LeadingAge Magazine · May-June 2017 • Volume 07 • Number 03

Donor Stewardship for Mission and Stability

May 15, 2017 | by Jack Curtis

For nonprofit providers, building long-term relationships with donors is crucial to successful fundraising and preserving long-term stability.

Fundraisers often say their craft is a process—it follows a loop that generates contributions to fuel the mission. The commonly cited steps are identification, involvement, cultivation, solicitation—and depositing the donation. But the process shouldn’t end there. There’s another step that is too often an afterthought: donor stewardship. It’s a strategy that closes the loop—and stimulates the process anew.

In donor stewardship, an organization pursues an ever-stronger relationship with the donor and works to deepen and preserve that relationship over time. This requires the development and implementation of a plan for acknowledging, communicating and interacting with donors so that their support is solidified.

There are 2 streams to donor stewardship. The first is an administrative function of the organization that seeks to ensure that donor funds are used properly. The second type of stewardship is a donor-facing, external function, a time- and energy-consuming effort that can generate increased retention and higher giving.

Stewardship is built upon the act of building relationships. In 1992, Ken Burnett’s influential book Relationship Fundraising kicked off the approach of “donor-centered fundraising.” Burnett stressed building durable, progressively deeper relationships between an organization and its supporters as the best way for nonprofits to ensure financial health from year to year.

By the Numbers

The Association of Fundraising Professionals (AFP) and the Urban Institute’s 2017 Fundraising Effectiveness Survey sheds light on the current state of donor retention. Based on data received from 10,829 participating nonprofit organizations, the study found that only 45% of 2015 donors made repeat gifts to participating nonprofits in 2016. Every 100 donors gained in 2016 were offset by 99 lost donors through attrition. The gift or dollar retention rate was 48%, i.e., only 48% of 2015 dollars were raised again by participating nonprofits in 2016. Over the last 10 years, donor and gift retention rates have consistently been weak—averaging below 50%.

Shell Point photo
The Legacy Foundation at Shell Point works to understand
the needs and wants of donors and match their passion
to Shell Point’s mission. Photo courtesy of Shell Point.

(The Fundraising Effectiveness Survey has Excel-based tools that nonprofits can use to measure fundraising gains and losses.)

To address this lurking challenge, nonprofits too often ramp up their efforts to recruit first-time donors. “People are in a constant mode of trying to win new donors and keep them. Donors that give only on an annual basis, once or twice. That’s not going to sustain a program,” observes Jeff Cory, executive director of The Legacy Foundation at Shell Point, affiliated with Shell Point Retirement Community of Fort Myers, FL.

The viability of an organization is best sustained by donor-centered actions. “Win, keep, lift donors” is Cory’s mantra.

“The for-profit sector recognizes the importance of long-term relationships with its customers,” says David S. Goettler, chief executive officer of Goettler Associates, a fundraising consulting company in Columbus, OH. “The fundraising industry is finally realizing that maintaining the relationship between donor and organization is the key to maintaining effective support.”

“If you’re not doing it, you’re shooting yourself in the foot,” observes Nelson Rumore, executive director of the Lakeview Village Foundation, which is affiliated with Lakeview Village, a life plan community in Lenexa, KS, and Ridgeview Village, an affordable housing community in Olathe, KS.

The Basics of Donor Stewardship

There are a handful of key tenets that both development practitioners and fundraising consultants agree should inform and drive a donor stewardship plan.

It’s cheaper and easier: It costs less to retain and motivate an existing donor than to attract a new one. Nonprofit Quarterly reported that new customers/donors cost a nonprofit up to 5 times more than returning ones.

To play on a for-profit sales adage, “your best donors are your current donors.” They are the “birds in hand” and need to be nurtured.

A prompt thank you: Small or large, every gift deserves a quick thank you. The Council for Advancement and Support of Education recommends that it come in the form of a handwritten letter. A note of gratitude opens the path for relationship building.

