5 ways to find and keep middle-income donors
Fundraising is never easy. Planning successful fundraising campaigns, choosing and using technology to smooth the process of giving, learning to effectively tell your story, proving mission impact, finding and keeping donors — it’s a long list. And given the potential negative impact on philanthropic giving stemming from the 2017 US tax overhaul, the fundraising list of to-dos and challenges just became a bit more daunting. What you need to focus on:
- Improve your online donor management and fundraising.
- Finding and cultivating new donors for your nonprofit.
- Create and promote a compelling story about your nonprofit mission.
- Strategies to keep the donors you've worked so hard to find.
- Take heart and keep moving forward.
Nonprofits are concerned of a potentially drastic reduction in donations from middle-income donors. Todd Frankel in the Washington Post says, “A real concern is how the tax bill will sharply reduce the number of taxpayers who qualify for the charitable gifts tax deduction, with donations predicted to fall by at least $13 billion, or about 4.5 percent in 2018. That decline is expected to be sourced from those at the middle of the income scale." In other words, the source of the smaller gifts that social-service agencies and religious organizations tend to rely upon could dwindle drastically as the loss of the resulting charitable tax deduction will likely give middle-income folks pause when choosing how much and to whom they contribute donations.
It has never been more important to cover all the bases to ensure that your smaller donors will continue to give, despite the loss of the tax deduction.
Here are the best ways to help you find and keep smaller donors, regardless of the tax overhaul impact.
#1. Nonprofit online donor management and fundraising — the time to start or improve is now
Jakob Nielsen, a user experience consultant, predicts that most charitable donations will come through digital channels by 2020. Is your organization ready?
Begin with a donor-friendly website
The mechanics of online fundraising are relatively straightforward. The true challenge is dealing with donor psychology.
Research from the Nielsen Norman Group reveals that donors have high expectations of nonprofits. Before parting with their money, people tend to ask specific questions:
- What does your organization do? Website visitors want to find the answer within 60 seconds of finding your website. Put the answer on your homepage and make it simple to understand. State your ultimate outcome and target population in eight words or less — for example, "reducing rates of binge drinking in college undergraduates."
- How will my donation be used? Donors want a clear statement of how their money is spent. If you fail to provide this information or make it hard to find, people will wonder if you're trying to hide something.
- Can I trust you? Website visitors also look for social proof of your organization's credibility. You can provide this through testimonials, endorsements and ratings from watchdog groups, (e.g., Charity Navigator and GuideStar.) Also, state the number of years that your organization has been in existence and provide a mailing address for donors who prefer not to donate online.
Set up to receive online donations
You have several options for allowing website visitors to make online payments in a safe and secure way.
One possibility is to add a donation button to your website. You can do this through services such as PayPal and Razoo. These vendors require you to add a few lines of code to your organization's website, so find someone with the necessary know-how. If you already use a donor management system, then it can probably create a donation button on your website.
Your nonprofit can also accept donations through Facebook. If your organization already has a page on this social network, then consider adding a "Causes" tab for online donations.
Third-party donor management software is another option available to nonprofits. While each nonprofit organization's software needs are unique, donor management software should include the same basics:
- Easy and straightforward for donors to access and use
- Provides tools that allow you to cultivate valuable donor relationships
- Provides features that minimize time-consuming administrative tasks
- Organizes constituent data easily and effectively
- Affordable (most are about $3,000 per year)
- Scalable (grows with your organization)
- PCI compliant, meaning that the credit card processing process complies with PCI Data Security Standards to help prevent credit card fraud. Ask for proof that your donor management software assumes the responsibility for collecting donor payment information and storing it in a PCI-compliant manner
- Generates reports that provide insight into your fundraising challenges and successes
- Look for add-ons such as event registration and crowdsourcing fundraising via interaction with social media channels
Online donor management software and services offer benefits to small nonprofits that don't have the technological capacity to set up firewalls, encrypt data and install other privacy safeguards. It pays to shop around. When choosing a fundraising service, ask these questions:
- What will the donation page look like? Will it match the rest of your website?
