Consider that your organization has lately received a new benefactor. They made a significant contribution after being so moved by your cause. What then? Radio silence.
Your organization never sent them a letter of gratitude or even an email recognizing their donation. The donor never gave again because they felt irrelevant and disrespected by your organization.
This may seem like a dramatic example, but it frequently occurs, especially with planned presents or large donations, such as shares of stock or IRA gifts.
In fact, "the organization did not acknowledge my donation" is one of the top five reasons donors decide not to donate again. To preserve donor loyalty and attract new donors, you must align your staff with appropriate donor recognition methods. Donor recognition is an essential component of effective donor management, and it can convert one-time donations into recurrent contributors.
What is donor acknowledgment?
Donor appreciation is a fancy term for thanking donors for their contributions to a nonprofit organization.
Numerous NGOs divide donor acknowledgment into categories based on the nature and amount of the donation. Each tier offers donors varying degrees of public or private acknowledgment.
A successful donor recognition policy will achieve two principal objectives:
- It will nurture relationships with existing donors, encourage them to increase their giving levels, and recruit new donors.
Below, we will discuss how donor recognition achieves these objectives.
- Contributor appreciation can be achieved through various activities and things, from mentioning the donor on your website to delivering a handwritten thank-you card. As the magnitude of a contribution increases, so should the donor's public or private recognition level.
Three ways donor acknowledgment supports NGOs.
Donor recognition should not be taken lightly, as it is essential for acquiring and retaining donors.
- It boosts the retention of your donors. When you acknowledge donors who have given to your cause (regardless of the amount), you make them feel like an integral part of your narrative. It also demonstrates that your organization values all donors.
- It encourages contributors to donate again or to give more. One of the primary reasons people continue to give to their favorite charities is the belief that their contribution can make a difference. When you acknowledge a donor's contribution, you make them feel important to your purpose, encouraging them to continue contributing.
- It can help you acquire new contributors. In expressing gratitude to individuals who have contributed to your organization, you might attract the support of further donors. The term for this is social proof. When people see their friends, family, or coworkers giving to a cause, they are more inclined to believe that it's essential enough for them to participate.
Who deserves recognition?
Your donor recognition plan should aim to make every donor feel cherished, engaged, and inspired by your organization's work regardless of the gift amount.
However, ensuring that your recognition is proportional to their contribution is essential. This demonstrates appreciation for the level of donor dedication to your organization. Too much or too little acknowledgment can lead to dissatisfaction or discomfort, which is why you should segregate donors based on the magnitude and nature of their gifts.
There are two sorts of donors to whom you should pay extra attention in terms of acknowledgment:
- Said major donors provide a substantial amount and have the most impact on your organization. Depending on your organization's size and scope, the way you identify large donors will vary. These donors should receive public acknowledgment or be given honorary titles, as they have the greatest potential to make substantial, recurring contributions.
- These contributors leave a contribution to your organization in their will, also referred to as planned gifts. Typically, recognition entails membership in a donation or legacy society.
How to define levels of donor recognition
To begin, your charitable organization should divide recognition levels into tiers based on donation amount or type. The amounts and types of gifts you designate for each tier depend on your organization. However, each tier should deliver progressively more valuable levels of appreciation or prizes in the expectation that donors will be driven to donate more and enter a higher tier.
First, let's establish the three primary sorts of acknowledgment that your nonprofit organization should consider while designing each tier:
This includes small, personalized gifts or tokens of appreciation, one-on-one encounters, letters, phone calls, or emails.
This can include honor rolls, donor appreciation walls, legacy societies, big donor clubs, press releases, website or annual report mentions, testimonials, plaques, and certificates. Remember to always request permission before publicly honoring donors.
Naming opportunities involve naming a building, room, endowment, fund, or campaign after a specific donor. Typically, naming opportunities are reserved for corporate or significant benefactors.
Each tier should involve both private and public acknowledgment. Naming privileges should be reserved for just your most generous benefactors.
The Star for Life Autism Foundation is a fantastic example of donor recognition tiers. They divide each tier according to the quantity of the donation and reward donors with escalating degrees of public and private acknowledgment. Many groups, like Stars for Life, offer each tier a distinct moniker. This can increase a donor's sense of inclusion in your company.
Specifying each donation amount's impact on your organization is another technique to encourage donors to upgrade.
For instance, Beyond Borders, whose mission is to eradicate child slavery and prevent violence against women, specifies how each donation will contribute to their cause. If a donor sees that $100 pays for twelve months of training for a child rights worker and $200 pays for a year of schooling for a child released from slavery, they may be tempted to increase the quantity of their donation considerably.
When should donations be acknowledged?
The quick answer is when the gift is received. Regardless of the quantity of the present, any recognition and expression of gratitude should be prompt and individual. According to studies, new contributors who receive a personal thank-you note within 48 hours are four times more likely to donate again.
Your larger recognition projects, such as naming endowments, will take longer. Nonetheless, these donations should be promptly thanked.
Need additional tips and resources?
Donor recognition is essential for sustaining your organization's support and attracting new donations.
Your nonprofit can only commit the error of not recognizing or thanking donors. You may encourage supporters to give again, strengthen their commitment to your cause, and recruit new donations by recognizing those who support your purpose. And with a well-defined donor recognition plan, you are well on establishing a successful donor stewardship program.