[VIDEO] Creating Scalable Fundraising Systems for Your Nonprofit

In this webinar, Joe Garecht will show you what a donor fundraising system is, and why it is such a powerful tool for your nonprofit.

Full Transcript:

Steven: All right, Joe, is it okay if I go ahead and kick things off officially?

Joe: Absolutely.

Steven: All right. Cool. Good afternoon, all of you. I guess good morning if you are way out on the West Coast. I know we’ve got some Hawaii folks here. Either way, thanks for being here for today’s Bloomerang webinar, “Systemize Your Fundraising! How to Raise More by Creating Scalable Fundraising Systems for Your Nonprofit.” My name is Steven Shattuck and I’m the Chief Engagement Officer over here at Bloomerang and I’ll be moderating today’s discussion as always.

And just a couple of housekeeping items before we get going here. I just want to let you all know that we are recording this presentation and I’ll be sending out the recording as well as the slides later on today. If you didn’t already get the slides, you’ll get them for sure along with the recording. So, just be on the lookout for an email from me with all those goodies. You’ll get that today.

Most importantly, as you’re listening along today, please feel free to use that chat box right there on your screen. I know a lot of you have. That’s awesome. We love to keep it interactive. We’re going to save some time at the end for Q&A. So, send us your questions, send us your comments, let us know what you’re thinking and we’ll try to answer as many as we can before the 4:00 Eastern hour. You can also do that on Twitter. I’ll be keeping an eye on Twitter if you want to tweet us.

And then one last bit of housekeeping—if you have any trouble with the audio through your computer, we find that sometimes the audio quality is better by phone. So, if you have any trouble, don’t give up on us completely. Try dialing in if you can and if you don’t mind doing that, since it doesn’t rely on internet connections and all that fun stuff, there is a phone number just for you that you can dial into in the email from ReadyTalk. It went out about an hour ago, half-hour ago-ish. Check that out if you have any trouble. We want to keep you on here the whole time, for sure.

If this is your first Bloomerang webinar, I just want to say an extra special welcome to you all. We do these webinars just about every Thursday of the year. We do about 45 webinars. We only miss some of those holiday weeks and any vacation I take, one of our favorite things we do here at Bloomerang.

So, definitely want you to check out more of our webinars later on if this is your first one. But if you’re curious about Bloomerang, our core business is donor management software. That is what Bloomerang is. That’s what we offer. If you’re interested in learning more about that or taking a look at our software, check out our website, you can even download a quick video demo and see it in action, don’t even have to talk to a sales person if you don’t want to do that. Who wants to do that, after all?

So, check us out. Don’t do that now. Do that afterwards because we are going to have a great presentation from this gentleman right here, Joe Garecht. Hey, Joe. How’s it going?

Joe: Fantastic. Thanks for having me.

Steven: Yeah, this is awesome. You’re making your Bloomerang debut. I can’t believe it’s taken us five ears, but I’m really happy to have you. Joe’s been someone I’ve been following for a long time, great online trainings he has done over the years, great blog, definitely follow him on Twitter.

Joe, I just want to brag on you for a little bit before I turn things over to you. Check him out. He’s the President over at Garecht Fundraising Associates. He’s got over 20 years’ experience training fundraisers, board members, nonprofit executives, all those people. He’s actually trained over 50,000 fundraisers in his career. He has also been in your shoes. He’s been on the other side of the aisle.

Even though he’s a consultant now. He is a former ED. He was the ED over at BLOCS, which is the Leadership Organized for Catholic Schools and he was the Development Director for the Philadelphia Children’s Alliance. He’s dialing in from Philadelphia, proud resident of the Philly area, getting really excited about the Eagles and Villanova, but he settled down after all those victories and he’s got a great presentation for us. So, Joe, I’m not going to take away any of your time. Take it away, my friend.

Joe: All right. Well, thank you for that. Thank you to everybody who’s here today. I’m really, really excited to be with you. As Steven said, calling in from Philadelphia today and very, very excited to talk about one of my favorite topics, which is how to systemize your fundraising. I’m going to tell you all about why that’s one of the most important things you can be doing if you want to raise more money this year and in the future for your nonprofit.

Steven’s already told you a little bit about me, so we can skip that. Today, what we’re going to be talking about is something that will transform your nonprofit, something that’s going to allow you to supercharge your fundraising and raise far more money with far less hassle. After, as Steven said, about 20 years in fundraising and working with hundreds of nonprofits of all different shapes and sizes, what I’ve learned is that building fundraising systems is the easiest and most effective way to dramatically improve fundraising for your organization.

