Donor Management: Best Practices in 2024

Donor management is key to building out a successful nonprofit fundraising program.

Tracking important moments in a donor’s giving history, moves management, productive communication, and authentic appreciation are all essential components of an effective donor management system.

In the following article you will become familiar with what donor management is, why it is important, and learn about best practices so you can develop meaningful relationships with your donors that will foster a community of support for many years to come.

Let’s get started!

What is Donor Management?

So what exactly is donor management?

Fundamentally, donor management is the process of tracking information and data related to each of your donors and leveraging that information to effectively steward gifts and cultivate sustainable relationships.

Keeping organized and detailed information about your donors and your interactions with them allows you to tailor your fundraising strategies to improve your donors’ overall experiences.

Whether you are focused on managing complex relationships with major foundations and corporate sponsors, or stewarding a modest, first-time gift, it is vital to maintain donor management processes so you can optimize each relationship to its fullest potential.

Employing an effective donor management process will facilitate more meaningful interactions with your funders, allow you to track important trends and make strategic predictions to enable growth, and improve donor engagement with your mission and cause.

Why is Donor Management Important?

The importance of an effective donor management process is simple: it positions your organization for long-term growth.

No nonprofit organization can simply rest on their laurels, assuming that the work can speak for itself. It does not matter how innovative and indispensable an organization’s work is—sustainable giving requires strategic relationship cultivation and meaningful outreach to your base of support.

Donor management helps you facilitate a level of personalization that allows you to engage your audience members at critical moments in their interactions with your organization and position them to become donors. What’s more, good donor management makes it easier to retain donors.

Donors who receive personalized, targeted communications are more likely to give and give frequently to your organization. With successful and strategic donor management in your box of handy nonprofit tools, you will be able to build a base of support that will sustain your organization for years to come.

Donor management does not just have a powerful impact on your supporters, it is a critical tool that makes your fundraising team’s job much more intuitive, streamlined, and simple.

A clear, efficient donor management process helps keep members of your organization in the know about crucial upcoming actions, allowing them to enact strategies that maximize their workflow and produce better results for the organization.

7 Donor Management Tips That Work

Now that you understand what donor management is and why it is essential to your nonprofit, it is time to really get to work! This section will delve into specific tips on building better relationships with your donors and how to leverage these relationships to grow your organization.

Let’s dive in!

1. Invest in a Quality Database

When it comes to donor management, data is key.

Having accurate, accessible data for each of your donors is imperative. Finding the right database to effectively store, analyze, and track information about current and prospective donors will have an immense impact on your organization. A quality database can make following trends, tracking actions, and organizing sizable amounts of information a breeze for your fundraising team.

In the for profit sector these types of database platforms are referred to as Customer Relationship Management (CRM) systems. Corporations use CRM technology like Salesforce and Oracle to effectively track customer data and manage different processes related to sales and other business functions in one central platform.

There are several CRM systems that are tailor-made for nonprofit organizations.

‍Blackbaud is one of the most widely used platforms for higher education institutions, healthcare organizations, and other nonprofits. Tessitura is a CRM designed specifically with arts and cultural institutions in mind. In addition to donor management and other fundraising functions, Tessitura also can be used as a sales tool for events ticketing or admission to an institution like a museum or cultural center.

Understanding the different options that exist and investing in a database that complements the type of nonprofit you manage is crucial.

Do your research. Make sure you carefully look into the systems available to you and make sure the tools and functions available are something your organization will use. It may not be wise to invest in a platform with hundreds of functions and capabilities you may not need.

CRM’s like Blackbaud and Tessitura are used by major nonprofit institutions like Ronald McDonald House and the Metropolitan Museum of Art. For smaller or mid-size nonprofits, it would be profitable to go with a CRM that is tailored to the needs of a small organization. Neon One CRM is an effective database designed to specifically meet the needs of small to midsize nonprofits.

2. Engage Donors with Personalized, High-Quality Communication

So you have done extensive research and found the perfect donor database for your organization. What comes next?

Once you have a place to store, analyze, and track all of your donors’ information it is just a matter of utilizing it in an effective way.

Donors overwhelmingly prefer content and communications that are personalized and high-quality and that make them feel deeply engaged with the vital work advanced by the organization. A recent study shows that 71% of donors feel more engaged when they receive communications that are personalized.

Leveraging your donors’ data to prepare content and communications specific to their journey, interests, and history with your organization will not only encourage them to give again, give more, or give more frequently, it will also foster meaningful, authentic relationships with them too.

It is also crucial to ensure your communications are not just personalized but high-quality as well. The same study revealed that over 70% of donors prefer concise self-contained e-mails, brief letters or articles, or short videos. They were dissatisfied with communications that were irrelevant or vague or information that was presented in a dull or boring manner.

Be intentional with how you communicate and what you are communicating to your donors. Personalize your messaging and ensure your communications are concise and impactful, revealing the most important information about your cause to best inspire and engage your donor base.

3. Always Thank Your Donors

Do not forget to be a gracious steward of your gifts!

As obvious as it may seem, many organizations forget to thank their donors after receiving a gift. This simple gesture is a necessary component of good donor management.

Never forget that donors are the backbone of your organization. It is because of their generosity and passion for your mission that you can keep the doors open—so tell them that!