- What are the fees? Beyond transaction fees, do these include charges for initial set-up and monthly service?
- Will the provider process payments from all major credit card merchants?
- Does the provider offer on-screen and email receipts?
- Can the software be accessed from mobile devices? This is important, as donations are increasing sourced from donors using mobile devices
- Can the provider handle premiums and recurring donations?
- How long will it take to process donations and deposit the funds in your account?
- Does the provider offer accounting and reporting services, such as the ability to download spreadsheets with donor information? If so, how much do these services cost?
- Is the provider considered trustworthy by others in the sector?
Make it easy for people to donate
No matter how you choose to accept donations, provide a direct call to action. Amazingly, nearly 25 percent of the nonprofits in the Nielsen Norman study failed to include this information on their homepage.
For best results, make your donation link clearly visible. Use action words like "donate" or "donate now." Avoid indirect language such as "make a contribution" or "become a supporter."
In addition, make the donation process as seamless as possible. Ensure that website visitors move from the donate link to a confirmation page within a few minutes — the less time, the better.
FYI: Don’t forget to Register for Charitable Solicitation
In the U.S., find out which states require registration by checking out this map from Affinity Fundraising Registration. In the U.K., you must register your charity with the Charity Commission if you have more than £5,000 in annual income — or if you're a charitable incorporated organization (CIO), whatever your income. Check with the Charity Commission for guidance on how to register your charity.
#2. Cultivate New Donors for Your Nonprofit
A robust fundraising strategy includes finding and cultivating new donors, which may prove more difficult in 2018. Learn to do more with less. Use these tips to leverage your limited resources to attract the donors you need to succeed.
Start with your contacts
Having a contact or connection with a prospective donor is often the determining factor in whether he or she will contribute — and it's not hard to see why. People are more likely to say yes when someone they know does the asking.
Once you've tapped into your personal network, encourage your board members to do the same. And what about your volunteers and staff? Get them involved, too. Find people who know and trust your nonprofit and ask for testimonials, recommendations or a description of their history with your organizations.
Try to connect with nonprofit influencers who can open doors to new donors or re-engage existing donors. Then ask them to invite these people to learn more about the organization, for example, by checking out the website or attending an event.
Build awareness and engender belief
You undoubtedly have a great story to tell about why your nonprofit was created and what you've accomplished — and hope to accomplish. Make sure potential donors hear it. Research shows that charitable giving is heavily motivated by the donor's knowledge of an organization.
Put your website to work
Sure, you have a website. But does it invite potential donors to learn about your mission and goals? Make sure your site highlights:
- Your target population
- The social issues you're tackling
- The impact and benefits of your programs
- Financial information (such as annual reports)
- Donation options
Social media is a great way to attract supporters who are interested in the same issues you are. Figure out which social media tools your potential donors use. Is it Facebook, Twitter or both? Then create your account and start talking about the good work you're doing.
The impact may not be immediate, but stick with it and you'll begin to build a following. Some of your followers will even become advocates for you by liking or sharing your posts.
Don't settle for an online connection, though. Encourage your followers to participate in real-world opportunities, too. For example, host an open house or take part in community events so your digital fans can talk with you in person.
You've probably heard of crowdfunding platforms like Kickstarter — but what about a crowdfunding site geared toward nonprofits, such as GlobalGiving? These sites allow you to create a campaign to attract donations. With crowdfunding, you have the potential to reach a more diverse audience than otherwise might hear about and contribute to your nonprofit.
Spread the love
You can't afford to limit your communication to a single medium. Newsletters, annual reports and donor collateral should not only be available in print but also online. Create a presence in all the places your donors can be expected to look for you. The result? Increased support for your mission.
#3. Develop a compelling and quantifiable nonprofit mission story for donors
It is crucial to present a unified message in all your fundraising materials – paper or digital. Ensure that everyone in your organization (including volunteers and consumers) know what you do, why you do it and the story of your mission success. Your story should include:
- A simple, brief and clear mission statement for example, "We provide a safe place for women, and their children, who are victims of domestic violence."