Now, when we talk about fundraising systems, even though this is a Bloomerang webinar, we’re not talking about your donor database system or other technology at your nonprofit. Those things are important and are a foundation for great fundraising systems. But when we talk today about building fundraising systems, what we’re talking about are methodical approaches to finding lots more donors, to communicating better with your donors, to asking your donors for money, to stewarding your donors. So, that’s what we mean. We mean donor fundraising systems.

So, here’s the plan for today’s webinar. First, we’re going to take a look at what fundraising systems are and why they’re so important for your nonprofit organization. Then we’re going to look at an example of a fundraising system. We’re going to see what a good fundraising system looks like.

Then we’re going to talk about how to develop strong fundraising systems for your organization and then we’re going to walk through the process. We’re going to walk through an example of creating an actual and successful fundraising system for your nonprofit. Then as Steven said, we’re going to have lots of time for questions and answers. So, stay tuned for that.

Now, the vast majority of nonprofits that I’ve worked with are struggling when it comes to fundraising. Now, listen to what I mean when I say struggling. These organizations may be raising enough money to keep their programs going or even growing. In many cases, they’re doing it with far too much stress, far too much constant staff turnover and with constant friction in their development program.

I’ve worked with hundreds of small and midsize and even large nonprofit organizations during my career and found that for most of them, fundraising is a constant point of struggle. At many of them, the staff and board have a feeling there’s got to be a better way to fundraise, but they’re not quite sure what it is.

Now, the reason that most nonprofit organizations have that feeling, the reason why they struggle a little bit when it comes to fundraising is because they don’t have systems in place to make their fundraising knowable and scalable. So, what does fundraising look at most organizations? In my experience, at most nonprofits, the fundraising program is based on a vague generalized fundraising plan, but the actual development strategy for implementing that plan is created on the fly.

At these kind of organizations, a brand new cultivation path may be created for every new donor, meaning every time a new midlevel or higher dollar prospect comes into the organization’s orbit, the staff tries to figure out what’s the single best way to approach and cultivate this donor even if no other donor is cultivated that way currently. Most organizations’ fundraising ideas are circulated among the staff and the board, executives, consultants, sometimes even donors and volunteers. Everybody’s got ideas.

When an idea builds up enough support or support from the right places at the organization, it’s added to the fundraising program. That’s how you end up with so many new events and new fundraising appeals and a walk-a-thon here and there, a golf tournament, all these new ideas are started often because there’s fundraising planning by committee. So, because things are constantly changing at organizations like this, nonprofit fundraising programs like this are constantly reinventing the wheel when it comes to donors. The fundraising plan is always in flux.

What is the result of this? Well, it leads to staff, volunteer and donor burnout. It ensures that the fundraising strategy is set by the loudest voices, not by data-driven best practices. The solution is to create fundraising systems for your nonprofit that guide strategy and make things as easy as possible for the staff.

So, what is a fundraising system? Well, simply put, a fundraising system is a strategy for streamlining your fundraising processes, which results in your nonprofit being able to raise far more money with far less hassle. Now, a good fundraising system has a couple of key characteristics that are present in every good fundraising system.

First, a good fundraising system clarifies your development program and it makes your fundraising knowable. This is because systems are testable. You can implement a system and you can track the results. Through testing, you can see whether the systems you establish are successful or not and you can tweak them until they are successful. Once you have good systems in place, you’ll know what results you can expect.

For example, you’ll know that if our nonprofit follows a certain strategy when meeting a new prospect, we’ll have a higher likelihood of turning that prospect into a donor. We know what those things are, A, B, C, D and we know it because it’s worked for us in the past. As we’re talking about the characteristics of a good fundraising system, if it’s a lot to digest, stay tuned because, again, we’re going to be walking through how to do this with a real life example of a system for your nonprofit.

So, again, a fundraising system makes your fundraising knowable. Because systems make your fundraising process knowable, they also make your fundraising scalable. Once you have good systems in place, you’ll be able to add more donors or activities into the system and know what the outcomes will be. You’ll know that the outcomes will remain the same.

So, once you have a good online fundraising system, for example, you’ll be able to increase the number of online prospects that you put into that system and know the system will scale to accommodate the new prospects. So, a good fundraising system is knowable and scalable.

A good fundraising system also clarifies decision making. Good fundraising systems include decision points that clarify decision making for your team. Far too many nonprofits waste bandwidth trying to customize decision making for each donor action. Many organizations are reluctant to make decisions that conserve necessary resources based on a cost benefit analysis. For example, many development offices will spend time and money communicating with a prospect long after it’s clear that the person will not and will likely never make a gift to the organization.

