11 Tips for Building Relationships With your Donors

Building genuine relationships with your major and middle donors takes time and intention. However, establishing these relationships can help you secure steady funding streams for your nonprofit for years to come.

In this article, we’ll discuss why donor relationships matter, how to build them, how donor relationships can boost your nonprofit’s fundraising ability, and more.

Let’s dig in and learn 11 effective strategies to build relationships with donors and 3 mistakes you should be avoiding.

What is a Donor Relationship?

A donor relationship involves the intentional process of building personal connections between your nonprofit and its donors.

Like any other relationship, building a relationship with a donor of any type (including foundations and corporations) takes time, intent, individual strategies, and emotional intelligence—including good listening skills.

Donors want—and deserve—to be appreciated and kept informed. By building a genuine, lasting connection with your donors, you’ll help strengthen their loyalty to your nonprofit and the cause it champions.

While individuals connect with individuals, your goal is really to build a relationship between your nonprofit and your donors, so if you unexpectedly leave your position, someone else can step in and continue the process of relationship-building and maintenance.

Some nonprofits have a donor relations coordinator or manager, but it’s also important if you’re a development director or a gifts officer to form good relationships with key donors. That’s because what works for regular donors (monthly contributors or annual fund candidates) doesn’t necessarily work well with more significant donors.

You’re probably already doing some donor management and relationship building. If you send out emails, direct mail appeals, or call your donors, you’re not only fostering relationships with them but also managing them.

Other common tools to cultivate your donors include hosting signature annual special events, personal visits, and facilitating peer-to-peer communication with members of your board.

Why Should You Care About Donor Relationships?

You should care about building strong relationships with your donors because they care about your cause—and show it by giving. Establishing donor relationships and having effective donor management are two of the keys to keeping your donors happy and engaged, rather than leaving them on their own.

Donor retention—especially retention of smaller givers—fell in the first quarter of 2022, according to the Association for Fundraising Professionals’ Fundraising Effectiveness Project. In fact, the donor segment with the greatest drop was the so-called “micro donors” who give gifts under $50.

However, the same report said retention of major donors (those giving between $5,000 to $50,000) was up 2.2%. That’s why a strategic approach to donor relationship management is a must.

Building relationships with donors takes time. The average donor moves through all the steps of the donor cycle in about 18 - 24 months.

The donor cycle consists of five steps:

• Identification: This is when you identify a potential donor.
• Qualification: This is the process of determining whether or not the person is a good candidate as a donor.
• Cultivation: This is where relationship-building begins.
• Solicitation: This is the step where the request for a donation occurs.
• Stewardship: This is the acknowledgement step, where you honor the donor’s intent and thank them.

Donors, by and large, like to be appreciated for their generosity. They not only want to feel good by giving, but they want to be appreciated for it.

By feeling connected to the mission they’re supporting, donors stay. And, by building warm, trusting relationships with your individual donors, it’s not unusual to find a once-a-year donor turning into a major donor, or a middle donor giving larger gifts.

11 Ways to Build Better Relationships With Your Donors

If you don’t already have a strong donor relations plan, no worries. We have 11 strategies to help you build better relationships with your donors.

1. Do a wealth screening

Wealth screening is an important way to get your arms around who in your database has both the capacity and the inclination to give larger gifts.

You can securely send your data in spreadsheet form to a wealth screening service that will then comb through public records to uncover information about things like real estate assets, giving to other nonprofits, oil and mineral rights, stock holdings (in some cases–the caveat is the individual must be a C-suite employee at a publicly traded company), relationship information, and more.

Most wealth screening vendors also calculate RFM (Recency, Frequency, Money), a key flag to identify your very committed regular donors.

RFM is a predictive score based on how recently a donor has given, how often they give, and the cumulative amount of their giving. Donors with high RFM are also likely candidates for your legacy program.

Some wealth screeners also include predictive modeling in their offerings, which is a great way to find new prospects who “look like” your existing major donors. By finding major donor lookalikes, you’ll know who to focus on building new relationships with.