- Why does your nonprofit exist? This also might be a vision statement or a moving “founder” history “My sister died at the hands of her domestic partner and I started the shelter for women in her memory; or, “We are focusing on eradicating domestic violence in our county.”
- What is unique about your nonprofit? "We are the only safe shelter for both women and their children in a three-county area. We also provide job training, relocation services and school for the children while at the shelter."
- How will your donation help accomplish this mission? Be as specific as you can – “Your gift of $100.00 will provide one victim and her children with a bed for one safe night at our shelter”; “Your gift of $25.00 will buy school supplies for a child in our shelter classroom”.
- Encourage donors to ask questions or get more involved and tell them exactly how to learn more (click here, call this number, etc.)
- Why should the donor give? Provide both quantitative research: “Our county has the highest rate of domestic violence in the state, according to …”; “X study has shown that safe places or shelters can save lives – of both women and small children who are victims of domestic abuse.” Don’t forget the heartfelt, “soft” plea, as well. “You can save a life.” “You can help stop the generational cycle of abuse.”
- Why should the donor give to your organization instead of one that is similar ? Your history of provable impact and mission success is important to your donors. Also, list staff and board members for authority and information.
- What other groups, foundations, individuals support your organization? Donors want to invest in a financially sustainable nonprofit with support from multiple sources, and one that can prove it is addressing a real community need.
Your story should appeal to both the mind and heart of a donor. Emotion, in the form of brief testimonials from consumers, pictures, videos, etc. will attract the donor to your story — but before they give, most donors will want to understand the impact of their dollars.
Who Prepares the Story?
While one person (an executive or a consultant) can write the story, many think a group process is best, with involvement from key program managers, board members and the staff leadership of your nonprofit. Whoever is charged with developing the story should understand the need for and the uses of the story, with a deep understanding of your nonprofit organization and why/who you serve.
Telling Your Story on Your Website, in Materials and for all Donor Interactions
Your story should be on every interface you have with the public (website, materials, etc.) as well as learned and memorized by all volunteers and employees. Provide materials to consumers that tell your story, as well.
A carefully constructed and faithfully adhered-to story will attract new donors and endear you to existing donors.
#4. Nonprofit donors: now you've got them. How do you keep them?
Show thanks, build loyalty and keep them in the loop
You've made major investments in locating appropriate individual donors for your nonprofit. Now, how do you keep them around? Consider these simple tips.
Learn all you can
Take time to understand why donors support your organization. Try a personal call, if possible, or an occasional donor survey to keep abreast of why your donor selected you for a gift. Which aspects of your cause do they value most? When you find out, tailor your appeals to tap into the reasons they support your cause.
You can also learn from your losses. Survey lapsed supporters to identify the reasons they dropped you. When you see trends emerge, consider how to reverse them.
Earn trust and build loyalty
Trust is a precious commodity, and it is difficult (if not impossible) to regain that trust once donors have lost faith in the integrity of the people operating the nonprofit or charity. Look for ways to engage your donors. Ask supporters to sign up for email updates or invite them to complete a survey. By creating opportunities for interaction, you build a connection and ultimately a relationship. Create a monthly email that is short and tells your donors about latest successes, a personal story or acquaints them with staff or volunteers.
Remember that every interaction works for or against you. A donor's perceptions of the quality of service you provide is a huge driver of loyalty. Track quality of service and immediately address areas of weakness.
Other suggestions for building loyalty and trust:
- Communicate your organization's achievements. Relate these achievements to the contributions made by your supporters.
- Treat every interaction as a make-or-break experience. Ensure that every team member receives customer service training.
- Honor all promises made to donors. Never make a commitment you're not sure you can carry out.
- Implement a complaints procedure. Make sure you hear about concerns and get the opportunity to resolve them.