A good fundraising system makes decision making easier. It lays out a set of actions and then when those actions have been taken, it details a decision point. Thus, a nonprofit may take a series of five actions with new individual donors that come into their orbit and then have a simple decision to make about whether or not the prospect will remain on the prospect list. The organization doesn’t need to wring its hands over each new prospect that drops from the rolls. Instead, you can rely on the system to make the determination and have confidence in the result.

A good fundraising system also has defined roles. A successful nonprofit fundraising system lays out defined roles for the staff, the board members and the volunteers. Good systems detail the responsibilities that everyone has and provide accountability for your entire team.

A good fundraising system also conserves resources. Very few nonprofits have excess capacity. Because they’re knowable and scalable and allow you to make good decisions based on your return on investment, fundraising systems allow you to conserve resources by doing more with less. Most nonprofits that implement good systems can dramatically increase fundraising without needing to hire new staff or invest in new technology.

Then finally, good fundraising systems can be represented schematically. They could be represented by a chart or a diagram that makes action items and decision points clear and easy to understand. We’re going to look at an example of one of those diagrams in just a minute.

So, now that you know kind of the characteristics of a good fundraising system, the question is why do fundraising systems matter? This is why. Fundraising systems matter because they allow your nonprofit to raise more money with less stress, less hassle, and fewer resources. Development offices that don’t have good fundraising systems in place feel chaotic and fundraisers there often struggle to keep their head above water with the constant sense that the organization is one bad month or one missed check away from insolvency or from having trouble with their programs, being able to carry out their programs.

I call this the fundraising treadmill, the feeling that no matter what you did this past month, come next month, you’ll be starting from zero again and it will be just as hectic and chaotic as ever. Good fundraising systems allow you to get off the treadmill by implementing a knowable, scalable system that provides the revenue your organization needs to thrive and it does that because it allows you to focus on the return on your investment—your investment of time, your investment of money, your investment of energy, your investment of bandwidth at the organization.

Remember, having fundraising systems in place makes the development process simpler and eliminates the guesswork from your fundraising program. Fundraising systems operate under the 80-20 principle—20% of your efforts are going to result in 80% of your fundraising results. So, you want to create systems based on those 20% of your tactics that produce 80% of your revenue and resist the urge for constant customization. In my experience, that customization could take up 80% of your time but only produce 20% or less of your results.

Now, when we talk about fundraising systems, there are many, many different types of fundraising systems that you can implement at your nonprofit. What you see on your screen are the most common types of systems that organizations implement. They implement prospecting systems, which are sustainable strategies for bringing in new donors year after year. They implement cultivation systems. Those are methods for easily and effectively communicating with your donors and building relationships with them, even with limited time and resources.

Nonprofits can have ask systems, which are winning formulas for segmenting donors and making asks through different tactics like meetings, phone calls, direct mail, email, events, etc. You may have a stewardship system, a plan for systematically thanking and recognizing your donors for retaining them and upgrading them and for getting them to refer new prospects to your organization.

You can have a donor communication system, a step-by-step method for reaching your donors through newsletters, annual reports, snail mail and appeal letters and more. You can have an events system for easier, hassle-free fundraising events that raise more money in less time. You may want an online fundraising system, a plan for raising more money through your website, email, social media, crowdfunding and more or how about a board engagement system?

A formula for systematically getting your board engaged in fundraising without making the board nervous or making them feel resentful. Perhaps the best way to understand fundraising systems is to see an example of what a good fundraising system looks like. We talked about how most fundraising systems can be represented schematically. This is what one of those schematics might look like.

This is a simple example. It assumes that you’ve tested all the strategies that we’re talking about and that each of the tactics is working for your organization. So, let’s say you’re a small nonprofit whose board is being asked to introduce their network to your development staff. Your fundraising system for board member introductions might look like the chart you see on your screen.

The board member might suggest the prospect to your staff. The staff then does its job. It gathers information and researchers the capacity of the prospect and prepares an introduction. The board member then takes action. He or she makes an introduction via email, cc’ing the staff member. The staff member replies to the email and also sends an introductory packet, perhaps electronically, to the prospect. The staff also follows up with an invitation to your board member’s contact for that person to attend a non-ask event. That’s a point of entry event or a cultivation event, some type of event or tour where they can learn about your organization without being asked for money.

Then you come to a decision point. Did the person attend? If the person did attend, great. This organization has decided to send a copy of the paper newsletter to everyone who attends with a note thanking them for attending. Then they walk the person towards an ask. If this person didn’t attend, this organization calls to try and set up a one on one meeting. Now, of course, this is a simplified example. Your system would continue with additional actions based on if the person makes a gift or if the person says yes or no to the one on one meeting.

