August 28, 2014


Donor stewardship key to growing major gifts

[Publisher's note: The Philanthropy Journal does not necessarily endorse the opinions, products or services offered or cited in this paid advertorial.]  By Mark W. Glickman Ten years ago, an Internet search for the term “donor stewardship” resulted in a substantial number of entries regarding care for our environment, natural resources, animals and many Christian references to caring for other people and congregations.  A Google search today for the same phrase results in thousands of hits related to fundraising, a clear indication of the increased use of this term in the lexicon of philanthropy.  Many large nonprofit organizations now have a director of stewardship and donor communications, or a manager of donor stewardship. The Merriam Webster Collegiate Dictionary tells us that the word “stewardship” first appeared in the 15th century, and is defined as “the conducting, supervising, or managing of something; especially: the careful and responsible management of something entrusted to one’s care.”  Mark W. Glickman is vice president and senior philanthropic consultant for Wachovia Wealth Management in the Palm Beach County region of Florida. A steward is “a person on a plane or ship who looks after passenger comfort.” Then perhaps we can say that donor stewardship is the process of ensuring donor comfort with our charitable organization.  The intent is to build lifelong relationships with your major donors, to ensure that your nonprofit organization is their charity of choice.  The challenge is to discover what your donors want, and then exceed their expectations. Donor stewardship is the final step in the solicitation process, and is not just for major donors.Why is it so important, and why should you budget dollars for this purpose? * Satisfied customers are your best salespersons.  * It helps to ensure repeat gifts. * We are in the business of friend-raising, not just fundraising. Key elements of donor stewardship: Communication with donors One of the most important rules in fundraising is to acknowledge all gifts within five business days.  Anything longer may cast a negative light on your organization.  If it means hiring temporary staff to catch up with this responsibility, it is important enough to do so. Every organization should be sending some sort of newsletter or magazine to all donors of a particular dollar amount.   An “insiders’ newsletter” may go to a much smaller number of major contributors, and could be as simple as an 8˝”-by-11”, two-sided, nicely-printed page.   It may include progress on your annual, capital or endowment campaigns; organizational “gossip,” such as births, deaths, milestones, marriages; major gift successes, new endowments or capital gifts; a calendar of special events or deadlines; or new grants and corporate gifts.  More and more charities are accomplishing this type of communication via email, with very attractive graphic designs. For major donors, it is important to recognize their family life-cycle events.  Send cards for birthdays, anniversaries, get well soon, birth of a grandchild. Be sure that the cards are hand-signed, even if you have them printed in advance with your leadership names.  For significant milestones such as a 50th wedding anniversary or a 75th birthday, you may want to present a gift or flowers.  Send a food platter to a family that is mourning the death of a loved one.  This lets them know that you care, and that they are part of your organization’s extended family.  However, be selective about who gets what.  Gifts can backfire if someone else doesn’t get the same treatment.  Be ready to justify why that donor received the special treatment. Holiday observances are very much appreciated, such as Christmas cards or Jewish New Year cards.  Consider sending Thanksgiving cards, which have a particularly nice relationship to thanking donors for their continued support of your organization. Every major donor should be visited in person at least once a year, and called at least once a year.  Make sure that the annual call or visit is not just for a solicitation.  Your contributors will appreciate hearing from you, be interested in changes or future plans for your organization, and may consider making additional gifts.  But if the only time you ever call or visit is because your hand is out for something, they will probably start using their caller-ID feature to screen you out.  Respond to phone calls, emails and letters in a timely fashion.  Key elements of donor stewardship: Donor recognition In his book Megagifts: Who Gives Them, Who Gets Them, author Jerold Panas interviewed major donors, trustees and board members from some of the largest charities in the United States, and asked what they liked, and what turned them off.  A Princeton University trustee suggested that charities should find seven ways to thank a major gift donor.  She felt that you cannot thank donors enough. Charities are becoming much more creative in their donor recognition walls.  Among the various types of groups recognized are: capital campaigns; special challenge grant campaigns; heritage society ($100,000 or more in a deferred gift); $1 million Club; past dinner honorees; volunteer of the year; major annual campaign levels or benefactors; corporate sponsors; or endowment funds. Recognition pins may be given for different levels of annual giving; to indicate an endowment fund has been established or a gift has been perpetuated; years of continuous giving; or for cumulative giving. An annual report with an honor roll, or a calendar with a similar list, will encourage donors to join their peers.  