A Fundraiser’s Guide to Effective Gift Acknowledgment

This article was originally published on the GuideStar blog.

During the last few years, the case for knowing and improving every fundraising organization’s donor retention percentages has nearly reached a fever pitch.

One of the first methods to improving donor retention may sound obvious, but it is so often taken for granted: proper gift acknowledgement. In many ways, the thank you letter is a “springboard” to improving donor retention. Is there any better opportunity to solidify a relationship than in the process of thanking a donor for their gift?

Poor Donor Acknowledgement Runs Rampant

During my 30+ year career, I have had the personal pleasure of helping over 20,000 nonprofit organizations implement new fundraising databases. I often revisit customers whenever I am in their particular area of the country.

On more than one occasion, I have returned to visit a customer who has let years pass without ever updating their thank you letter template.

In some cases, that one template is being sent to every donor, regardless of whether they are a new donor, returning donor or a major donor.

It’s no surprise that those organizations struggle to make their donors truly feel special.

Improving Donor Retention Requires Going Beyond The Basics

I recently found this handy chart from the Council of Nonprofits outlining the basic guidelines for proper donor acknowledgement processes.

No one would argue that the guidelines enable fundraisers to fulfill the legal and tax requirements. However, the severe lack of emotion within the listed criteria could slow the growth of the donor relationship. At worst, it may actually harm the relationship.

Truly strong relationships are based upon emotional bonds. Donors want to feel that:

• their gift truly made a difference
• their gift was deeply appreciated
• they will be kept informed of how big a difference they made
• if they bring others in as donors those donors will feel special too

Every organization engaged in fundraising can make the above four items come to life with a bit of extra effort and attention. If you compare the time, cost and effort to find, cultivate and garner a brand new donor, this extra effort becomes quite attractive and cost effective!

One Thank You Letter Template Isn’t Enough

If you are sending the same thank you letter to all of your donors, regardless of donation amount and relationship length, it’s time to reconsider. Ideally, you should have at least four templates:

1. New donors at or below your average gift amount
2. New donors above your average gift amount
3. Repeat donors at or below your average gift amount
4. Repeat donors above your average gift amount

Regardless of what fundraising software you use, it should be a snap to filter the gifts into these groups so that each group receives a letter specifically tailored to them.

A Little Segmentation and Personalization Goes A Long Way

Each letter should have subtle differences that speak to the kind of donor and donation that was received. In addition, each letter should come with a different action, such as a welcome kit for new donors and personal calls to donors above the average gift amount.

Almost sounds too simple to be effective, doesn’t it?

Don’t be afraid to test and retest the various differences in each letter in order to identity which is most effective. A few minor changes here and there will often lead to even better results! You can also easily avoid the embarrassment of sending the exact same letter to a repeat donor. It’s a good idea to review and update the four templates at least once or twice a year

Remember that a letter does not have to be your only form of gift acknowledgement. Don’t be afraid to pick up the phone or send a handwritten note, especially for above-average gifts.

Keeping your donor acknowledgment processes personalized, fresh and well-tested will pay many dividends for your fundraising efforts – and your donor retention could rise dramatically!