Not only is thanking your donor great etiquette, it is a step toward fostering a fruitful, long-term relationship. Ensuring you send every donor who sends you a gift (no matter how small) a meaningful thank you note is the gateway to encouraging continued giving.

Be sure to thank them by name in your communication and for added emphasis, let them know the impact your gift will have on your organization. If they gave to a specific program and area, be sure to talk specifically about that program and where their dollars are going.

Your donor will appreciate the transparency and peace of mind knowing how exactly their gift will be used and will be encouraged to give again if they know their dollars have a tangible impact.

Want to go the extra mile? The best way to say thank you is by giving your donors a gift! Check out our recent article, 11 Nonprofit Donor Gift Ideas, to get inspired and find a way to really show your supporters they are appreciated.

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4. Keep Donors Informed

Do not let communications with your donors only happen after they have just given or when you are soliciting for a gift.

The donor-nonprofit relationship should be constant throughout the year. A 2022 study from the University of Indiana shows that donors are becoming increasingly interested in the impact their dollars make, expressing a greater interest for nonprofits to communicate their work’s impact and efficacy.

Participants in this study were eager to find organizations who demonstrated their impact and kept donors informed of their work and progress toward objectives. In addition, they were also wary of giving to organizations who solicited gifts without showing how the money would be spent.

Keeping your donors informed helps cultivate an honest, transparent relationship with them. Being open with your donors about how money is being spent, where their dollars are going, and your organization’s achievements and impact will go a long way to developing trust and creating loyalty amongst them.

5. Encourage Direct Involvement

Receiving frequent communications about the impact of your work is important, but there is nothing better than getting involved in the work directly.

Volunteering is a great way to build better relationships with your donors and keep them engaged.

For many, volunteering helps them decide whether they should financially support an organization, with 2 in 5 donors reporting volunteering first before making a financial commitment.

‍Safe Humane Chicago is a nonprofit organization that connects youth and adults who have experienced violence and trauma with neglected and abused shelter dogs to cultivate meaningful, healing relationships. This organization offers the opportunity for individuals to volunteer by spending time with the shelter animals.

While the organization does a brilliant job of illustrating impact through communications, there is really no better way to inspire and champion their work than providing an opportunity to spend quality time with sweet, furry companions!

6. Develop an Effective Moves Management Approach

One of the most crucial aspects of managing a donor's information and stewarding the relationship is being responsive and strategic about solicitation over the long-term.

It is important to keep your data clean and organized so that you can gauge the status of the relationship, their giving patterns, and ultimately identify how to solicit a gift and what to ask for. The nonprofit sector typically refers to this type of long-term strategic donor stewardship as moves management.

Generally, moves management is executed as a strategy to cultivate and develop major donor relationships. Organizations keep diligent, detailed notes on every interaction with their major donors to understand them in a way that facilitates long-term relationships and sets the organization up for a successful ask. Major gifts are key to growing your organization.

While this strategy is typically employed for major gifts, it is a relevant tactic for donor management at every level.

Creating meaningful journeys for your donors is imperative, regardless of how much they give. Neglecting your donors at any step in this process could mean a lapse in their giving or seeing them move on from your organization for good.

7. Make Frequent Asks for Donations

Don’t forget—an interaction with a donor is an opportunity to ask for a donation! Donors will not give to your nonprofit if they aren not prompted to.

Whatever the communication is, you should consider always encouraging your donors to donate again, donate more, or donate more consistently. Communications with your donors should always include an easy to identify and accessible way to donate.

For email communications, this can be as simple as including a button within the body of the email that can take donors directly to your website to donate. Letters can include a message near the close directing donors how to give by mail. SMS text messages can provide a link in the body of the text that will take them directly to your website so donors can give on their phones.

There are so many opportunities to make an ask of your donors as you manage their relationship. Don’t neglect to do so!

What to Avoid When Working With Donors

While you need to know essential strategies for effectively managing donor information, it is just as important to know what to avoid when you are working with your donors.

Here are some things to steer clear of when cultivating a relationship with your donors:

• Verbose Communication: Donors are interested in staying informed, but it is important not to bog them down in information. Avoid the trap of using nonprofit jargon that your supporters may not understand. Provide succinct, compelling information that will catch their attention and inspire them to action.‍
• Guilt: No matter the severity of the issue your organization is addressing, you should never set out to use guilt as a tool to get your donors to give. Never focus on making your donors feel bad—donating should be an exciting and joyful process! Use powerful stories of impact to illustrate the reason your organization is worthy of a gift.
• ‍Abandoning Your Donors: As illustrated throughout this article, good donor management is a perpetual process. Once you have received a gift from one of your supporters, that is not the end of the relationship. In fact, it is the beginning! Continuously prioritize relationships with your donors and your organization is sure to succeed. 

Wrapping Up: Donor Management: Best Practices in 2024

Effective donor management is all about relationships—building them, growing them, and maintaining them for years to come. You now have the resources necessary to build better donor relationships, create meaningful connections, and foster a strong donor community.

Take these tools and get started cultivating relationships. A community of invested, passionate donors is just ahead!

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Find and win more grants for your nonprofit!
See why thousands of nonprofits trust and use Instrumentl.

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