Every nonprofit is going to be different, but every nonprofit, no matter how small or large can benefit from building scalable fundraising systems for their organization. Of course, now that you know that fundraising systems are important, we talked about some of the most helpful types of systems, there were a dozen on that list, what the most helpful types of systems for the average nonprofit, the question is what one system or group of systems should you start with as you work to systemize your fundraising program.

If you’re going to systemize something, what should you start with? Well, generally, the most powerful systems, the ones with the power to quickly transform your organization, they’re the systems relating to the four core segments of the donor lifecycle.

So, for that reason, I recommend that the first four systems you create at your nonprofit are a prospecting system, cultivation system, an ask system, and a stewardship system. Frankly, I usually recommend that you start with your stewardship system, not with prospecting. Your board, your executive director, your entire fundraising team will want to see some immediate rules from your systemization efforts. Putting a system behind your stewardship of current donors will allow you to see results fairly quickly.

By putting a scalable process in place for retaining donors, upgrading them and asking them to refer new donors, you’ll immediately bring in new revenue and new prospects from people who already know and care about your mission. If you’re a startup organization, it’s a different story. You won’t have that many current donors to steward, so in that case, I recommend you start with your prospecting system.

Okay. Now that you know what a fundraising system is and what a good fundraising system looks like. Let’s talk about how to develop an actually specific fundraising system for your nonprofit. Let’s walk through it. Remember, your fundraising system are specific real life processes for each of your fundraising strategies.

So, since we said that in general, the first system that most nonprofits should develop is a donor stewardship system, let’s talk about how to develop a good donor stewardship system for your organization. Now, when it comes to building out a specific fundraising system for your nonprofit, you’re going to need to make sure that each system has the following four things—goals, timelines, responsibilities, and segmentation. So, let’s talk about each of these things.

First, our defined goals—one of the key things for any fundraising system that you’re building is that it should have specific goals and objectives. Many nonprofits think that when it comes to donor stewardship, the only objective is thanking your donors on time. That’s far from the truth. Thanking your donors is important. It’s very important. But all fundraising systems need specific goals. The donor stewardship process is much more than just thanking. There are actually three very important and very measurable goals for your donor stewardship system.

So, those three goals as you’re building out that donor stewardship system are first, donor retention—that means keeping the relationship with your donor strong enough that the donor continues to give year after year. To accomplish this goal, you’ll need to thank and recognize your donor so that they know how important they are to your organization. And that you need to continue to communicate with them to keep your nonprofit top of mind for future giving. You’ll also need to make occasional renewal asks to seek their continued financial support. So, the first measurable goal for your donor stewardship system is donor retention.

The second measurable goal is donor upgrades. This means building on the relationship you already have with the donor so that you’re in a position to ask them for more money this year than they gave last year. This is called upgrading your donor. It’s vital to the success of growing organizations. In order to upgrade your donors, you’ll need to build a system for getting them gradually more involved with your organization. Your donors will only upgrade when you ask them to. So, you’ll need to build upgrade asks into your donor stewardship system.

And the third goal for your donor stewardship system is donor referrals. A referral is when your current donors open up their networks to you and introduce you to their friends, family, neighbors, coworkers, vendors, and clients. You then build relationships with these referred prospects to build trust and ultimately ask them for gifts to your organization.

In order to earn referrals, you need to continue deepening the relationships you have with your current donors. You need to cast a big vision for them and you need to directly ask them to make referrals to your team. So, those are the three knowable and measurable goals for your donor stewardship system.

Now, you should be measuring your donor stewardship process by asking yourself how many donors are we retaining each year? How many donors are we upgrading each year? How many donors refer new donors each year? In fact, Bloomerang has some great tools on their dashboard for tracking things like donor retention.

So, you definitely want to be looking at the metrics for the systems that you build. Bear in mind that when asking these questions, what constitutes a good answer will differ based on the organization and on your fundraising resources and strategies. Generally, though, you’ll retain more of your donors than you upgrade and you’ll upgrade more of your donors than those that are willing to make referrals to you.

Now, in addition to define goals, every good fundraising system needs to have defined timelines. Now, don’t be scared, this is just an example of a process and yours may not have anywhere near this number of timelines, but successful systems for fundraising include action steps for your development strategies along with timelines and deadlines for each. Deadlines keep everyone working at the right pace and ensure that everyone knows when items will be completed.

So, for example, your donor stewardship system may set a couple of different timelines. You may say that every donor who makes a donation over $50 will get a thank you call from a volunteer within 48 hours of you receiving the gift. You may say that every donor will receive a standard thank you letter and the thank you letter will be mailed within seven days of you receiving the gift.