Some organizations are putting their donor honor rolls on their websites, as an extra way of thanking donors and recruiting new ones. Instead of another wall plaque that will end up in the closet, find a special gift for a donor that has personal meaning.  Examples might include a crystal golf club head for a golfer, a piece of sculpture or a lithograph, an antiquity or relic in a Lucite box, or a framed photo of the donor with your organization. Each piece should have something like a small brass plate identifying the purpose of the recognition item. Dinners and other special events can be used to honor long-term supporters or to recognize a particularly large donation.  In many nonprofit organizations, about 40 percent of the bequests of $100,000 or more come from donors to the annual campaign of $100 or less, who have been consistently giving for many years.  This shows the importance of having a recognition program for long-term givers.  A press release, or a specially printed announcement, can share the news of a major new gift to your organization, and encourage other donors to join your successful organization.  Most contributors like to give to winners. When you find yourself struggling to find seven distinct ways to say thank-you, one of the opportunities is to send multiple personal letters from various lay and professional leaders from your organization.  If the executive director, president, director of development and the campaign chair all send personal letters, the donors will not say, “What a waste, look at all this duplication.”  Instead, they will be impressed, and feel greatly appreciated.  When the time comes for the donors to make future major gifts or plan their estates, they are more likely to consider your organization, rather than the one that just sent a simple form-letter acknowledgement. Donors are Special Find creative and personal ways to thank your donors, but avoid anything that could run afoul of the tax laws and the IRS.  Think of yourself as the concierge of your organization, trying to help your major donors wherever feasible. Try not to say "no."  At least respond to unusual or challenging requests by saying, "I'll see what I can do."  Donors will appreciate the fact that you tried your best to accommodate their requests.  Explain why not, if you can't.  "It's our policy..." does not work. Fulfill donors’ wishes It is vitally important to put everything in writing.  Letter agreements that are as detailed as possible (who, what, where, when, why) will go a long way toward preventing problems, and making it easier to understand the donors’ intentions, even after they have passed away.  Contracts, letters of understanding, and confirming conversations with a follow-up letter all serve the same purpose. Make sure that charitable trust and charitable gift annuity payments are sent out on time.  Satisfied donors may be so pleased with your efficiency that they will decide to do a second or third gift annuity.  On the other hand, dissatisfied contributors may change their estate plans to delete you from their list of beneficiaries.  Be consistent, especially with all of your major donors.  They talk to each other, and word spreads quickly.   Be scrupulously honest, accurate and responsible, to gain their respect and trust. Be a problem solver. Become the “go to” person in your organization whom donors call first when they have a question or a problem.  You may want to be selective about who has your personal cell-phone number, and ask donors not to share it with their friends.    This is a way for major contributors to have special access to you, and make them feel that they are part of the inner circle of your organization’s leadership. If you have the time and the resources, it is nice to help with family transitions for major donors.  When the donor’s grandmother needs additional services, have a list of attorneys, day-care facilities and service providers that you can share.  When a daughter of a donor moves into town and is trying to find ways to get involved in the community, be sure that a staff member reaches out to her.   If a donor is going on a vacation and wants admission to a museum or to arrange for a tour, you will be a hero if you can help to assist them.  Again, think “donor concierge.” Where do you draw the line?  Small nonprofit organizations can be overwhelmed if they do too much of this.  You may for instance decide that only the top 10 or 15 donors and/or their families will be entitled to this special treatment.   Every staff member should be trained to recognize opportunities for serving your donors, but also to be aware of what are and are not appropriate actions. As you and your nonprofit organization build a reputation for caring for and being responsive to your donors in meaningful ways, you will be able to ensure the financial success of your institution. This communication is not a covered opinion as defined by Circular 230 and is limited to the Federal tax issues addressed herein. Additional issues may exist that affect the Federal tax treatment of the transaction.  The communication was not intended or written to be used, and cannot be used, or relied on, by the taxpayer, to avoid federal tax penalties.


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