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donor-recognition-best-practices

Donor Recognition: The Best Practices for Your Nonprofit

Dan

Your donors care a lot about your cause and your organization. They know that they can help you achieve your goals and put into action your nonprofit’s vision of a better future. So they give their hard-earned money in service to your mission. For that alone, they should be recognized.

But there are strategic reasons - and strategic ways - to do so. Donor appreciation facilitates donor retention, donation increases, and awareness of your cause, so it’s extra important to make sure it is done properly!

In this article, we will cover:

Let’s go!

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What Exactly is Donor Recognition?

Donor recognition is the act of announcing your appreciation of, rewarding, or otherwise acknowledging those who donate to your nonprofit.

It means conveying to your donors that, while you know they donate out of a genuine love and passion for your mission, you still appreciate them choosing to donate at all, and certainly to your organization.

Donor recognition also serves to humanize your nonprofit. Any organization, especially once it grows in size, is susceptible to being perceived as a business of sorts, rather than a collection of passionate individuals. Recognizing and appreciating your sure supporters is a great way to remind your team, membership base, and the public that your organization is just that: human.

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Why Does Donor Recognition Matter?

First and foremost, donor recognition matters because your contributors deserve it. They do what needs to be done to help your cause. And as with most forms of generosity, you do, dare we say, have something to gain from it: continued support!

donor-recognition-best-practices-whyTristan is ready to dive into donor recognition!

Donor Recognition Increases Donor Retention Rate

Donor retention occurs when a person contributes multiple times to your organization. Recurring donors are extremely powerful assets because their generosity compounds over time. The more repeat donors you have, the larger and more consistent your revenue will be.

An extremely effective way to maximize recurring donations is through donor recognition. Who is more likely to donate again, with all else equal: the person who donates once and never hears from you again, or the person who donates and then sees their name in your organization’s newsletter the next day?

Recognizing each donor lets them know that they have been noticed for their generosity. And while that is not the primary reason they donate, it sure is nice to see.

Donor Recognition Encourages Donors to Give More

Knowing that their donations have both gone to a great cause and earned them the reputation of being a valuable asset to your organization means many donors will donate again, and often more the next time. This rings especially true if you have a tiered donation appreciation system.

If someone donates $20 and then finds out they earned "silver status", it may give them the push they need to go for gold and donate $100 next time, especially if there are other incentives involved, like receiving certain items, or being invited to attend some event. Magnifying this tier across your entire donor pool can have a drastic effect on your bottom line.

Donor Recognition Help You Gain New Donors

Nonprofits frequently promote sociability, not only through the events and activities they host but in the simple way that they interact with their community, and sometimes the world at large. Getting involved with your nonprofit opens people up to this community, often creating an extensive social sphere in which like-minded individuals share the same values and the same goals. When people feel passionate about the work your organization is doing, and especially when they regularly donate or become volunteers themselves, they are going to be inclined to talk about it, and perhaps as a consequence compel members of their entourage to involve themselves as well. 

Donor recognition certainly incentivizes these kinds of interactions, and here is why: the more people feel seen - that is, the more they feel truly a part of something greater than themselves, a group of kind, loyal and caring people who only wish to see to it that the world becomes a better place - the more they will want to share this sense of pride and responsibility with others. The more your donors, members, and volunteers are recognized, the more they will feel a sense of true belonging, and will want to reach out to other members of their network so that they too can become a part of something great.

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Which Donors Should You Recognize?

The answer to that question is, of course, all donors. But there are several types of donors, each with their own manner of donating. Different levels of recognition can not only allow you to show extra appreciation to large or long-running donors, it can incentivize one-time supporters to donate more. 

The types of recognition you should offer depend on the types of donors your organization typically sees. You can tier your donor recognition strategy based on the frequency in which your supporters donate, starting with small, one-time donors, and working your way up to long-term major contributors. Alternatively, and somewhat similarly, you can base your donor recognition strategy on the amount your supporters donate. A hybrid of the two is common.

Pro Tip: You may be tempted to focus only on your new donors, but keep in mind that one-time, relatively small-scale donors will not help your nonprofit’s financial situation in the long run. You should make your current and recurring donors feel acknowledged and gratified as well. This is key to increasing your donation volume!