You may say that all new donors will be invited to a non-ask or cultivation event at your office and the invitation to this non-ask event will be emailed to the donor four weeks after they make their first gift. You may say that all donors will receive your email newsletter and that the newsletter will go out on a monthly basis and that it will be sent during the third week of each month. Those are examples of firm timelines and deadlines and they help get everyone on the same page and ensure that you can develop a fundraising strategy that’s effective.

Now, in addition to defined goals and timelines, every good fundraising system needs to list responsibilities. By this, I mean that your systems need to say who is responsible for each action item in the system. You can do this by listing the staff position at your organization that will be responsible for each task. Including this information in your fundraising systems helps avoid confusion and ensures that everyone is clear on which team member is responsible for each task.

It also allows everyone to see how all of the tasks work together to create a sustainable donor fundraising system. So, for example, your system could say the following—all new donors will be added to the email newsletter within seven days by the development coordinator or all donors who give $50 or more will receive a thank you call from a volunteer and the donor database administrator will oversee these calls, or you can say that donors who give over $500 will receive a handwritten thank you note within ten days and this note will be written by the development director. Those are responsibilities that are laid out for your fundraising system. They say exactly who’s going to be doing what.

These strategies, these deadlines and these responsibilities are just examples, of course, and they’ll differ based on the unique needs and resources of your nonprofit.

Now, the final thing that every good fundraising system needs in addition to goals, timelines and responsibilities and segmentation. Now, let’s face it. Chances are, your nonprofit’s development program is understaffed and under-resourced. That’s the fact for most nonprofit organizations. Even if it’s not, chances are you don’t have more resources than you need at your disposal.

Now, because you’re working with limited staff time, limited money, limited bandwidth, you’ll need to segment your donors and make decisions about how much time and money you can spend on each. While it may be beneficial for your team to call every single donor who makes a gift to your nonprofit to thank them for their gift within 48 hours of receiving the gift. You may only have the time, the staff time to do less. You may only have one full-time fundraising and a very limited supply of board members to help you make those calls. So, you may decide to segment your donors and only call those who make a gift of over $100 or over $250 or over $1,000 or whatever makes sense for your nonprofit.

Likewise, you may decide that you have the time to do twice yearly stewardship visits with all of your major donors who give $5,000 or more to your nonprofit and twice yearly stewardship calls to all your donors who give $1,000 or more per year to year nonprofit. Good donor systems establish donor segments to make sure that you’re using your time, money, bandwidth, and other resources in a responsible manner, by investing them in a way that will result in maximum return for your nonprofit and for the people that you serve without leading to staff burnout.

So, remember, for each of the fundraising systems you build at your nonprofit, you’ll want to include defined goals, timelines, set responsibilities, and good donor segments. Include these four things and you’ll be off to a great start in launching successful systems for your nonprofit.

Now, one thing I do want to tell you is this—don’t be scared of goals, timelines and responsibilities in your donor development systems. Many nonprofit fundraisers and executive directors and board members get wary of putting too many specifics in their donor systems and in their fundraising plans as a whole. They get worried about putting measurable goals, set timelines, and define responsibilities in those plans.

Sometimes, this reluctance stems from a desire to shirk accountability, but more often, particularly when you’re creating your first donor systems, it comes from a fear that you’re being too aggressive with your timelines and setting your team up to fail by creating deadlines and goals that you’re not going to be able to meet.

My advice is not to be afraid of setting goals, timelines and responsibilities for your fundraising program. I say this first because I do want you to be aggressive in your fundraising planning and your systems. Remember, your nonprofit does great work and you serve lots of people and you make the world a better place. You need to raise money in order to do that work. If you raise more money, you’re going to be able to do more good in the world.

So, you should be aggressive in setting goals and timelines so you’ll be able to raise more money than ever before. Believe me, if you’re building up the kinds of fundraising systems we’re talking about here today, you’re going to be able to do more with less investment of time, money, and bandwidth because you’re building knowable and scalable fundraising systems for your organization.

I also say not to be afraid because all the systems you’re building are testable and changeable, particularly when setting up a new fundraising system for the first time, chances are you’ll make mistakes. You’ll be too aggressive on some goals. You’ll be not aggressive enough on others. You’ll say that you’re going to write a handwritten note to every donor who gives over $100.

But you’ll realize that you just don’t have the time and that it needs to be changed to every donor who gives over $500 or your plan will say you’re going to hold two non-ask cultivation events at your office every year, but after the first year, you realize the events are very successful and you have the bandwidth to hold four of the events every year.

