Relationship Fundraising: 7 Research-Backed Tips for Retaining More Donors

Communications, PR, and Marketing
Written By Julia Squire
Use these 7 relationship fundraising strategies to create lasting connections with your donors.

If your nonprofit struggles to retain donors, you’re not alone. A decline in donor support has been looming over most nonprofit sectors for over a decade, and unfortunately, many organizations have come to accept this trend as the “new normal.”

But the truth is, if you’re losing support, the onus is on you to put in the effort to build and maintain long-lasting donor relationships.

Relationship fundraising provides a road map to create lasting connections with your donors by making them feel valued, understood, and integral to your cause.

In a moment, I’ll share seven proven donor retention strategies to help you retain these vital supporters year after year. But first, let’s review the basics of relationship fundraising.

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What is Relationship Fundraising?

Diagram illustrating the KMV (Key Mediating Variables) model of relationship marketing, showing the necessary components for fostering strong stakeholder connections.

The KMV model of relationship marketing (Hunt & Morgan, 1994).

Relationship fundraising (also known as relational fundraising or relationship marketing) is a marketing and communications strategy focused on building and nurturing long-term donor relationships.

This donor-centric approach centers on understanding and catering to your donors’ needs, values, interests, and motives to cultivate a sense of commitment, loyalty, and connection to your organization.

The Benefits of Relationship Fundraising

  • Marketing ROI: A 10% increase in donor loyalty can boost your marketing ROI by as much as 150%.

  • Cost efficiency: Acquiring a new donor typically costs two to three times more than the amount of their initial donation. In contrast, it costs five times less to generate additional donations from existing donors who already have a relationship with your organization.

  • Valuable feedback: The more you interact with and listen to your donors, the more you’ll learn about who they are and what they expect from you.

  • Word-of-mouth marketing: Loyal donors share their positive experiences with friends and family, effectively promoting your organization to new prospects.

7 Proven Tips to Retain More Donors with Relationship Fundraising

Relationship marketing can take various forms, from requesting feedback to responding to emails. But the common thread is donor-centric communication.

The key to relationship fundraising is to make your stakeholders feel fantastic about supporting you. Adopt the view that your donors are not one vital resource but individual, cherished partners. This mentality will shine through all your donor-facing interactions, whether you’re thanking a donor for their gift or responding to a complaint.

And if you’re wondering how to use donor-centric communication to inspire your donors’ generosity, keep reading! I’ve perused dozens of peer-reviewed papers and literature about relationship fundraising and psychology, so you don’t have to. Here are seven research-backed communication tips to help your organization retain donors for life.

#1 Respect Your Donors’ Communication Preferences

In relationship fundraising, your goal is to go above and beyond to satisfy your supporters, so it’s important to understand and heed your donors’ preferences and expectations and tailor your relationship-building strategies to each donor.

Your donation forms should always ask donors for their communication preferences and include a note about how you intend to use their personal information. Some donors do not want to hear from you between gifts, and ignoring their preferences could cost you their trust and support.

With that said, it’s generally safe to assume that anyone who explicitly consents to receive contact from you is open to hearing from you. However, it’s good practice to give donors an easy way to edit their settings should they change their minds.

#2 Personalize Your Donor-Facing Letters and Emails

Studies have repeatedly confirmed that personally relevant messages help establish attachment, trust, and commitment and increase donor satisfaction, loyalty, and retention.

Modern technology makes it easier than ever to add a personal touch to your fundraising and marketing communications. However, only about 40% of donors perceive the emails they receive from nonprofits as personally relevant.

Designing your relationship marketing content to emulate one-on-one conversations can make your reader feel seen and heard as an individual. For example, writing your letters and emails in the first person singular tense (e.g., I, me, my) helps make the message feel conversational to the reader.

When I write direct mail copy, I insert flagged copy blocks for you to modify with database-sourced information, such as the donor’s first name and city. I also create several unique versions of each letter to target various donor segments. For example, a letter I write to lapsed donors might include a line like, “It’s been two years since your last gift. Have we done something wrong?”

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#3 Keep Your Nonprofit’s CRM Database Up-to-Date

An up-to-date CRM database makes it very easy to personalize your messages. If your organization doesn’t already use a database like Raiser’s Edge or Salesforce, investing in one of these services or something similar should be your #1 priority moving forward.

Beyond message personalization, you can refer to your database anytime to refresh your memory and view information about your donors and donor relationships (e.g., demographics, gift history, connection to your mission, etc.).

A well-maintained database can also help you identify patterns in donor behavior, such as commonalities between lapsed donors, which can provide valuable insights to improve your transactional and relationship fundraising strategies.

