This month’s tip is all about the single biggest problem facing direct response fundraisers today. That problem – pretty much across the sector – is declining renewal rates. Compared to five or ten years ago, first-time donors are making fewer repeat gifts – and long-time donors are lapsing like never before.

Most of the fundraisers I talk to (and I talk to lots of them!) intuitively go to the wrong place. They think they need to bring in more new donors to replace their increasing attrition. This is a part of the solution, granted. But the first fix is to stop the attrition in the first place!

Which brings me to the “S” word…

In my opinion, donor stewardship is an area where most charities fall woefully short. We all have a wonderful opportunity after the gift is made to build the relationship, grow loyalty and boost our renewal rates. Yet, to most of us, “processing” the donor after the gift is made is a necessary task somewhat akin to cleaning your bathroom on Saturday morning. We need to change our thinking about stewardship – and start seeing it for the opportunity it is, rather than as a necessary housekeeping chore.

Let’s face it. Most charities do a good job of soliciting gifts. They hire consultants and writers. They design beautiful mail or digital packages. They write compelling phone scripts. They put a lot of thought and effort into their solicitation – and it shows. The simple truth for you is that it’s very hard to stand out from your competitors when it comes to making a stand-out ask.

You can stand out though when it comes to how you communicate with your donor after the gift is made. By putting a state-of-the art stewardship plan in place – and executing it with discipline and consistency – you can create a unique donor experience and brand yourself in your donor’s mind.

What I’m about to lay out for you isn’t rocket science. And yes, it takes some work. But it’s going to cost you less time and money to keep donors than it will to find new ones. I can promise you that.

So my tip for this month is this: Create a five-step stewardship approach for all your donors and stick to it for one full year. Measure your before and after renewal rates – and see how it works for you (kind of like those ‘before’ and ‘after’ photos for weight-loss programs.)

1. Acknowledge the gift immediately. Get that tax receipt and thank-you note out within 24 hours of receiving the gift. Better yet, phone the donor with a quick “we got your donation” call. Leaving a voice message is fine. This shows the donor that you’re attentive to her money and to her.
2. Send a meaningful thank-you letter a week or two after that first acknowledgement. This letter can be two (or even four!) pages long. Review what the original solicitation was about (don’t assume that the donor will remember). Have the signatory of this letter share his/her reasons for being so committed to the cause and the organization. Assure the donor that the money will be put to work soon – and that you’ll keep her updated on your progress. Offer to be there to answer questions or deal with problems any time. Give the donor the name, position, phone number, email address and postal address of the real live person she can get in touch with any time. And last but not least, find a sincere and meaningful way to say thank you!
3. Use your communications tools (newsletters, website, donor reports) to show progress on the specific program or project your original solicitation asked for money to help with. You might even send a special update letter or email to the donor simply to give an update. For example, a hospital foundation might write its donors to say that “the new x-ray machine will be delivered at the end of this month – and we’ll have it up and running a week after it arrives.” Please believe me when I tell you this. We have listened to over a thousand donors in focus groups over the years. They always complain that they get asked for money, they give money – and they never get told how the money was used. They want that update before they’ll give with confidence again.
4. Find a way to listen to those donors. The ancient Greek philosopher Epictetus said, “We have two ears and only one mouth so that we may listen twice as much as we speak.” That’s sage advice for any fundraiser! Send your donors a questionnaire about their personal preferences (like whether they like e-receipts, paper or e-newsletters, mail/phone/digital solicitations etc.). Send a satisfaction/loyalty survey to measure how happy they are with you. And, always invite them to complain! If they’ve got complaints, they’ll express them. Better they complain to you than to their friends and family.
5. Offer deeper commitment options. Find ways to make sure your donors are aware that they can do more to help your cause and your organization. Perhaps they can volunteer – or recruit friends and family to support you. They might be interested in switching from one-time giving to monthly – or upping their giving to mid-level, major or legacy gifts. (One of the best ways to do this is to use the stories of other donors who have done these things. Just make sure that they talk about why they’re so committed and why they want to do more to help.)

If you do these five things well, you’re in a great position to go back and solicit a new gift. I’ll be very surprised if you don’t find that your renewal rates get better – and that your donors are a happier bunch!

Fraser Green is principal and chief strategist at Good Works, a consulting firm that works with Canadian charities to engage donors at a truly human level and build donor loyalty and commitment. Fraser welcomes your ideas, comments and criticisms about this tip. Please email him with your reactions and thoughts.