Auditing Your Stewardship Program - Fearless Fundraising

So, what does a high-functioning donor stewardship program look like? That’s a question I’ve been asking while thinking about my own organization’s stewardship efforts.

We know stewardship is important. And, we have a sense that more would probably be better. But how much more? And more of what, specifically? There’s truly no limit to how much we could do in thanking, acknowledging, and celebrating our donors. But how do you get the most bang for your buck?

We all want a donor stewardship program that makes our donors feel great and moves the needle for our organizations. This post is about how to get there.

The stakes are high. A great stewardship program can do so much for your organization. It can increase your donor retention. Perhaps most importantly, it can help you build trust with your donors, which is essential to raising major gifts.

So, this is inevitably about more than just chasing the latest stewardship tactics.

Yes, we’re going to talk tactics in this series, but not quite yet. Last month we talked about how tactics won’t even work if you don’t understand the inner game.

High-impact donor stewardship requires some deliberate planning. In this post we’re going to focus on about getting very clear on our objectives so that we can then align our tactics accordingly.

So, let’s get started.

Getting Clear on Your Goals

There’s no one donor stewardship program that’s right for all organizations. Yet there’s an unlimited universe of tactics you could implement. Simply ‘doing more of everything,’ however, is not a strategy.

So, you need to start with your goals. What are your larger, most immediate fundraising objectives? Do you hope to increase donor retention? Do you need to professionalize your basic processes and procedures around gift acknowledgement? Or perhaps you want to grow your major gifts pipeline.

The point is, your broader fundraising goals should drive your next investment in your stewardship program. Even if you want better procedures, higher donor retention, and more major gifts, you probably won’t be able to expand your stewardship program to address all these areas at once. Pick one and start there.

Stewardship Audit

Once your goals are understood, you’re ready to embark on a “Stewardship Audit.” This process will give you a bird’s-eye view of what you’re already doing. And, ultimately, it will help you identify gaps in your current efforts, as well as opportunities to improve your program.

Step 1

The very first thing you want to do is get the right audit team together. In particular, it’s important to include key people you’ll need involved in the implementation of your eventual new plan. You want these folks bought in from the beginning. On the other hand, make sure your audit team isn’t too big. Depending on the size of your organization, you probably want 3-6 people.

Step 2

Next, create a “stewardship matrix” for your organization. This exercise will give you a good snapshot of the current state of your stewardship program.

Here’s an example:

And you can download an Excel template here.

A few things to note:

Don’t worry if you aren’t able to fill in every box. That’s not the goal of this exercise. Your objective is to get a one-page snapshot of your stewardship program as it exists today.
The “donor types” represented in the righthand columns are totally up to you. Pick and choose which are most relevant to your organization. You can also change the giving thresholds to represent different levels that matter at your organization.
Your “stewardship activities” will also be different. There are ideas in this example that you can use, but you probably have others that are uniquely important to your organization. I’ll provide even more ideas in the next post in this series.

Step 3

Once your matrix is complete, you want to take a deeper dive into the area that’s currently most important to you. This exercise, of course, goes back to your goals. Keep an open mind, put judgement and criticism aside, and ask further questions focused on the area you want to strengthen. Here are some examples based on the following goals:

More Major Gifts

Your best major gift prospects are already giving to your organization. An investment in stewardship can help you identify and cultivate them. And it will increase the likelihood of your receiving more support from them in the future.

So, with a goal of cultivating more major gifts, your stewardship audit would then focus on certain segments of your population, namely mid-level donors (however your organization defines them) and opportunities to grow those relationships.

And, if you have the resources to pursue planned gifts, you’ll want to focus in on frequent donors as well—those with 10+ years of giving history to your organization. If that population is too large, you can consider raising the threshold to 15+ or 20+. Recency is also a consideration. Someone with 10+ years of giving history but no gift since 1995 is not an obvious planned giving prospect.

With these important populations identified, you can now drill down and ask some specific questions about their donor experience. Here are some examples:

Who are these people? Do they fit a particular donor “profile?”
What opportunities do donors have (if any) to personally engage in the mission?
Do they have personal relationships with people at the organization?
Do you know what motivates their giving?
What type of reporting are they receiving about the impact of their giving?
What type of “thanks” or acknowledgement did they receive after making their gifts?
Are they ever thanked personally?

Increased Donor Retention

Perhaps you want to increase donor retention at your organization. Renewal rates for first-time donors are typically between 20-30%. If someone becomes a repeat donor, giving just two years in a row, their renewal rate jumps to 55-60%. Quick caveat: educational organizations raising money primarily from alumni and parents usually see higher renewal rates. I worked for a college where renewal rates leveled off at about 85% once a donor hit four or more consecutive years of giving!

Given the high cost of donor acquisition, it makes sense to invest in donor retention. Every year of retention increases a donor’s projected customer lifetime value significantly.

So, if you’re at or below the averages above, you probably have room to grow. Here are some questions you can ask during your stewardship audit that will help you with donor retention:

What is the first-time donor experience like at your organization? When someone makes their first-ever gift to you, what acknowledgements, messages, and other communications do they receive?
At what giving thresholds, if any, does your acknowledgement include personal touches?
What type of engagement and/or communication do first-time donors receive for 12 months following their gift?
Do you mark any other significant giving anniversaries like 5^th year consecutively, 10^th year?
What about campaign anniversaries? The 5-, 10-, or 15-year anniversary of a completed capital campaign is a great opportunity to update on progress.
What do these engagement and/or communication opportunities do to increase your donors’ levels of knowledge about your work, the impact of their giving, trust in your organization, and feelings of appreciation?