#4 Recognize Your Donors’ Support

A few years ago, I donated $75 to a reputable nonprofit without previous contact. I only knew they received my gift when they sent me an email solicitation two days later. Unfortunately, the organization never acknowledged, confirmed, or thanked me for my contribution – a clear sign they lacked a proper thank-you procedure.

If I didn’t understand how mailing lists work, I might think the organization was being rude. Either way, this kind of faux pas raises the question, “If this organization can’t complete the most basic of tasks, can I trust them to spend my money wisely?”

Respond to every donation with a personalized thank-you note within 48 hours. Make sure you Illustrate how the reader’s generosity makes a palpable difference: “Gifts from generous people like you are the only reason we can provide food and shelter to the hundreds of dogs we care for at our facility”).

Consider reciprocating your supporters’ generosity with memorabilia, such as a coffee mug, t-shirt, or bumper sticker featuring your organization’s name.

You might even consider asking your supporters how they’d prefer to be thanked. This question in itself demonstrates gratitude and appreciation, and the answer will give you valuable insight into their motivations (e.g., prestige, tax deductions, public recognition).

When asking for more money, acknowledge the reader’s past generosity in the appeal. Describing the reader’s behavior as “kind,” “generous,” and “helpful” can motivate them to behave in corresponding ways.

#5 Keep Your Donors Engaged

Engaging your donors with interesting and interactive content to incentivize continued support.

Several studies suggest a sense of belonging to a community with shared values helps drive donor trust and commitment. Foster community through in-person social activities like wine tastings or game nights, or virtually via Zoom meet-ups or private social media groups.

Many organizations don’t share purely donor-centric content on social media. That’s a huge mistake! Your current AND future donors are on social media. Meet them where they are – share content that caters to their interests, reply to their comments, and interact with their posts. You’ll be glad you did!

 
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#6 Be Transparent About How You Use Donations

Your donors send you money as a way of saying, “I trust you to exercise good judgment and use this money for its stated purpose.”

In nonprofit fundraising, impact is the one thing your stakeholders expect in exchange for their gifts, and transparency is vital for building donor trust and commitment.

Demonstrate transparency and keep your stakeholders in the loop by including brief recaps of recent board meetings and overviews of your strategic plans in your newsletters and other donor-facing communications.

You don’t need to send complete financial documents (like tax filings and annual reports) to your donors – in fact, doing so may backfire – but recent copies should be available and easy to find on your website.

 

#7 Provide Excellent Donor Support

If satisfaction is the heart of donor loyalty, feedback is the backbone of relationship fundraising. It’s essential to ask your donors for feedback on a regular basis so you can track, measure, and even increase their satisfaction, trust, commitment, and loyalty.

Initiate one-on-one meetings and two-way phone calls with your mid-size-plus donors to show you value their partnership with you. Exercise empathy and attentiveness (i.e., active listening techniques) to strengthen the donor’s emotional connection to you and your organization.

For smaller donors, personalized surveys with open-ended questions (e.g., “How do you hope we spend your donation?”) are perfect for learning about their interests and motivations.

Every nonprofit should also set up a simple system for receiving and responding to unsolicited feedback and complaints. Your donors should know where to submit their concerns, and make sure your organization always responds promptly and empathetically to complaints, regardless of their nature.

Conclusion: Building and Maintaining Life-Long Donor Relationships

If your organization is one of the countless nonprofits experiencing a painful decline in donor support, relationship fundraising can help you regain your donors’ unwavering loyalty over time.

Remember, your donors are more than just a resource – view and treat them as your cherished partners:

  • Review and update your CRM database: Frequently update your CRM database for quick access to accurate information about your donors. If you don’t already have a database, get one now.

  • Personalize your messages: Use database segments and strategic writing techniques to personalize your donor-facing messages.

  • Show appreciation: Take every opportunity you can to show your stakeholders you value them; respond promptly and sincerely to their messages, feedback, and gifts.

  • Foster community: Arrange social events and set up online groups to foster community among your donors.

  • Understand donor preferences: Learn about your donors’ values, preferences, interests, and motives to fine-tune your marketing content and strategy.

  • Be transparent: Be open about your organization’s spending practices and impact.

By following these proven strategies, your nonprofit can build and nurture long-standing donor relationships. If you'd like expert help crafting direct response fundraising copy and creating engaging social media content, contact me to discuss how we can work together to build a loyal donor base for your organization.

Contact me to discuss a relationship fundraising strategy that works for you.

Relationships take time to grow.

The sooner you contact me, the sooner you get results.

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Julia Squire
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