Donor Stewardship: Your Guide to Engaging & Retaining Donors

Donors who feel valued and appreciated tend to stick around for the long haul. While the average donation retention rate is just 43%, there are steps nonprofits can take to retain supporters through donor stewardship.

Donor stewardship focuses on building long-term relationships with your supporters. When done correctly, it helps to cultivate repeat gifts and engage donors.

In this guide, we’ll cover everything you need to know about donor stewardship, including:

• What is Donor Stewardship?
• The 5 Stages of Donor Stewardship
• How to Create a Donor Stewardship Plan

Let’s start with the basics!

What is Donor Stewardship?

Donor stewardship is the relationship-building process that occurs after a donor supports your organization.

Stewardship is a subset of your donor relations strategy. Donor relations ensure supporters have a positive experience with your nonprofit as a whole, whereas donor stewardship is focused on providing a positive giving experience.

Stewardship relies on continuous communication and engagement to thank donors properly and put their gifts to good use. When done correctly, it can help your organization:

• Cultivate repeat gifts
• Increase donor retention
• Reduce donor churn
• Raise the lifetime value of gifts

Donor stewardship is all about keeping your donors passionate, eager, and willing to support you for years to come!

The 5 Stages of Donor Stewardship

1. Gift Acceptance

Once you receive a donation, your organization should have a proper procedure in place to accept it. This is where a gift acceptance policy can help.

A gift acceptance policy manages the expectations of donors and guides your nonprofit through the process of asking, receiving, and accepting donations. Specifically, it creates an efficient method for:

• Reviewing each gift to ensure it can be used the way the donor intends.
• Deciding how gifts will be handled if they can’t be applied the way donors expected.
• Tracking gifts so you can follow how each one was used.

If there are specific types of gifts that your organization can accept, it’s best to outline them in a clear, written policy. Donors will appreciate this transparency.

2. Acknowledgment

Donor acknowledgement ensures your organization is legally compliant.

The IRS requires nonprofits to send a formal donation receipts letter to donors who give a contribution larger than $250. This document not only acknowledges their charitable donation, but it can also be used by the donor to claim a tax deduction.

An acknowledgment letter should include a “thank you” followed by your nonprofit’s name and the donation amount (or description of a non-cash contribution). While this satisfies the legal requirement of donor stewardship, these documents can also be used to improve donor stewardship. That’s where our next stage comes into play!

3. Personalized Recognition

Nonprofits should follow up each gift they received with a sincere, personalized thank you letter or email. But that’s only the beginning of the recognition process.

Get creative with how you express your appreciation. Strong donor recognition strategies include:

• Promptly following up with an email, phone call, and/or visit (depending on the size of the gift and pre-existing relationship with the donor). We recommend following up within 24 hours, or at least within one week.
• Hosting donor recognition events to cultivate relationships and encourage higher levels of giving.
• Featuring donors in your organization’s newsletter, publication, or annual report to add human interest and celebrate donors.
• Creating giving societies and honor rolls that offer tiered recognition and accompanying benefits.

Donor appreciation takes into account a supporter’s preferences, such as whether they prefer to be anonymous or received recognition. If you can provide your donors with a highly-personalized sign of appreciation, it will help to deepen their relationship with your mission.

4. Communicating Results

While donors value acknowledgment and recognition, they also want to see the result of their gifts.

Communicating your results back to donors is key to keeping your supporters well-informed. Consider using the following strategies to report the impact of a gift:

• Send campaign updates via email and direct mail.
• Feature stories in your newsletter.
• Post updates on social media and your blog.
• Create case studies highlighting the community you serve.

When a donor can see the full journey of their gift, they will feel more inclined to continue lending their support.

5. Cultivation

Focus the final stage of your stewarding process on motivating donors to continue or increase their support. Keep the emphasis on relationship-building, not solicitation.

Incorporate these simple cultivation tactics into your stewardship strategy to encourage deeper commitment to your organization:

• Share plans for the next stages of projects that donors have given to in the past.
• Suggest related programs that donors may be interested in based on their previous interests and giving habits.
• Ask donors to spread the word about a project or program they’re passionate about via social media.
• Invite donors to an onsite event or tour to see the results of their gifts firsthand.

What do your donors value? What approach do they respond to? How do they want to be contacted? Answering these questions will help cultivate your relationships with donors as they move towards their next gift.

How to Create a Donor Stewardship Plan

Donor stewardship requires creativity and planning in order to build long-lasting relationships. Follow these steps to create an effective donor stewardship plan:

• Create a stewardship team. Recruit members of your staff and board to reach out to donors. Ensure everyone is on the same page and well-equipped for timely, heartfelt stewardship.
  Study your donor data. Crawling your CRM for donor information like engagement history will provide a roadmap for your stewardship plans.
• Identify and segment donors by levels. Based on this data, segment your donors into well-defined groups, such as new donors, long-term donors, and major donors. This allows you to customize messages for each group, making donors feel like you’re speaking directly to them.
• Develop and organize your stewardship opportunities. From hosting donor appreciation events to sending out acknowledgment letters, make sure you’re prepared for each stage of stewardship.
• Evaluate feedback and data results. Measure the impact of your stewardship plan by documenting contributions and making note of any changes, such as increased donation amounts. Then, collect data and feedback from your CRM and surveys to improve future stewardship.

Remember, donor stewardship is all about giving back some of the appreciation that your donors have shown you! Although the process takes time, having a database of happy and loyal supporters will be well worth it.