Know your donors—speak to their passions. Fundraisers need to learn what makes their donors tick. What connects them to your organization? How much engagement do they prefer? What are their philanthropic goals? The way Cory sees it, “Nonprofits have always been good at sharing their needs, but not so good at looking at the needs and wants of their supporters. Donors today are more inclined to say, ‘Hey, do you have something that does x, y and z? Because I want to do that and I want to do it through you.’”

“People are more than willing to talk about themselves,” says Rumore. “People want to tell their story. They want to be heard. Find out what they want and expect. Learn about their values, what interests and motivates them.”

With this knowledge in hand, he states he can turn to the prospective donor and ask, “May I help you make a gift that reflects where your heart is?”

According to Cory, “You have to tap into (the donor’s) passion and then match it to your mission.”

Lakeview Village photo
A Lakeview Village resident in the art room the
Lakeview Village Foundation helped fund with its
Community Center capital campaign. Photo
courtesy of Lakeview Village.

“Giving is about the donor, not about your organization or your cause,” maintains Simone Joyaux of Rhode Island-based Joyaux Associates, and author of Keep Your Donors. “Fundraisers must recognize their organization is the conduit by which donors live out their interests and disinterests, their motivations and aspirations.”

Getting to know donors, up close and personal, can help fundraisers develop the appropriate opportunities for the donor to learn and connect.

Report, report, report: Show the impact of donations. Communication and its corollary, transparency, are the key ingredients of donor stewardship. Today more and more donors expect and want to know how their donation has fared, the good it has sparked.

“Keep your donors happy and satisfied,” says Cory. “It’s important for them to know your organization is as careful with their money as they would be. You have to keep people informed once they’ve made a gift: ‘Here’s what your gift has accomplished.’ Share data that show an increase in value. It’s following through with what you said you were going to do.”

As Rumore says to his donors, “We’d like you to know what we’ve been able to do thanks to your generosity.”

According to Goettler, “We have to recognize that donors have needs and that people don’t give away money, they invest it. Report on how their gift was used and your donor will have achieved ‘success.’”

Keeping donors educated and informed is a key way of making them feel valued. To foster long-term engagement and investment, donors need to be recognized sincerely and substantively, in various personalized ways, from CEO visits to site tours, from recognition events and engagement activities to donor rolls and named spaces.

Get donors involved: Engage the hearts, minds and bodies of prospective and current donors, and the established relationship will build on itself over time. Contributors need to be presented with opportunities for deeper involvement with the nonprofit via events, volunteering, advisory roles and board membership.

Ethical Fundraising With Seniors


Fundraising Within a Community

Both Cory and Rumore focus their fundraising activities exclusively on their residents.

“When you live in a retirement community, such as Shell Point, donors have a vested interest in donating to, for example, our health care program or our skilled nursing community, because they may be the beneficiaries of the contribution.

“They’re part of our family. They live here every day. If someone goes to the hospital for a couple of days or a week, when they return they often want to give back as a grateful patient because the hospital served them well.

It’s a benefit we in retirement communities have. We get to rub shoulders with people every day and provide them with an outstanding experience that inspires them to give.”

The Essential Intangibles

It’s instructive to note that when Joyaux, Cory, Rumore and Goettler provide their definitions of donor stewardship, their responses are distinctly heart-felt.

For example, Cory notes, “First and foremost, it’s integrity, really part of the DNA of an organization, that people can trust your word when they make contributions. People give to people.”

Stewardship for Rumore amounts to “honestly and genuinely thanking donors and telling them how their gift was used and how it was important to the project or campaign.”

Donor-centered fundraising, proclaims Joyaux, recognizes “that donors give in order to fulfill their aspirations.”

Goettler observes, “It’s more a quest rather than [a] destination; you’re never really done. [It’s] not just an act, but an ongoing circular process.”

Relationship building builds the loyalty that assures a nonprofit’s future. Conscientiousness and commitment are the core of donor stewardship. This proven, human-centered approach calls for going the extra mile … and then going a mile or 2 more.

Jack Curtis is a writer who lives in Brookline, MA.