Gary Bernstein shares seven key reasons why donor relationships are vitally important.
At the end of June, it was announced by Giving USA that there was a decline in charitable giving of 3.4% (10.5% after adjusting for inflation).
“This decline comes on the heels of two record-breaking giving years in response to the COVID-19 pandemic and the temporary universal charitable deduction. Now however, economic uncertainty caused by inflation and large stock market drops, has reduced the ability of many to continue giving,” reported by the Association of Fundraising Professionals.
Charitable giving – when adjusted for inflation – was down for individuals, foundations, bequests and corporations, demonstrating the significant impact of the 8% inflation rate, a 40-year record high.
According to Giving USA, “Individual giving was hit the hardest by these economic pressures, showing the largest percentage decline in dollars donated. Individual giving has also been declining as a percentage of total giving for the last several years, reaching an all-time low of 64% in 2022.”
As you can imagine, this has a real impact on the nonprofit sector. Without these donations, agencies are not able to fulfil their important mission and provide the services their communities find essential.
So, what can be done? It’s often said you never get a second chance to make a first impression. This is true with any relationship, and it’s especially true when it comes to developing relationships with donors.
The quality of your donor relationships is established right away. A donor who feels appreciated is far more likely to give to your organization again, which is vitally important to your ongoing fundraising success.
The way you welcome your donors over the first ninety days after their gift has a significant impact on your fundraising in the short term. Donor relationships are crucial for the success and sustainability of nonprofit organizations.
Here are seven key reasons why donor relationships are so vitally important:
1. Financial Support: Donors provide the necessary funding for nonprofits to carry out their mission and programs. Building strong relationships with donors increases the likelihood of continued financial support, including recurring donations, major gifts and grants.
2. Long-Term Sustainability: Cultivating strong donor relationships helps establish a reliable base of support for the organization. By maintaining positive relationships, nonprofits can secure ongoing funding, ensuring their long-term sustainability and their ability to fulfill one’s mission.
3. Trust and Credibility: Building relationships with donors helps establish trust and credibility. Donors are more likely to support organizations they trust and believe in. By maintaining open and transparent communication, nonprofits can strengthen their reputation and credibility, attracting more donors.
4. Advocacy and Influence: Donors can become powerful advocates for the organization’s cause. By developing strong relationships, nonprofits can engage donors in spreading awareness, advocating for policy changes and influencing others to support the cause.
5. Collaboration and Partnerships: Donors often have extensive networks and resources that can benefit nonprofits. Building relationships with donors can lead to collaborations, partnerships and access to new opportunities such as introductions to other potential donors or connections to influential individuals or organizations.
6. Feedback and Insight: Donors can provide valuable feedback to nonprofits. By maintaining open lines of communication, nonprofits can learn from their donors’ perspectives, understand their motivations, and improve their programs and strategies accordingly.
7. Donor Retention: Building strong relationships with donors increases the likelihood of donor retention. Retaining existing donors is often more cost-effective than acquiring new ones. By focusing on donor relationships, nonprofits can reduce donor attrition and maximize the impact of their fundraising efforts.
In conclusion, with a recent decline in charitable giving, the take-away is donor relationships are critical for nonprofits to secure funding, establish credibility, expand their reach and achieve their mission effectively.
The first ninety days are vital to your short and long-term fundraising success.
