Demonstrating gratitude to your donors may be your most important job as a fundraiser. Why? A happy donor gives a second, third, and fourth time. A well thanked donor tells their friends. A donor that feels appreciated happily continues to support your organization, your cause, and the people you serve. If nothing else, say thanks because without your donor, your nonprofit ceases to exist.

Donor acquisition is expensive and thanking donors has shown to increase the chance they stick around. In this episode, you’ll learn creative ways to thank your donors.

Full Transcript:

Study after study has shown the great impact that gratitude has on the life of your donor. Without your donor, your organization wouldn’t be around, you wouldn’t exist. You need to think of ways that you can really show gratitude to donors. Gratitude is the number one reason people will be motivated to give you a second gift. They don’t feel appreciated, and they don’t think that they’re valued as a donor, they’re not going to come back and make that second gift. Today’s question is about how do we show gratitude? How do we say thank you to a donor in a unique way, that makes them want to come back, build a relationship, become a donor again, and keep donating into your organization?

Tom: Hi Jeremy. My name is Tom. I have a question about thanking donors. I’m new to fundraising. I come from a job as a business manager at a church. I’ve read a few articles talking about showing gratitude to donors. What are some creative ways beyond just a thank you email that we can do to say thanks to our donors?

The way you say thank you to donors could be the most important communication pieces you have as a nonprofit organization. Unfortunately, many nonprofits send thank you communications that read more like a formal tax receipt than a heart felt note of appreciation, that motivates a donor to want to have a relationship with your organization. Personally, I’ve donated to a lot of different organizations, a lot for research, to find out what are they doing, how are they communicating. So few of them send really nice thank you notes or emails, or appreciation, or letters, or postcards, or anything. Several of them most recently many probably eight out of 10 of the last few organizations I’ve donated to have sent me nothing other than a thank your receipt that looks more like a “Here is for tax purposes” than an actual note of gratitude or thanks for my support. A recent study showed that 80% of donors want a thank you in order to give a second gift.

However, 65% of donors don’t ever make a second gift. There’s obviously a breakdown between how donors perceive our thank you communications, and how we’re actually performing. How we thank donors has a direct effect on the formation of an ongoing relationship with that donor. If we’re unable to form that relationship, we simply aren’t going to receive that second gift. I really appreciate the question that you asked today because it really comes down to the fundamental of donor communications, and our ability to really continue to build a relationship for organizations, when we’re not really showing the gratitude that donors deserve. Without these donors, organization wouldn’t have what we have. We wouldn’t be able to help the people that we help. We wouldn’t be able to do or serve in the ways that we do. Building the donor relationship is just incredibly important. Thank you communications, gratitude communications are just a crucial part of that.

Also, the cost of acquiring donors is so high for most organizations. The length of time that it takes for an acquisition mailing to become profitable for most organizations is 18 to 24 months. With this very high acquisition investment to acquire more donors than we lose, but at the same time, we’re not properly thanking donors, so they want to stay. What if we had a great thank you process in place for our donors? What if you as an organization, what if you’re able to get more second gifts, to build deeper relationships with donors, and to acquire donors with acquisition mailings that become profitable quicker? Now, we’re able to do that Food for the Hungry in terms of acquiring donors, making them profitable quicker. Most of our acquisition mailings, in fact in the last three years of data that I have, we’re turning them profitable less than 12 months, meaning for every dollar we put in, in less than 12 months, we’re getting a dollar back.

Now, if you’re in the industry, you know that that is a great rate. What would it look like for the health of your donor file if you’re able to do the same thing? What if you’re to take your direct to mail donors, and you’re able to convert them to a higher percentage to get to that second gift, so that your direct mailings, that they become profitable quicker? As an aside, let me explain how direct to mail acquisition works. At Food for the Hungry, I mentioned that our path is a little bit less than a year. Typically, we spend between 40 and 45 cents a piece when we’re mailing in volume. Let’s imagine that you have $50000. Let’s imagine that each of your pieces at that price point was about 50 cents a piece. What you’re going to do is you’re going to rent a list of potential donors. You might dip in a little bit into your [inaudible 00:04:51] donors, and you’re going to send out some acquisition mailings. I say mailings because you typically have at least two so that you can have a control, and a test when you send this out.

You want to be continually be finding the best mailings that you have to acquire new donors. If you have $50000 to spend at 50 cents a piece, then you’re going to get about 100000 pieces out of that mailing. Now, you’re going to get some conversion rate, typically one to two percent. A lot of organizations you might dip down below a little bit one percent. Most organizations hover around that one percent number. At one percent, you’re going to get 10000 new donors out of that mailing of 100000 pieces. You can start seeing in your mind if you’re thinking ahead far enough that you’re not going to be profitable on the initial mailing, and you’re not. Let’s imagine that your average donation is $20 off of that piece, then you’re going to raise $20000. You spent $50000, raised $20000. Right off the bat, if you’re not familiar with drip mailing, you might be thinking, “Oh my gosh, this is a terrible investment”, but it’s not. You’re going to then nurture those donors on your list.