2. Segment donors

After your wealth screening results are returned, you can easily segment your donors into “buckets”—annual fund donors, middle givers, major givers, as well as prospects with the potential to join your legacy program, if you have one.

Your major donors are extremely important to your nonprofit. Cherish them, whether they give $5,000 at the end of the year, or have made a significant gift to your capital campaign.

Your middle donors, especially if they’re younger, are poised to become your future major donors, so they must be cultivated for the long term. And your donors who give smaller gifts are likewise important but don’t need as much “high-touch” cultivation as do your major and middle givers.

Don’t misunderstand: all donors are important. In fact, Giving USA, in its 2022 report, found that 67% of all philanthropic giving came from individuals.

3. Thank frequently and quickly

It should go without saying that any donation of more than $500 or $1,000 deserves an immediate phone call of thanks as well as an emailed receipt within 48 hours. Too many smaller nonprofits that are short-staffed only run their thank-you letters or cards once every few weeks, or even once a month.

Donors want to know that you’ve received their gift, they want to be appreciated, and they want to be assured of the impact they are making for the greater good. Besides, it’s just plain impolite not to thank your donors quickly.

If you’re in the practice of sending thank-you gifts to your donors, check out this post for a curated list of donor gift ideas.

4. Learn your donors’ communication preferences

Some donors prefer being contacted by email. Others want a phone call. Some may only want to hear from your nonprofit every month or so. How can you find out? Easy. With a survey.

Surveys can reveal many things about communication preferences. In fact, SurveyMonkey has a template available for a donor survey.

As you acquire new donors, survey them and honor their preferences, whether it’s less contact, more phone calls, e-mails, or direct mail. By honoring your donors’ preferences, they’ll feel heard and you won’t risk annoying them.

5. Start a legacy program if you don’t already have one

Are you interested in starting a simple legacy program, focused on estate gifts rather than complicated charitable trusts? Here’s a way to get a jump-start.

A simple five-question survey will help find donors who already have your nonprofit in their estate plan, solicit input from those who are interested in learning more, and identify any donor not interested in legacy marketing.

Here are the five things you should ask: 

• E-mail
• Have you named one or more nonprofit organizations as beneficiaries of your estate?
  - Yes
  - No
  - I don't currently have an estate plan
• Is (organization name) one of those beneficiaries?
  - Yes
  - I intend to include (organization name) in my estate plan
  - I will not be including (organization name) in my estate plan
  - I have not included (organization name) in my estate plan but would like to speak to someone about it.
• If you indicated you will not be including (organization name) in your estate plan, could you provide detail about why you have not?
• Which benefits of planned or legacy giving are most important to you?

And that’s it!

6. Meet with them personally

Yes, we’ve all gotten very familiar with Zoom, Google Meet, and the like, but there is nothing like meeting in person to build a relationship or jumpstart a new one.

Body language and facial expressions convey a lot. And by taking the time to meet personally, your donors will begin to feel more valued. Here are some suggestions for meeting face-to-face:

• Meet them for coffee
• Host a donor lunch
• Give them a tour of your facility to see your nonprofit at work
• Invite them to an event that you believe will be of interest to them

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7. Prioritize donor stewardship

A big part of donor relationship management is good donor stewardship. Stewardship is a discrete activity that is part of donor relations, but not quite the same. Stewardship is reactive, occurring after the gift has been secured.

Stewardship is the careful management of the donor’s gift or gifts, including acknowledgment, ensuring the gift is used in the way the donor specified, and protecting their privacy.

Some ways you can steward your donors better include:

• Investing in a secure CRM that protects your donors’ information
• Making sure anonymous donors stay anonymous
• Assuring the donor in your acknowledgement letter that you’ve honored their intent for giving
• Scheduling monthly reports with data and metrics on a program’s progress/results

Build trust by keeping your word and doing what you said you’d do. Proper donor relationship management is a big part of building trust with your generous givers at all levels. Without good, consistent stewardship, you’ll negatively impact your donor relations efforts.

8. Personalize your messaging

Sending an appeal letter with the opening “Dear Friend” is, quite frankly, archaic. It is easy to create a mail merge using your word processing software.