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How To Build Your Donor Recognition Strategy

The first step in your strategy should be to find a way to thank all donors at least once a year. Typically, the best and most effective way to do so is in your annual report.

This serves two purposes. First, it is just good form to express gratitude. People respond to it, and it shows that you know your organization relies on generosity. Second, showing numbers creates a goal in people’s minds: can we beat it next year? How much of that was me? That number is enough to create real change, so we should keep adding to it.

donor-recognition-best-practices-how-to-buildOliver is framing up his donor recognition strategy!

The second step to take is to recognize individuals one-on-one. Let’s break this down into actionable steps:

All Donors

All donors to your organization should receive a thank-you email. The email should not only show appreciation, but can also include their tax receipt as well as any pertinent information about tax deductions.

Donors who are sent a thank-you within 48 hours of making the donation are shown to be 4 times more likely to give again, so do not skip out on this simple step.

Appreciation emails are fairly straightforward, and are often included with the donation receipt (if it was made online). Here is a quick draft of an exemplary appreciation email:

Subject Line: Thank you for your donation!

Body: Dear [NAME OF DONOR],

We just wanted to reach out and let you know that we genuinely appreciate your generosity. Your donation of [DONATION AMOUNT] is going to help us [BRIEF DESCRIPTION OF YOUR CAUSE]. Donors like you allow us to continue the work that so desperately needs to be done.

Below, you will find your donation receipt.

Thank you again,

Your Friends at [ORGANIZATION NAME]

It is as simple as that! It conveys your true feelings of gratitude while simultaneously reminding them of their donation amount, while giving them the receipt they need to write their donation off on their taxes.

Be sure to brand your email with your logo and colors, as it can increase your brand awareness while conveying the professionalism of your organization. 

New Donors

New donors can be honored in a special way. The most popular way is by mentioning them in a newsletter under a "New Donors" section. This shows appreciation, and also includes them in the family that is your organization. It helps demonstrate that they are a part of something bigger.

Your most loyal contributors are sure to pay attention to this section of your newsletter. They can serve as the "welcome wagon", extending gratitude to new donors and bringing them into the loop about new projects and your overall goal. By doing so, they are fostering a stronger community and getting new donors excited about the work you do.

Recurring and/ or Legacy Donors

Recurring donors are very important, because their contributions help stabilize finances in the long term. For that, they deserve extra recognition. There are a couple of ways to do this.

Social Media Shoutout

Your organization’s social media account acts as an effective means through which you can announce new projects and talk about your successful events. It is also a place where your rockstar recurring donors can get some public recognition.

Be sure to tag them in the post thanking them, so that their friends see their generosity, as well as your organization’s branding and mission. This spreads awareness while also showing appreciation for your vital recurring donors.

Branded Gifts and Goodies

Everyone likes free merchandise. Offering your donors branded merchandise gives them something real and functional to remind them of just how connected they are to your organization. Any wearable or usable item branded with your organization’s name and logo also serves to increase your overall brand awareness, as well as awareness about your purpose; all it takes is someone to strike up a conversation, or even just to remember your logo and name, for your nonprofit to become etched in their memory.

Pro Tip: Make sure your merchandise is of good quality, and that it is aligned with your nonprofit’s values. For example, if your organization promotes natural ways of living, any clothing or other textile goods you make should be composed of natural fibers, should be minimally processed, and should not smell like chemicals when it first comes out of the bag!

Donor Recognition Wall

A donor wall is traditionally a bulletin board posted in a public place with donor names and amounts they have given. By showing off your best donors, you are telling the world that your organization has support and is a valuable asset to your cause. In peer-to-peer campaigns, it can also foster a little friendly competition to see who will get the top spot next week or month.

If you have the resources, you can set up an electronic donor recognition wall that updates in real-time according to online donations.

Major Donors

Major donors give substantial amounts of money to your cause. Amounts can vary from a few thousand dollars to hundreds of thousands of dollars. These superstar donors should be given special recognition as partners in your cause, doing more than most to aid in your mission.

Recognition can be made through phone calls, appreciation videos, and appreciation events.

Phone Calls

A personal phone call from the president or vice-president of your organization is a very intimate and special way to give thanks to your large donors. Give them a call to check on them, and see if there is anything your organization can do to make their donation more meaningful, perhaps with a dedication or specific use of the funds they have provided. Note that if it is legally agreed upon beforehand, a donation made solely with the intention of being used a certain way is called a donor-restricted fund, and must be honored.

