Increased competition for funding and the difficulty of establishing positive relationships with donors, sponsors, staff and volunteers are among the most common challenges faced by today's not-for-profits. Read on to learn tips, best practices and the smart solutions that can help your not-for-profit overcome these challenges to strengthen donor relations and further your mission.
In commercial organisations, acquiring a new customer can be anywhere from five to 25 times more expensive than retaining existing customers. It's a similar situation for not-for-profits when it comes to donor retention. This means focusing on donor relations - the efforts you make to acquire, retain, and engage with donors.
Donor relations are closely tied to your donor retention rate, which can be calculated by dividing the number of repeat donors this year by those who donated last year. If your donors are not motivated to support your mission, your retention rate will likely be lower. However, if you have repeat donors, it will be higher. High retention matters because more frequent donations will positively impact the financial health of your organisation. In the not-for-profit sector, the average donor retention rate is 41.9%, signifying that there is ample room for improvement.
Good donor relations require good donor stewardship practices - the reactive relationship-building process after a donor provides financial support. This is important because creating mutually beneficial connections with your existing donors can inspire them to give again. This may include updating them on the impact of their gift, reporting on your organisation's philanthropic endeavours, or providing new opportunities for them to get involved. Let's explore how technology supports these activities.
Solid donor relationships are built on consistent communication. But trying to communicate with every donor manually isn’t sustainable, particularly as you grow. Not-for-profit CRM (Customer Relationship Manager) software is a database that stores information about all your organisation's relationships. This includes names, donation amounts, donation dates, and notes about the person or organisation. One key capability that CRMs offer is communication automation, enabling you to provide all your donors with regular updates and philanthropic support requests. You can even segment your donors to customise your outreach based on donor interests, ensuring your donors receive targeted messages that are more likely to inspire and engage.
These regular communications don't always have to be centred on fundraising; you can get your donors involved by inviting them to volunteer, join a committee, or host a fundraising event. By creating these authentic connections, donors will want to keep the giving going.
Donors care about where their funds are going and the impact their money is making. You can further strengthen your donor relations by creating communication pieces that share powerful stories and images about the donors' impact, not just facts and figures. A good not-for-profit CRM includes insightful reporting capabilities that give complete visibility into donors and programs, allowing you to understand and report on program outcomes. These data points can then be turned into impactful stories that resonate and provide more context for the donor. For example, rather than saying, "We accomplished XYZ", consider phrasing like, "Because of your donation, we were able to XYZ". By providing personalised information on impact and effectiveness, you will create more engaged donors who want to keep giving.
The above communication efforts are impossible without an integrated cloud ERP system and CRM that allows your not-for-profit to stay tightly connected with all stakeholders. With fewer systems and more integration, resources that were once spent on activities like creating spreadsheets and assembling reports can be reinvested towards programs that better serve your missions. This satisfies donors and allows not-for-profits to gain a single coordinated effort across the organisation—enabling them to target and engage each constituent, build lifelong relationships and grow the support needed for long-term success.
Good donor relations require effective donor communication to improve engagement and build better long-term relationships. That’s because not-for-profits should treat their donors as they would a customer, providing outstanding service and showing them exactly how their donations are changing the world for the better. To do this, your not-for-profit needs an effective ERP solution to streamline communications, turn data into insights and have advanced features to help build solid donor relationships to further your mission.
Software donations, discounts and a singular focus on supporting the capacity of our customers to effectively use NetSuite, all combine to drive the success of Not for Profits partnered with Annexa.
Reach out to the team on 1300 994 550 or sales@annexa.com.au
Annexa is a leading NetSuite partner with extensive experience designing and implementing comprehensive and customised business systems, including payroll solutions, financial management, warehouse management and ecommerce solutions.