Communicate, communicate, communicate
Keeping donors means keeping in touch — and not just with solicitation after solicitation, which can make donors feel the relationship is purely transactional. Instead, use a mix of messages. For example, intersperse donation requests with thank you notes, stories about your cause or clients, invitations to events and more formal communications (such as annual reports).
Donors naturally want to hear that their contributions are making a difference. Make sure your communication plan includes updates after every campaign, as well as quarterly or twice-yearly impact reports — which are a great way to share the progress you're making.
Other ways to keep supporters in the loop:
- Client or beneficiary testimonials. Let the people who benefit from your services talk about your results.
- Before-and-after stories. Include quotes and photos, where relevant.
- Behind-the-scenes videos. Video is is an important way to engage supporters. Take supporters behind the scenes where the real action is.
- Real-time dashboards. Report back in real-time (or as close as possible) with updated data on your website.
- Executive updates. Invite donors to exclusive conference calls with senior leaders.
- Results of outside evaluators. Share your results with your supporters. Transparency is valued.
Of course, nothing replaces face-time. So, while it's old school, creating opportunities to meet with donors in person is still a good way to show your appreciation.
Regardless of the size of the contribution, donors expect to be acknowledged and thanked soon after making a gift. In addition, in the U.S., IRS regulations require that donors have documentation from the charitable organization to claim a donation as a tax deduction. For simplicity, you might include the acknowledgment in the thank you letter.
If you want to follow suit, be sure to include the following information:
- The name of your organization
- The amount of a cash contribution
- A description (but not the value) of a noncash contribution
- A statement that no goods or services were provided by your organization in return for the contribution, or a description and good faith estimate of the value of goods or services that your organization provided in return for the contribution
Acknowledging someone's generosity isn't just the polite thing to do — it's essential for donor retention. A timely and genuine thank you makes it more likely that a donor will continue to support your organization.
#5. Take heart
It takes time, effort and commitment to fulfill the needs of donors as they select their recipients, especially if they receive no charitable donation deductions. Still, with the same passion with which you deliver your mission, you can attract new donors and keep engaging your past donors, despite the vicissitudes of politics or government.
While it is an incentive, a tax break isn't usually the only reason people donate. In a March 2015 article, authors Michael Sanders and Francesca Tammers say: “The science behind why people give money to charity,” hearts generally rule over heads and donors are more likely to make a charitable donation when they are giving to a single, identifiable beneficiary or cause.
Giving is a social act. One study showed that alumni give significantly more to their university if they know the person who is asking for a pledge, rather than the specific impact their pledge will make. And it turns out that notables can also influence donor gifts; for instance, donors to an international development charity were more likely to respond to a match–funding campaign sponsored by the Bill and Melinda Gates Foundation, rather than an anonymous source. It’s well known that celebrity supporters increase donations to charity (but only for people who have donated to the charity before.)
Giving is contagious
The good news is that charitable giving is contagious — seeing others give makes an individual more likely to give. Encouragement from a personal influencer can make also make a big difference in donation decisions, sometimes more than quadrupling them.
Finally, research has revealed that spending money on others actually makes donors happier than spending it on themselves, and giving to others can actually make us all healthier.
So, make donor giving easy, fulfilling and connective to the community. There are plenty of good reasons why donors will keep on giving in 2018!
MissionBox editorial content is offered as guidance only, and is not meant, nor should it be construed as, a replacement for certified, professional expertise.
Washington Post. Charities fear tax bill could turn philanthropy into a pursuit only for the rich by Todd C. Frankel (2017)
Greater Good Magazine. 5 Ways Giving is Good for You by Jason Marsh and Jill Suttie (2010)
THE CENTRE FOR MARKET AND PUBLIC ORGANISATION Centre for Market and Public Organisation University of Bristol A warm glow in the afterlife? The determinants of charitable bequests Michael Sanders and Sarah Smith June 2014 Working Paper No. 14/326
Social Influences and the Private Provision of Public Goods: Evidence from Charitable Contributions in the Workplace Katherine Grace Carman∗ Harvard University October, 2004