For nonprofit organizations to thrive and benefit from donor management, they must have a mutually beneficial relationship with their donors. A healthy bond is based on honesty and trust. Establishing a strong sense of transparency and maintaining open lines of communication ensures this trust and helps nonprofits build and retain donors over time.
Show results of Donor management
The most important thing a nonprofit can do to earn constituent trust is demonstrated measurable results. Getting Attention stated that unless organizations can prove the money they are taking in from their donors is going to the mission they’ve outlined, there is little hope that the funding will continue.
In one notorious example mentioned by Getting Attention, the Red Cross established The Liberty Fund in the wake of the World Trade Center attacks on September 11, 2001. The $564 million raised came from people anticipating the money would go to The Liberty Fund and those directly affected by the tragedy. However, by November 2001, only $154 million had been allocated to the cited cause. Even though much of the funding was being set aside in preparation for future events similar to 9/11, the donors were unhappy, to say the least. Their trust had been taken advantage of, and it’s likely many have given their money elsewhere during tragic events since.
The lesson this scenario teaches nonprofits is the importance of making promises. Do not declare a promise if it cannot be met. Or, if things change, be open and honest with funders. Knowing where their finances are going is important to them, as they’ve taken the time to determine a cause worthy of their time and energy.
Open more doors for donors
Money, however, is not the only way constituents can participate in giving. Nonprofit Hub encouraged organizations to empower their donors to give in other ways. Their mental, emotional and intellectual services should be valued as well. When donors are actively and physically contributing to a cause, the results feel more tangible and immediate. For example, Habitat for Humanity enlists volunteers to not only donate funding but time and manpower. Nailing the tiles into a roof for a family in need is a memory that lasts longer than mailing a check to an invisible entity.
All nonprofit organizations should post a code of ethics, mission statement, core values, and IRS Form 990s, according to the Council of Nonprofits. This demonstrates their commitment to their cause and lets constituents know they are open about finances. Ethical conduct and responsible, honest leadership are two qualities donors seek out when they determine which organizations will receive their support.
A tempting position for many nonprofit organizations, especially in times of low profit or just before year’s end, is to accept large donations from influential parties. While this may seem like a good idea, it can backfire. There is a chance that an extremely influential small group or individual will attempt to steer the mission of a nonprofit in a direction that they prefer. Letting this happen results in the organization appearing weak or too easily swayed for financial reasons. Stay true to the mission and the donors will follow.