As you nurture those donors, then a lot of them are going to get a second gift, a third gift, a fourth gift, a fifth gift. In that process of getting them to make multiple gifts, then you’re going to get additional donations. If you work these numbers out at the scale and size at Food for the Hungry, then what we’re doing is we’re just getting that second gift a lot quicker in order to pay off that initial amount that we invested. In about twelve months or a little bit less than 12 months, we’re going to pay off the cost of investing in the acquisition mailing. Within the next couple months after that, it’s going to be profitable. Then between 18 and 20 months, we’re going to actually be doubling the money. Then fast forward to two to three years, we’re going to be getting more than a three to one return on the acquisition piece. For us, it’s still extremely profitable for us to do direct to mail acquisition, very much worth it within what we’re trying to accomplish at Food for the Hungry.

It’s much cheaper to build that relationship with an existing donor, than to acquire a new one. As you see, acquiring a new donor, you’re losing money on that initial acquisition mailing. You need to find ways to get people to that second gift. This is the key to healthy nonprofit fundraising. Let’s explore how do we get people to give that second gift in the context of gratitude. There’s three aspects that effective thank you communications must have. First, you should be timely with your thanks. It’s quick and easy to send an appeal, an email thanking an online donor. We’re looking to wow the donor so that he feels better about that donation after it happens, then when he felt when he made that donation. I’ve received thank you letters from organizations more than four weeks after I made the donation. In one case, I received my receipt from an online donation, it was an email receipt 10 days after my donation. You’ve got to be more timely with your thank yous. You need to make sure that they get sent to the donor as close as possible to that donation.

Second, you need to explain the impact of your donation. Tell the donor a story of how that donation made a difference in the life of a beneficiary. The story of impact not only shows the donor how their donation is being used, but also reinforces that your organization is efficient and effective. Donors want to know that when they make an impact in a certain area, that your organization can be trusted. Make sure that your communications focus on clarity. Tell the donor clearly and plainly the impact that she has made. The donor should feel truly appreciated by the organization for the gift. However you thank you donor, illustrating how much you appreciate a donor will strengthen the relationship, and move the donor down the path to becoming a long term supporter. Be cautious though, you can be over the top in your appreciation in a way that turns off the donor, and she goes from feeling appreciated to feeling like you’re being cheesy or laying it on too thick. You need to find the right balance.

The question might come up in your mind, “How do I thank the donor?” There’s a lot of ways to show gratitude to the donor. I’m going to go through some really creative ways. I’m going to go through 11 of them, creative ways that you can thank a donor, to show gratitude to them, to make them want to build a deeper relationship with your organization. First, send a heartfelt thank you. When you create a thank you that is timely, that explains the impact the donor made, and makes the donor feel appreciated, then you’ve created something relevant and meaningful to the donor. The heartfelt thank you you send should be custom and specific to the donor, not just a boiler plate message. You really want to focus on customizing that to the donation that was made. When you use the same thank you messaging for all donations, donors can sense that it’s a form letter, and you’ll lose the impact of that thanks.

Personalize the thank you note to the original appeal, so the donor will truly know that your organization appreciated his gift. You should spend as much time crafting the thank you note as you do the original appeal. In fact, I recommend writing the thank you note at the same time as your appeal, so you can match the language and the flow. This continuity lends to the impact of the messaging to the donor. Second, give the donor credit. This bit of advice will have a dramatic effect on your donor communications if it’s implemented throughout your donor facing correspondence. The content of your thank you letter in fact, each piece that you send out should position the donor as the hero in the story. This is likely the hardest thing for general nonprofit staff to grasp, as the people doing the work are often positioned as the hero, or the organization is positioned as the hero. The donor is the true hero of the organization. Without the donation, none of what you will do will happen.

Even more importantly, positioning the donor as the hero will allow him to see the organization as a tool by which he is able to accomplish good. This is simpler than you think. Look through your thank you notes and count how many times you use we or I. Now count how many times you use you or your. You should be using you and your as the primary tool to communicate in the letter instead of we or I. You want to position the communication for the donor’s point of view, not the organization’s. For example, of saying that “We fed 1100 families this Thanksgiving”, you could say, “Your donation along with donors like you fed 1100 families this Thanksgiving.” The difference involves the donor in the work. Do you see the difference? The you and the your really makes a donor feel involved in what you’re doing. Give the donor credit is such a powerful way to strengthen the donor relationship.