So, you do that. That’s okay. Your systems can and should change based on the results you’re getting from each strategy. That’s the benefit of systems. They’re scalable. They’re testable. They’re knowable. Your systems should be aggressive but they’re not set in stone. Evaluate the successes and failures of your systems each year but adjust your goals, your timelines, your responsibilities and your segments accordingly.

Now, the stuff we’re talking about, even though we’re talking about donor stewardship as an example system. The stuff we’re talking about applies for every type of system you’re building. Remember that.

Now, let’s get back to our example of creating a donor stewardship system for your nonprofit. We talked about the fact that you need to include goals, a timeline, define responsibilities, and donor segments in your system. The next thing as you’re creating any system is to think through the best practices around that system, whether it’s online giving, whether it’s a capital campaign or in this case, donor stewardship. What are the best practices around donor stewardship for your type of nonprofit?

The goal for creating any kind of fundraising system is to draw on those best practices, to tweak them to fit your organization circumstances and at the same time, think big, and include new things based on your nonprofit’s unique mission, vision and resources.

So, back to donor stewardship. For donor stewardship, if you’re creating a donor stewardship system, I usually say there are seven primary best practices you’ll want to keep in mind as you develop your stewardship system. So, we’ll walk through them real quickly so you can see what I’m talking about when I say best practices and the types of best practices you should be looking at as you create your donor stewardship system or any fundraising system for your nonprofit.

First, donor stewardship is a process. So, the first best practice to remember, stewardship isn’t a one-time thing. We talked about this early on. It’s not just saying thank you and it’s not just adding the donor to your mailing list. That’s not good stewardship. Your nonprofit should have a stewardship system in place that specifically spells out what will happen when someone makes a gift. Remember, for each segment of your donors, this is a process. The system is a process.

Donor stewardship requires communication. That’s another best practice. Stewardship is all about communication with your donors. That means calls and emails and non-ask events and tours and visits and also for donor stewardship and best practices to make the communication a two-way street. You want to have conversations with your donors and listen to them, not just talk at them.

There’s easy ways to do that. You can take surveys. You can ask them for advice, which is one of the best ways to make your donors feel invested. My suggestion as a best practice for donor stewardship is you should be making two to three non-ask communications for every ask that you make as a minimum. If you’re asking for donors’ money three times a year, you should be talking with them through different mediums, even just an email newsletter at least two to three times in between each of those asks.

Another best practice, stewardship requires transparency. People make a decision to give to your nonprofit based on their heart, but they quickly want to follow it up with their head. They make a gift commitment based on emotional response, but they want to back that up with their head. They want to confirm they’ve made a wise decision. Your mission moves people and makes them want to give and they trust you to make a difference, but guess what? Trust requires transparency.

So, you need to tell people how you spend their money, either individually—if they’re a major donor, you can say exactly where their money went or you can tell them in the aggregate where their money went. If they’re a lower dollar donor, how you’re spending money to make the world a better place. And don’t limit this type of transparency to your annual reports either. As a general rule for stewardship, you want to constantly remain donors how they’ve made an impact and how you, as you’re stewarding them, are being a good steward of their investment, of their gift.

Another best practice as you’re creating a donor stewardship system is to remember that the best donors give more than money. Simply put, the best donors, the ones who stay excited, who give year after year, who increase their gift size over time, they give more than just money. They give their time and expertise to your charity. This means you want to get your current donors to participate on committees, to give you advice, to volunteer for you, to write letters to the editor on your behalf, whatever ways you can get them involved more than just giving money. Now, of course, not every donor will not want to get involved that way, but many will.

Another best practice, you need to keep the process fresh and exciting, switch things up. Make sure the donors get different communications each year. You don’t want to switch everything up, but you do want to keep things fresh.

So, your donors should be getting a variety of messages and in some cases a variety of format, all tied to your core mission and your case statement. You want to give them different events and different recognition opportunities every year. But again, not everything should be new. Keep the things that are working but add some new things each year to keep things fresh and exciting.

Another key best practice for donor stewardship is that recognition is crucial. They don’t like to admit it, but donors like to be recognized in your annual reports, in naming opportunities, in donor only events, with lapel pens and other branding materials, with donor giving clubs, with recognition on your website and in your newsletter, recognize your donors and build that in to your donor stewardship system.

The final best practice for donor stewardship is to solicit sparingly but do solicit. There are two extremes when it comes to donor stewardship programs—some nonprofits solicit too much and the donors feel bombarded by appeals. Some, many, solicit not enough and donors never get true asks as opposed to donate now buttons and email newsletters, which aren’t real asks. Both are mistakes. So, you want to be soliciting during the stewardship process but sparingly.