If you’re using an outside print shop, they have this ability, too. They’ll just need a data file with name and address information, as well as the preferred salutation. For instance “Jim” or “Mr. & Mrs. Smith” or “Jim & Susan.”

The same goes with email-–with a little set-up, each email can be customized and personalized to your donors.

Imagine the reaction of a long-time major donor receiving a non-personalized thank you, email, or appeal. Their reaction could range from anger to offense, to feeling unimportant. Personalization demonstrates that your nonprofit is paying attention to details, and values each one of your donors.

9. Seek donor feedback

Here’s another place where a survey can come in handy. Ask donors how they felt about the last interaction they’ve had with you and your team. Give them the opportunity to praise, vent, or simply provide input.

Ask for their opinion on your website, any donor-facing printed materials, and other communication tools you use. Ask for their suggestions about content, too. This indicates your organization cares about their ideas and viewpoints, not just about their money.

10. Focus on retention

A donor may give once, and never give again. In fact, in the first quarter of 2022, donor retention rates were -6.2% from 2021.

A big part of that precipitous drop is the pandemic’s impact on giving. More people gave in 2020 and 2021 during the height of the multiple surges of COVID-19 variants. Once things seemed to be calming down, donors discontinued their philanthropy, according to AFP’s Fundraising Effectiveness Project.

But, there are other common reasons why a nonprofit loses donors:

• They weren’t thanked quickly or genuinely
• They asked a question and no one responded (or responded too slowly)
• They felt they were being asked for money too often
• They lost trust in the organization
• They lost interest in the cause
• The donation process was too difficult

Clearly donor retention is a huge issue. Ensure your donors are getting the love and appreciation they need. And, make it easy for them to give.

11. Show them their impact

Especially with promising middle and existing major donors, personalized communication about the social impact their giving has made is a key strategy to build relationships with donors.

A handwritten note with a photo of a client, the program they funded, the building they helped create—all can help donors feel appreciated and engaged with your organization.

Another way to demonstrate impact is through storytelling. Artful storytelling about someone positively impacted by your nonprofit can create an emotional response and help your donors feel the impact they are making.

A personal phone call giving them a progress report about what they funded, and how pleased you are that they made such an impact, is another way to connect your donors to your cause.

3 Mistakes to Avoid Making With Donors

There are three common mistakes that can derail good donor relationship management. They may seem obvious, but it’s helpful to point them out.

Failure to Measure and Test

Any donor-facing communication, especially emails or any type of appeal should be A/B tested on a small group before applying the results widely. The same goes if you’re revamping your nonprofit’s website.

Without measuring and testing what works and what doesn’t, you’ll be ignoring your donors’ preferences. And that communicates, ever so subtly, that your organization doesn’t really care what they think.

Talking About Yourself

When you’re in conversation with a donor, focus on what they’re saying, not what you want to say. Far too many people only listen superficially, planning their response well ahead, instead of focusing on the other person’s comments.

Of course you can relate to what’s being said, but hone in on what your donor is saying. Use reflective comments, such as “So what I’m hearing you say is X, Y, and Z.” Emotional intelligence goes a long way in effectively building relationships with donors.

Not Understanding Your Donor’s True Interests

Quite simply, don’t assume the notes left in your CRM by a previous employee are correct. For instance, sitting down to a conversation with a donor who you plan to make an ask of, and asking for the wrong thing based on erroneous notes can be a disaster (not to mention embarrassing.)

Be sure to spend ample time getting to know your donor and his or her passions yourself before making an ask.

Wrapping Up: 11 Strategies to Build Better Relationships With Donors

Building solid productive relationships with donors should be every nonprofit employee’s priority. That ranges from the receptionist at the front desk to the executive director.

By taking advantage of today’s technology to wealth screen donors, by keeping your donor management system up to date, and by practicing active and proper stewardship of every gift, you will demonstrate to your donors that they are appreciated and valued.

We hope these 11 strategies to build relationships with your donors will help your nonprofit’s efforts to retain your existing donors, as well as identify those with the potential to give more.

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