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For 2022: Better Stewardship Yields Better ROI

Posted: 1/3/2022

by Allan Burrows, CEO

The recent Fourth Quarter Report from AFP's Fundraising Effectiveness Project (FEP) on donor retention is disturbing. The report states, "The overall 2020 donor retention rate was 43.6%, a 4.1% drop from the 2019 rate of 45.4%."It is the lowest donor retention rate since FEP started tracking in 2007. As we close out 2021, the emerging data results don't look better. Survey after survey reveals that the primary culprit of this downward trend is not the donor; it's the nonprofit and its lack of communication and stewardship.

How do we reverse this trend? Let's resolve to make 2022 the "Year of Stewardship!"

As a sort of family experiment for the past several years, I have been observing the stewardship practices of the charities we give to each year. What I have discovered with my family's philanthropic habits is this: the better an organization is at stewardship - regardless of its mission - the more likely we will repeat and/or increase our donation in the coming year(s). Conversely, the weaker the nonprofit is at stewardship, the more likely we diminish or discontinue our giving over time - regardless of its mission.

My family gives to 8-10 causes annually. Each are dear to our heart, our values, and are impact-driven and good stewards of their resources… and they ask! (This excludes any capital gifts that we make in any given year, nor does it include in-kind nor volunteer hours.) While we give generously with no expectation to receive (so to speak), we do seek a relationship with the nonprofit. We expect personal, meaningful "thank yous," especially for our larger donations, simply out of courtesy and courtship.

In other words, people who give generously are seeking a relationship with the nonprofit they support. Understand this: donors are not giving to the nonprofit itself; rather, they are giving to the mission the agency serves. (e.g., donors don't give to a homeless shelter agency, they give so that the agency can provide shelter for the homeless. Hear the difference?)

The greatest gesture a donor makes is with a gift, which begins or continues the courtship cycle type connection between the nonprofit and the donor. Donations reveal "I am interested in your mission!" Nonprofits have two primary responsibilities with the gift:

1) steward the gift and demonstrate impact, and

2) steward the donor with thank you and communicate how their gift made an impact.

It's that simple!

In 2022, make your stewardship efforts equal your solicitation efforts. If you do, you will see a marked increase in retention rates, increased gifts, and, most importantly, with connected and happy donors! How?

  1. Pay more attention to stewardship than solicitation. It takes just a few minutes to ask someone for a gift. It takes much longer to nurture the relationship; to cultivate and educate and steward the gift.
  2. Create a journey map for your major donors. (Journey Mapping is a skill CapDev teaches and can be applied to donor relations, stewardship… anything!) Make it a focus to have regular meaningful conversations and regular communications with them.
  3. Engage others in the relationship. Have board members email, call or write donors and thank them for their generosity. Carve time out each week to call donors just to say hi and share a story of how their gift has recently made an impact.
  4. Measure stewardship results. Keep track of your communications and how donors react. See if your increased touches yield increased financial results either in larger gifts or more frequent ones. Tweak your plans based upon results.

As we enter 2022, let's make a New Year's resolution to be the best stewards we can be. The results will be rewarding to both the donor and to those you serve! Happy New Year!

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