So, those are the best practices. For donor stewardship, no matter what system you’re building, you want to think through what the best practices are and tweak them for your organization. You also need to remember as you’re creating a system that there are lots of different tactics you can use as part of that system. For donor stewardship, there are a ton of different ways that you can steward your donors. You’ll want to include a mix of tactics in your development systems, in your fundraising systems. So, what are the most common ways to steward your donors?

Here are some of the most common ways to steward your donors. Newsletters and email newsletters—those form the backbone of the majority of nonprofit stewardship processes, particularly the email newsletter.

A regularly updated website. If you’re going to steward donors, the key there is regularly update it. If you just have an online brochure, it doesn’t give people a reason to come back. So, you want to have a website that is informative, that’s entertaining, that’s compelling, that gives people a reason to come back. If you do and the donors want to come back, then it can truly be considered part of your donors stewardship program.

Non-ask events and cultivation events, those are some of my favorite ways for stewarding donors. That’s where you have an event at your nonprofit that targets your current donors but doesn’t include a fundraising ask or a cost of admission. It just gives your donors a chance to move closer to your organization by meeting your staff, by asking questions, by taking a tour, by hearing more about your mission, perhaps by hearing stories of some of the clients that you’re serving or some of the work you’re doing.

One-on-one or small group events are another way to steward your donors. There’s nothing, nothing, nothing as effective as meeting personally with donors. Obviously, it’s a tactic that’s reserved usually for larger donors, although many nonprofits have found success with small group meetings for midlevel donors, perhaps around a particular topic or a roundtable or another opportunity for your donors to have some personal interaction in a way that makes sense based on your organizations bandwidth.

Phone calls also work very, very well for donor stewardship, particularly for stewardship. So, the question becomes why aren’t you calling more of donors. I’ve never been—this is the truth—I’ve never been at a nonprofit that was using the phone as much as it should be. I’ve never worked with a consulting client nonprofit who’s been using the phone as much as it should be. Often, we’re way too reluctant to pick up that phone and make a call.

Guess what, 75% of that time, when you make that call, you’re going to leave a voicemail. That’s okay. It’s a great way to say, “You’re so important to our nonprofit that I’m taking time to actually give you a call. I’m risking that chance that you’re going to get on the phone and actually answer and we’re going to have a long conversation and that’s okay. That’s how important you are to our nonprofit.” Obviously, you’re not going to be able to do that with everybody, but for many of your major donors, you probably can, probably more than you think.

Participatory fundraising events, things like walk-a-thons are actually can be donor stewardship opportunities. I know that they involve an ask and most stewardship doesn’t. But they’re a chance for your donors to get together with other donors who support your organization and have fun while supporting your organization. So, in many ways, they can be a great stewardship opportunity.

Special action campaigns, things like letter writing campaigns and rallies and other special action campaigns. They can help your donors feel like an important part of your team. If they’re not appropriate for every nonprofit, they may be appropriate for yours.

Donor giving clubs are a fantastic way to steward your donors. They’re basically a donor stewardship system in a box. Donor giving clubs where they’re stratified and tiered by how much donors give or what level of involvement they have and people get certain perks in return for belonging to those giving societies.

Also, a lot of nonprofits are successful using branded giveaways—lapel pins, pens, calendars, things where the organization’s name and logo that help your donors feel like they are part of the team.

Now, the best thing to do when creating your donor systems for the first time is to take what you’re already doing at your nonprofit and use it as a baseline. So, for our donor stewardship system, think through all the stewardship activities you’re already doing, from thanking your donors to getting ready to make the next ask. Then jot those strategies down and make sure you understand what you’re already doing at your organization.

Then you want to review those strategies with an open mind. How do those strategies live up to the best practices for whatever type of system you’re building? If you’re sending an email newsletter every day, how does that live up to the best practices in donor communication? Probably too much. If you’re sending an email newsletter twice a year how does that live up to the best practice? You’re probably sending it too little.

So, think through how it lives through the best practices, figure out what’s working for your nonprofit and what isn’t, figure out what your return on investment is for each investment that you’re making for your systems of time, money, bandwidth, and other resources and think through whatever things would we like to try. After you do that analysis, tweak your current strategies to develop a new fundraising system that lays out the specific goals, timelines, responsibilities, and segments we talked about today.

Now, before we get the questions and as you develop your fundraising systems for your nonprofit, I wanted you to keep a couple of key thoughts in mind for creating really, really smart fundraising systems. The first is don’t focus on everything at once. Give yourself a break. Most nonprofits should choose between two to four tactics for each strategy. So, when I say donor stewardship or since we’ve talked so much about donor stewardship, let’s talk about something else—prospecting, they will come up with a dozen or two dozen ways to find new prospects they’ve been thinking about whether they’ve tried. That’s probably too many for most nonprofits.

