, email updates, sending pictures of your projects and programs, and even using social media such as a blog to reach out to donors in a relevant, timely manner.

2.       Keep track of the details and be transparent. In today’s post-Enron, post-Bernard Madoff business culture, trust and credibility are more important than ever.  The best way to build trust with donors is to be meticulous about budgets, statistics, and other details and then to share this information with your donors and, where relevant, with the public.  It’s a great way not only to quantify and highlight the impact you are making but also to set yourself apart as an efficient and trustworthy organization.

3.       Recognize loyalty. If your organization conducts ongoing fundraising campaigns, take a look at the number of years each donor has been making contributions.  You should consider developing a recognition program based on the number of years a donor has contributed to your organization.  A loyal donor who makes small contributions now may one day be in position where they can make a much larger donation.  The only way to ensure that their largesse benefits your organization is to recognize their loyalty at the present moment.

4.       Stay in touch. It should go without saying that regular contact is one of the most important aspects of donor recognition.  You shouldn’t wait until the next fundraising cycle to contact your donors.  Invite past donors and potential donors alike to tour your facilities or attend your programs and events.  Your board members and staff should recognize the importance of networking, and that it’s just as important in the nonprofit sector as it is in the for-profit sector.

Your Contribution –Satisfaction Guaranteed?

If you buy a blender and it doesn’t work, you expect to be able to take it to the store where you bought it and get your money back.  But what if you’re a donor and are unhappy with a contribution you made?

Donor recognition and satisfaction are so important that one organization, Global Giving, has taken their donor satisfaction strategy  a step further and is actually offering a “money back” guarantee similar to one you would find at a retail store.  According to the “Global Giving Guaranteed” page on the organization’s website:

“Any donor who makes an online contribution at GlobalGiving.com and is not satisfied with their giving experience may invoke the guarantee by phone or email. Subsequently GlobalGiving will refund the donation in the form of a gift certificate equal to the value of the original donation, which the donor can contribute to a different project on the site. The Guarantee can be activated at any time within a year after the original donation has been made, up to $10,000 per year, per donor.”

(Interestingly, Global Giving cannot return gifts in cash but must instead use gift certificates because IRS Rules prevent 501(c)(3)organizations from giving charitable donations back in cash.)

We recognize that Global Giving’s strategy is a radical one and probably doesn’t make sense for most nonprofit organizations.  We only mention it because we think it’s a great example of just how important donor recognition and satisfaction really are—especially in today’s economy.

Conclusion

In a highly-competitive fundraising environment, you need to do everything to make sure your donors are satisfied with their contributions and feel that they have been adequately honored and recognized.  If you take the time and apply some of the basic principles discussed in this post, you will hopefully start to see the positive impact that successful donor recognition strategies can have on a fundraising campaign.

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1 comment so far

  1. Donna Ann Harris on

    I work with community based organizations doing downtown revitalization work around the county, and your post about diversifying income sources hit home for me. I have found that my clients, who are small, Main Street and downtown organizations, are completely focused on large government grants, which I think is at their peril. I would rather they diversify their funding sources so that they can get at least 50% of their funding from membership, fundraising events and sponsorship. At least they can control the input of their effort and adjust if the output if their membership campaign for example, is not generating the support they hoped. Great blog. Check out mine at http://www.heritageconsultinginc.wordpress.com. Donna Ann Harris


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