Why donor relations is more important than ever

Donors relations is part of the stepping stones to creating a successful organization.

During these harsh economic times nonprofit organizations struggle to secure new donors and cultivate relationships with existing donors through fundraisers. From my own experience during the economic downturn, it is simply too much for some companies and people to make a simple donation. What can a nonprofit organization do to develop positive relationships through fundraising? In this post I will summarize the findings from an academic study discussing the communication theory and nonprofit organization’s relationships with donors.

Richard D. Waters, the author of the study, states that now more than ever, it is necessary to weave communication strategies into relations with major gift and annual giving donors. Communication theory can be used to examine the characteristics, purpose, nature of communication, and what sort of communication model is used. You must identify what type of public you are dealing with as well, for example, passive, active, or latent.

According to the Giving USA Foundation, in 2007 an estimated 1.6 million charitable organizations received $306 billion from Americans. An annual giver can be an individual, an organization, a foundation, or a corporation. A major donor is usually a sponsor.

Method

  •  Waters mailed surveys to a random sample of 4,290 people.
  •  However, only 4,173 surveys were received due to bad addresses.
  •  There was a 41 percent response rate, meaning 1,706 people completed a survey.

Surveys

  •  Waters conducted a pre-test to determine the formation of the survey and size of the scales
  •  The surveys consisted of demographic information.
  •  The surveys incorporated Hon and Grunig’s relationship outcomes scale (i.e., satisfaction, trust, commitment, and balance of power).
  •   The surveys incorporated Ki and Hon’s scales (i.e., trust, control mutuality, commitment, satisfaction, communal relationship, exchange relationship)
  •  A 9-point scale measured participants’ responses. The scale ranged from strongly disagree (1) to strongly agree (9).

Demographics

  •  53 percent female, 47 percent male
  •  Caucasion: 45 percent
  •   Asian/Pacific Islander: 17 percent
  •   Hispanic/Latino: 12 percent
  •   Middle Easter: 12 percent
  •   African-American: 9 percent
  •   Annual giving donors: 79 percent
  •   The mean age of donors: 44.8 years, the mean age for major gift donors: 52.1 years, and the mean age for annual giving donors: 42.9 years

Results

Organizations with more reciprocity received higher levels of satisfaction and commitment by major gift donors. Reciprocity means an organization is returning the favor. For example, if your organization has a large sponsor who donates each year, then the donor would be acknowledged through printing his or her logo on a T-shirt for an event. Trust and balance of power increased when there was a large amount of relationship nurturing.

Major gift donors agreed access had a significant impact on the balance of power in the relationship. Access means the donor is able to interact with all levels of the organization and the organization is transparent with the donor.

Annual giving donors looked to networking, relationship nurturing, positivity, and responsibility as major effectors of balance of power, trust, commitment, and satisfaction

Annual giving donors showed greater need for trust. To achieve this, an organization is advised to be as open as possible when the donor is giving for the first time.

Networking is a big influencer for annual giving donors. Networking provides the donor and the organization with a mutual connection between whom they know and who the organization knows. Thus, it is a win-win for both.

Recommendations         

Major Donors

  • Inviting major donors to participate in organizational activities is crucial to the relationship.
  •  Major donors like to discuss projects or events, and want to work closely with the organization.

Annual Giving Donors

  • Meetings between annual donors and the organization must be brief during a fundraiser; you must be timely, open and pleasant.
  • Nonprofit leaders should recognize and discuss other organizations with similar goals because annual giving donors like to see the nonprofit community supportive of other organizations.
  •  Handwritten notes are important for big donors. The personal touch of a handwritten note makes the donor feel special. Donors feel recognized for their contribution when a handwritten note is sent.
  •  When donors express concern, nonprofits should demonstrate organizational behavioral changes, not just verbal and written assurances. Actions speak louder than words.
  •  The audience is active. Donors want to engage with the organization that they are donating to. For example, when hosting a fundraising event periodically give shout outs to the donor who raised a high amount. Another example would be inviting a donor to volunteer for your organization. Volunteering is one of the best ways to involve a donor in your organization.

Limitations

  •  The study was limited to the Western United States.
  •  The study was limited to just three nonprofits and only nonprofit hospitals.
  •  It is hard to generalize the study, as the sample is small and further research would need to be conducted.

Conclusion

Major gift and annual giving donors are some of the most important supporters that a nonprofit must maintain. These two groups donate some of the largest amounts to an organization. The ability to connect with annual giving donors is especially important. If an annual giver has an exceptional experience at an event, then an annual giver will want to continue supporting the organization. It is vital to follow communication theory to achieve the tight-knit relationship we want our donors to feel for our organization.

Waters, R. D. (2010). Increasing fundraising efficiency through evaluation: Applying communication theory to the nonprofit organization – Donor relationship. Nonprofit and Voluntary Quarterly 40(3), 458475. doi:10.1177/0899764009354322

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