Firming up the Fundamentals

Maybe you’re looking to crawl before you walk. At this point you just want to be confident you have the fundamentals down and a foundation upon which you can build. Great! Here are some questions you should ask during your audit:

What happens when someone makes a gift to your organization—any gift? Sometimes this exercise is called “the lifecycle of a check.” You can do the same for online donations. Who at your organization sees the transaction? What do they do in response? What other systems and/or procedures are triggered?
How long does it take you, on average, to acknowledge gifts?
What are the ways donors of various sizes are recognized whether publicly or privately?
What communications do donors receive throughout the year?
How are you providing ongoing education to your donors about your work and the impact of their giving?
What opportunities do donors have (if any) to personally engage in your organization’s mission?
How do your answers change to the questions above depending on the size or frequency of a donor’s giving?

It’s important to keep in mind that these are just questions to add depth to your audit. I’m not providing a prescription at this point of things I think you should do; we’re just taking stock. You might even have other, more-pressing needs than the three outlined above.

With whatever goal you decide is driving your audit, you will uncover a number of things you could possibly do to improve donor stewardship at your organization. Remember, the sky is the limit with donor stewardship. There’s no end to what you could potentially do!

So how do you proceed?

Rank-Ordering Your Priorities

With your goal clearly in view, the next step is to rank-order your priorities. Your audit will uncover a number of problems to be solved as well as opportunities to be seized. Don’t expect to be able to tackle everything. Decide which problems or opportunities are most important relative to your goals by rank-ordering them. Some problems are going to be major burning issues. Others will be trivial by comparison. Some opportunities will help you take major steps forward, others are “nice to haves” but not “must haves.” Given your stated goal, what is the one thing you could do that would have the most significant impact on your stewardship program?

And, I’ll add that at this stage in the process, it’s OK if you’re not ready to think tactically. It’s more than enough to state your challenges or opportunities in broad terms or even in the form of questions. For example, “We need to bring a personal touch to our acknowledgement of $5,000 gifts. How might we do that?” Or, “How can we ensure that we acknowledge all gifts received in a timely manner?”

Depending on your goals, some of these problem or opportunity statements will be more urgent than others. Start there! Save the items of lesser importance for another time.

Once you have a handle on your priorities, you’re ready to develop your stewardship plan.

Creating Your Stewardship Plan

If you already have a stewardship plan, it’s time to update it. If not, update the matrix you made during your audit. You can then build out a more detailed plan if necessary.

I’ll provide more specific ideas of new stewardship tactics in the final post on this series. For now, here are some generalizations depending on your goal:

More Major Gifts. Organizations wanting to strengthen their major gift pipelines usually look for ways to increase the personal engagement of their mid-level donors. Current major donors are generally pretty well known and connected to the mission. But what about the folks one or two levels further down on your giving pyramid? What can you build into your stewardship plan to further engage them?

Better Donor Retention. If this is the goal, enhancements tend to focus on the bottom of the giving pyramid. Why? Because that’s where the most people are. New tactics usually include increased expressions of gratitude, increased communication about impact, as well as invitations to engage or connect in other ways that scale.

Firming up the Fundamentals. For new organizations or those looking to professionalize their advancement function, the focus is on the whole giving pyramid. And the interventions tend to be foundational. For example, is every gift acknowledged in a timely manner? Are gift receipts provided to donors according to IRS guidelines? Another important piece is formalizing impact reporting to donors, even if it’s just a once-a-year annual report or a quarterly newsletter. You need some type of regular, systematized communication that demonstrates impact.

And, of course, regardless of your goals, timing and personnel are important to consider.

After you decide What you’re going to do, you need to document When you’re going to do it. The trick is making sure it integrates with all other communications and events that are already in place. Put yourself in your donors’ shoes: will the new flow of communications you’re considering make sense to them?

Who is critical as well. You can have a great plan, but if nobody is charged with carrying it out, nothing gets done. Your plan will need to include the person or team responsible for each task. Make sure they have the bandwidth for the new responsibilities! And put accountability mechanisms in place.

Consider involving volunteers in stewardship activity as well, including members of your Board. Peer-to-peer contact is always impactful. Asking key volunteers to deliver “thank you” messages on behalf of the organization is a great way to engage both them and your donors, particularly new donors.

Evaluating and Re-evaluating

If you’re going to put time and energy into upgrading your stewardship program, you want to make sure your efforts are paying off. Are they moving you closer to your goals and objectives? To find out, you have to build in some mechanisms for tracking your progress.

So, what are the key performance indicators, or KPIs?

Well, if your goal is to be better-positioned for major gifts, you want to track how many substantive contacts you have with your mid-level donors. Following an investment in donor stewardship, you want to see this number go up. “Substantive contacts” are usually defined as meaningful, one-to-one interactions such as in-person visits, Zoom calls, or phone calls. These interactions further donor relationships by educating, informing, demonstrating impact, and/or expressing thanks.

If your goal is donor retention, well, then the metric is simple. Did your retention rate go up?

And, if you’re simply trying to master the basics, that’s easy too: did you accomplish what you set out to do and on your intended timeline? For example, did you get acknowledgements and gift receipts out to your donors within a week of receiving their gift?

When evaluating the impact of donor stewardship, take the long view. Give new efforts aimed at strengthening your major gifts program at least 12 months. Same with boosting your donor retention rate. For “firming up the fundamentals,” you can speed up the evaluation timeline and check in quarterly.

Conclusion

You now have a framework for conducting a stewardship audit and developing (or updating) your stewardship plan.

It all starts with your goals, and then comes back to your goals when you re-evaluate.

The next article will get even more tactical. This post focused on an audit framework and broad questions to identify gaps in your program and/or areas of opportunity. The next one will offer some specific stewardship tactics you can use to take steps forward. See you next time!