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August 15, 2020
 
It's Time for Nonprofits to Build Their Donor Base
Robin Cabral
Robin Cabral
Nonprofit are losing donors at an alarming pace, but instead of laying the blame on revamped federal tax laws that limit deductibility of charitable donations, they ought to consider the real culprit: natural donor attrition.

Natural attrition, which long preceded tax law changes that took effect in 2018, typically reduces donor rolls by about 15% per year, and has been driven by many factors, including declining trust in the nonprofit sector, a decline in religious affiliation, and increased consumerism that syphons off donor dollars.

With donor retention across nonprofits in the United States today standing at 48%, the message is clear: nonprofits must act now to rebuild and enlarge their donor bases or face potential extinction.

Here are the top 10 steps smaller to mid-sized nonprofits can take now to broaden their donor bases:
  1. Get your database or get a database if you do not already have one. And Excel is not a database. Without a database, you cannot effectively move your development program and analyze results to make your efforts more strategic and efficient.

  2. Think key metrics. If you do not have a dashboard that looks at key fundraising metrics, both monetary and non-monetary, then stop everything else and put that together now. It should include measures such as donor retention, donor acquisition, donor upgrades, number of qualified relationships, quality of relationships. A dashboard lets you monitor performance and evaluate results in real time, comparing current to past efforts, allowing you to make adjustments as needed.

  3. Begin to build relationships with local community foundations that often house many locally-focused, donor-advised funds and build strong relationships with your current and prospective major donors who can itemize and/or pool their funds in donor-advised funds. Smaller nonprofits should make it a priority to access these funds.

  4. Seek an outside consultant to conduct a development audit of your current fundraising program so that you can obtain an objective third party overview of your current fundraising program and areas for enhancement. Use this audit information to create a robust development plan to ramp up your development efforts.

  5. Invest in donor acquisition efforts, focusing on more effective and cost-efficient strategies that have higher returns such a digital lead conversions and donor engagement journeys. See more on using social media to acquire new donor prospects.

  6. Consider enhancing your current donor’s relationship with your organization through creating and implementing a donor stewardship plan that outlines how you will steward your donors throughout the year for increased donor retention. Create a plan for stewardship moves throughout 2020. These moves should be balanced with the number of solicitations. It's highly recommended to calendar out at least three stewardship touches for each ask.

  7. Upgrade donors through more personalized asks so that you have donors who are interested in deepening their engagement and giving to you as they can. Use things such as customized appeals, gifts strings, and telephone and in-person asks.

  8. Seek to build a major gifts program in any sized shop. You don’t have to be a “big” fundraising shop to begin to start a major gifts program. It can be done in any sized shop. The one caveat is that time and resources must be invested in creating this effort.

  9. Invest in peer-to-peer strategies as a way to have friends and ambassadors share your fundraising with their networks, thus effectively using social proof and reach to expand your donor base. See more on incorporating peer-to-peer fundraising.

  10. Use current special events to build a stronger development program. Use strategies before, during, and after events to begin to identify, qualify, and develop relationships with event attendees so that your development program is growing.
Given that the economic and political climates are always variable, it behooves small- to mid-sized groups to make this the new decade in which they become more responsive, fluid, dynamic, and diversified in their strategies ”“ before it is too late.

Robin Cabral, principal of Development Consulting Solutions, is a certified fundraising executive who works with mid-sized nonprofits to build capacity and improve fundraising results. Email her at rcabral@developmentconsultingsolutions.com or call 508-685-8899.
January 2020
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