The One Thing Nonprofits Don’t Do Well When It Comes to Fundraising
What’s the one thing nonprofits don’t do well when it comes to fundraising?
(I know, I know… Stick with me for a minute)
This is a very broad statement since we know some nonprofits do it well, but generally speaking, stewardship often gets overlooked or downplayed. Organizations spend so much time and resources trying to get new donors that it often becomes an afterthought. This happens despite the fact that we know stewardship is critical to nonprofit fundraising success.
In Dan Pallotta’s talk done at TED2013, he made a staggeringly compelling argument, sighting undeniable statistics, that nonprofits don’t invest enough money into advertising and overhead to see any substantial return on their investments. Focusing resources on stewardship is almost, if not equally, as important.
Let’s look at some real-life scenarios to understand why…
To explain why stewardship is so important, let’s act out a common scene:
(You walk into a store looking to buy a widget.)
Store employee (SE): “Hello, how are you? Can I help you find something?”
You: “I’m good, thank you. I’m looking to buy a widget.”
SE: “Great! We have a wide selection over here. Widget A for $20, Widget B for $50 and Widget C for $100 which is the best option but may be more than you need.”
You: “Hmmm. Do you offer returns or a warranty?”
SE: “We have a 30-day satisfaction guarantee and a 1-year damage warranty.”
You: “Ok, great. I think I’ll take Widget B. Can I pay by credit card?”
You: “Do I use the chip-reader? Or swipe? Oh! Chip. I see.”
SE: “And… You are all set. Your receipt is in the bag. Can I help you with anything else?”
You: “No, thank you. Take care!”
Simple right? You find what you are looking for, you walk to the cashier, you give them your money, and you’re done. Instant gratification. You give money, and you get value. It is easy to quantify or objectify your spend concretely, and if the product doesn’t live up to your expectations, you can simply return it.
Now, let’s play this out as if you were a donor making a gift:
(You’re visiting a nonprofit’s headquarters for the first time.)
Nonprofit Admin (NA): “Can I help you find something?”
You: “Yes, I’m looking to purchase an emotional attachment and an intention of hope, in support of your cause.”
NA: “Excellent! We have an annual fund and a 5K walk-a-thon next month that support our general mission, and we also have crowdfunding campaign to help us build a new facility.”
You: “Great. So what do I get when I make my purchase? And what amount do you recommend?”
NA: “Well, you get to know that you supported our cause. Any amount is fine really, but we’d recommend at least $100, but $500 is better for us.”
You: “Ok. Cool. Well, if I donate to your crowdfunding campaign, I know my money will help build your new facility, so I’ll just do that.”
NA: “Yes, definitely, but know a purchase towards our annual fund would allow us to be flexible and apply your gift in impactful ways to support our mission.”
You: “Oh awesome, what have you done in the past with annual fund money?”
NA: “Sure, I can send you a copy of our annual report from last year, and there are some pictures of the people we’ve helped on our Facebook page.”
You: “Ok…. But where might my money be used?
NA: “Well, it’s unrestricted, but take comfort knowing it’s supporting our overall mission. However, if you do spend over $1,000, we could put your name on something, maybe a chair, in our office.”
You: “Alright, but what if I feel my purchase is being used ineffectively, can I get a refund?”
NA: “Hmmm… Typically we don’t do this. But if you give a lot of money we might be able to add stipulations to the deal.”
You: “I think I’ll just purchase $50 toward the facility campaign. Can I pay by credit card?”
NA: “Yes. Also check, cash, PayPal, or you can put it on layaway with a pledge to pay us later.”
You: “Ok, sounds good. I’ll do credit card. Oh, what’s this fee? I don’t have this fee in other stores.”
NA: “Well, you do, it’s just part of the overall purchase, but we like to highlight the fee. Would you like to cover it as well? It would be fifty-three dollars and twenty-four cents instead of an even fifty dollars.”
You: “Hmm, well, that’s hard because I am not getting anything tangible from this and I’m really being generous. Why are other people taking a portion of my donation? I guess I’ll cover it.”
NA: “Excellent. Thank you. You are all set. Your receipt is in the bag. You can take this to your CPA, and they can tell you whether you get a deduction.”
You: “Ok, great. So when did you say I get to see my purchase in action? I mean, I feel a little better about myself, but it would be great to see something immediately impactful here.”
NA: “Well, I may send updates about the progress of our fundraising. Maybe with some pictures but mostly you’ll just start receiving solicitations for gifts from us.”
You: “Well… I guess… Well ok. Alright, I’ll take your word for it. Let me know if I can do anything to help my money make more of an impact.”
NA: “Ok, thanks for the offer, but we are all good.”
Pretty awkward interaction, huh? Unfortunately, we’re trained early on that when you give money you get something tangible in return. This is not impossible to do in the land of charitable giving; however, there are better ways to provide that tangible, concrete value to donors, and that’s through top notch stewardship.
Ideas for Providing Top Notch Stewardship
1. Give a Simple Thank You Gift
Give supporters something simple in return, that’s cool, unique, coveted, and sought after with limited availability. One great example is PRX’s coin challenge. Yes, your donation income will take on cost, but it’s really cool, and it makes supporters feel like they’re a part of something special – every time they look at that coin (or gift), they’ll feel like they helped your organization and will remember the good you’re doing!
2. Follow up Immediately
Make sure your donors are segmented by size and frequency of gifts, then call or email them accordingly. Do special and unique things for each segment. Just let them know personally that you appreciate them.
3. Use Drip Email Marketing
Use “drip email marketing tools” to provide ongoing communications and information about what you’re doing. Recognize them somehow publicly. Post a shout-out on your social media channels announcing that they gave and you want to thank them publicly (assuming they don’t want to remain anonymous).
4. Request Feedback
Ask them for feedback. Maybe they have thoughts or unique insights into your mission. You can do this through surveys or by asking them directly.
5. Supply Updates
Provide frequent and specific updates on fundable efforts. If they gave to a campaign, make sure you are posting updates about the campaigns and underlying project’s progress frequently.
6. Provide Engagement
Engage your supporters through programs that require their time. Especially if you can tie it to things that they’ve personally funded.
7. Ask for Support
Ask them to observe a board meeting or create a special committee just for your donors and let the engaged and super supportive ones show up and hold a dialog.
The list goes on and on. There are lots of creative stewardship ideas out there, but the most important thing is that you need to do it! You need to do it because you owe your supporters value, and that value comes in the form of communication, gratitude, involvement, and more, all in support of your mission and your projects.
The more you steward, the more value your supporters get out of their “purchase”. If you think about it, it’s one of the only purchases someone can make that continues to evolve in its value, but that only happens through excellent stewardship.
Do you have ideas on how to create “purchase value” for your donors through stewardship? I’d love to hear about them.
Aaron Godert is the COO, VP of Technology, and Co-Founder at GiveGab. Aaron has over 16 years of experience as a technology leader in the entrepreneurship, banking, higher education, consulting, and nonprofit industries. Aaron’s background is in architecting, developing, and integrating large scale distributed software systems. He has contributed to large-scale open source software development projects.
Aaron has a Masters of Engineering in Computer Science from Cornell University, an MBA from Cornell University, and a Bachelors of Science from Canisius College.