This recognition shows that their contribution is going a long way to help your cause. You want them to know that they are a bigger part of the mission beyond just their money. It also offers you the chance, down the line, to establish a close relationship with them, which is a key step in donor retention at the higher levels.

Appreciation Videos 

Large donations often help to complete a project. When they have done just that, a donor appreciation video may be in order. Be sure to include what the funds were used for and what they helped accomplish.

Maybe those last few thousand dollars meant the difference between completing a project on time or having delays. Maybe it topped off a goal so your organization could start a new project. Whatever the function of the donation was, an appreciation video can be shared, shown at events, and sent directly to the donors. 

Appreciation Events

An appreciation event is a great way to honor your donors and entice others to donate as well. Here are some donor appreciation event ideas:

  • An invite-only gala just for major donors

  • A party for everyone thrown in one or more of your donors’ honor

  • A segment of a normal event dedicated to one or several large donors

As long as you plan something meaningful and appropriate to show your appreciation, your donors will likely receive it well. That being said, you want to be grateful, but not on-your-hands-and-knees grateful. There is a fine line between being thankful and imploringly so - be sure to keep your professionalism.

Pro Tip: To make your recognition count, specify how each donation will impact your organization. For example: "The 200$ we collected will allow us to buy new supplies for our painting class next week". Do not hesitate to share photos and videos later on in your newsletter, to show them the results of their contribution.

Instrumental Benefactors

Every so often, someone donates an immense sum of money, in the millions, to certain foundations, hospitals, societies, and other nonprofits. These "instrumental benefactors" are just that: instrumental. Their contribution has allowed the organization to grow in ways that would have been impossible without the donation. 

donor-recognition-best-practices-how-to-buildNancy is feeling strong about her donor recognition!

These donations can come in two forms: restricted and unrestricted (also known as categorical donations and non-categorical donations, respectively). 

  • Restricted (Categorical) Donations

Large categorical donations are sums of money that come with specific instructions on how it should be used, or that are donated for the express use in specific existing programs.

  • Unrestricted (Non-categorical) Donations

Large non-categorical donations are donated free of instructions, and can be used for any operation or project at the discretion of your organization.

Regardless of the type of donation, benefactors can be recognized in so many ways. One of the most common is to name the project or fund after them. For example, Howard Levine, the former CEO of Family Dollar, recently donated $25 million to Atrium Health for their new Wake Forest University medical building. The building will be called the Howard R. Levine Center for Education.

Another way to recognize and reward these donors is by offering them a position on the board of your organization. This allows them the opportunity not only to continue supporting the organization, but also to help direct your initiatives. Notably, you cannot offer this position to just anyone, even if they have donated millions; if someone is not 100% passionate about your cause, and if you cannot be sure that they have your organization’s best interest at heart, you do not want them to have a voting seat.

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Final Thoughts

Donor appreciation and donor retention are inextricably related. If you do not show appreciation for your current and past donors, they may feel like you grabbed their money and ran. All donors deserve thanks, no matter how big or small. Let’s recap some of the ways you can show appreciation:

Depending on the size or frequency of their donations, you can establish different tiers for different donors. All donors should get a branded thank-you email, while larger donors might get merch or a special mention. New donors should be brought into the loop by mentioning them in a newsletter or introducing them at your next meeting.

Those who make major contributions can be honored with appreciation events or videos, and can be contacted directly by phone for a more intimate sense of gratitude.

No matter your methodology in demonstrating it, appreciating your donors is something you should do naturally. Their generosity is what keeps your mission going; it is what keeps your organization alive and well.

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FAQ

💡 Why does donor recognition matter?

Donor recognition increases your retention rate, encourages donors to give more, and can facilitate getting new donors. Find out more. 

🔑 Who should you recognize?

All donors should be recognized on some level, but you can establish a number of tiers to recognize donors more according to donation size and frequency. Find out more. 

📝 What kind of recognition strategy can you build?

To build your recognition strategy, develop ways to show appreciation for all donors, new donors, recurring donors, and major donors. Recognition can come in many forms, from a simple email to a phone call to an appreciation event. Find out more.  

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