Third, send a hand written note. Instead of a form letter, or a thank you email, send a hand written note. In today’s digital and kind of cookie cutter environment that we’ve been creating, personalizing and hand writing a note to the donor will demonstrate you care. This is a great activity for board members or volunteers. You can provide sample copy for what you want the thank you note to say, and then keep in mind effective techniques of positioning the donors [inaudible 00:11:51] as you write that. Then you want to send timely, and you want to demonstrate impact. You want to make the donor feel truly appreciated. There’s some really cool technology that number four has to do with. You want to send a thank you video to donors. The cool technology that I’m talking about allows you to customize and send a custom thank you message, a video message to donors via email.

A custom video message is exactly that. You’ll record a thank you video for each person who donates. Through larger organizations, this might be reserved for major or mid level donors or monthly donors. The script for the thank you video doesn’t have to be lengthy. Instead, it’s important in the first few seconds to acknowledge the donor by name, acknowledge and thank the specific gift, and then explain what impact the donor will have. When you demonstrate gratitude in your video, and you tell the donor the next steps, then what you’re doing is you’re really promoting that connection, and that deepening, and that relationship with that donor. Fifth, make a phone call. Demonstrate your gratitude by calling and thanking the donor. The phone is still a personal way of communication, and helps build authenticity with the donor when she’s called from a live person in an organization.

The phone call provides a way to thank the donor, and also allows the donor to ask you questions about the organization. Number six, create a photo book. If you’re raising money for a project or a specific campaign, take photos from inception to completion, and create a photo book for the donors. The photo book contains photos from throughout the project, and really connects the donor to the work that he helped fund. Number seven, send an anniversary card. At the anniversary of the donor’s first gift to your organization, send an anniversary card celebrating the donor. This is a way to demonstrate loyalty to donors, and that you’re paying attention to the relationship. This is a key way many organizations move donations to that second gift if they’re previously a one and done donor. You can have a member of the board, a volunteer, or the executive director sign that anniversary card.

Number eight, invite the donor to an office tour. Inviting the donor to tour your offices it’s just a great touch that endears donors to your organization by introducing them to the real live people who are doing the day to day work that the donor makes possible. Giving an office tour often results in connects you weren’t expecting. For example, we’ve performed office tours that have resulted in corporate donor relationships, free press, and connections to influencers. These unexpected outcomes were a result of connecting the right person to the mission, and having him volunteer an introduction that we would likely have never had. You never know what happens when you help a donor connect to the cause, and meet people within your nonprofit. Number nine, sending a unique gift from your work. If you work has artisan beneficiaries, or if you have a work program that produces products, create a custom thank you gift for donors. When you send a thank you gift for donors, you don’t want it to be too elaborate, as the donor might feel like you’re spending their donation on the gift instead of the work.

This type of gift could take many forms. It would be a basket, a unique wood carving, a picture frame, or any kind of small keepsake. Number 10, host a donor appreciation party. Invite your donors to a donor appreciation, party and share an event with them to recognize their support of your work. This is not an opportunity to ask for a donation, but instead, it’s a simple way to demonstrate gratitude for their continued partnership. What you will find is donors will naturally feel like giving to your organization when they go to a celebration like this. I recommend inviting a keynote speaker that will draw donors to your event. This could be simple as an hors d’oeuvres time for donors to meet your staff. Another effective use of this type of party is to invite a beneficiary who has seen different aspects of your program, and benefited from them. For example, if you have an organization that supports inner city kids, invite a college graduate who experienced the program as a youth to tell her story of how the program benefited her, and how she was able to graduate college because of your work.

Finally, number 11, send a custom postcard. Take a photo behind the scenes of your work, and send it to the donor. It’s a spontaneous and unique way to display gratitude, that will demonstrate that you care about the relationship with the donor. There’s apps where you can download them on your phone, take a photo, and mail a custom postcard right from your phone. Typically, these services are a dollar to two dollars each post card. You find them on the app store or via your major search engine. You can send a variety of different photos to different donors, providing a unique experience. When the donor sees that the work that you’re doing with a real photo taken by a real person, it’ll demonstrate authenticity. Creating trust in the donor will help to continue deepening the relationship with that donor. The key to building a relationship and getting to a second gift, or continuing to receive gifts from a donor is to build an experience where they truly believe that they’re part of your great work.

The donor has a desire to help make an impact in a given area, and she wants to know that the donation that she gave your organization will be used effectively, efficiently and with impact. The best way to continue to build this relationship is through a heartfelt thank you. I want to say thank you for your question. If you have a question that hasn’t been answered on Nonprofit Answers, please go to nonprofitanswers.org. You can submit your question there. You can type it out, you can call a voicemail and leave it as a voicemail. There’s a number of ways that you can leave a question for me. I value your questions. I truly appreciate them because it allows me to answer questions that are on the hearts of the people that I serve, other fundraisers that are in this space. Thank you so much for taking the time today to listen to this episode. Please, if you do have a question, submit it.

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