For most nonprofits, what you want to do is pick out the two to four ways that you’re going to really, really focus on getting right in terms of finding prospects. What are the two to four ways you’re going to find prospects? What are the two to four ways you’re going to cultivate your prospects? What are the two to four ways you’re going to ask your prospects for money this year? What are the two to four ways you’re going to steward your donors? Don’t focus on everything at once.

Next thing to think about is to test new things and always be testing. Drop what doesn’t work. Let your organization drop the things that aren’t working and focus more time and money and resources on the things that are. Another key principle for smart fundraising systems—spend 5% of your time planning. Always plan everything out, but most of your time should be doing.

A lot of times, we get committees together to do planning, talk to everybody, get everyone’s input, rewrite the plans over and over again and it’s eight months before we’re ready to implement. Most good fundraising systems can be built in a couple of weeks. If you’re trying to systemize a couple of things a year, that’s a couple of weeks, a couple of times a year that you’re building systems.

Don’t spend all of your time planning. Five percent of your time planning is my suggestion, 95% of your time doing. We already said to focus on the 20% of your work that gives 80% of your results, that’s important. Kind of the final thing is to think big. Remember, donors don’t fund small visions, whether it’s your programs, thinking big about your programs or your fundraising, thinking big about your fundraising, I want to encourage you, cast a really big vision.

Sometimes it’s hard when you’re in the trenches and you’ve been doing the work for a long time to think fresh and to think new and think bigger about what’s going on at your nonprofit but always remember your nonprofit does really, really good work. It’s making a difference and there are lots of donors out there who want to invest in your work. So, think big about how to reach them and how to get them to invest more in your nonprofit than perhaps ever before.

Remember, you can do this. It may seem overwhelming but it’s not. You’re going to want to start with one system. Again, my suggestion is stewardship and start building out donor systems of your nonprofits. Every organization, no matter how small or large can and should be building out sustainable fundraising systems for their nonprofit. Fundraising systems like the ones we talked about today can transform your nonprofit and can allow you to raise dramatically more money for your organization with far less stress and hassle.

All right. Before we move on to questions, I do want to let you know one thing. To thank you for being on today’s webinar, I do want to give you a copy of our newest free eBook. It’s short and very actionable on how to find new donors for your organization, “Ten Ideas for Finding New Donor Prospects for Your Nonprofit.” To get a copy of that after the webinar is over, you can head over to garecht.com/bloomerang and pick up your copy of that eBook, “Ten Great Ways to Find New Donors for Your Nonprofit.”

With that, I hope you enjoyed today’s webinar. I hope it’s given you lots of ideas for building systems for your nonprofit. I’m going to toss it back over to Steven, who helpfully put that link the chat box for you. He’s going to handle some questions. Please go ahead and enter those questions in the chat box.

Steven: Yeah. Thanks, Joe. That was awesome. Thanks for the free eBook too. I am looking at it right now. That link really does work, you guys. You should go to it and download it. It’s got some cool stuff in here. It’s got affinity groups and public relation outreach, really good stuff in here. Get that eBook. It really is free. All I had to do was put in my email address. I’m looking at it right now.

So, thanks, Joe. That was awesome. Lots of really good ideas. I was even writing a few down myself that I haven’t thought of. Thanks for doing this. We’ve got a lot of questions in here. We’ll try to get to as many as we can. If you haven’t sent in a question, please do it now. Obviously, we’ve got a wealth of information here.

Here’s one from Anne. Anne is with a three-person nonprofit. They cover two states. She’s the ED and she’s got a development coordinator, one of the other three people. She’s wondering should they set up a fund system for one event and then go for more events. So, maybe try it for one of the events and release it to the other ones. Is that a good way of going about trying a new system, Joe? Or maybe [inaudible 00:51:39]? What do you think?

Joe: Yeah. What you’ll find for things like individual tactics, as opposed to like prospecting and stewardship and communications, but for individual tactics like events, what you’ll find is that your basic system will usually work for multiple events, even if they’re different kind of events. Obviously, the way your donor universe or the actual event itself for a golf tournament is going to be way different than a gala dinner.

But the way you put together a committee to help with getting people to that event, the way you solicit sponsorships, the step-by-step process you take for asking major sponsors to renew each year, upgrade each year, those are the types of things that when you pilot them for a particular event, you’re going to be able to move those from event to event with minor tweaks and be able to implement them over and over again.

Definitely a great way to do it, but if you’re having trouble thinking, “We do a ton of events or a ton of mailings, I don’t know that we can develop a system that works for all of them,” I say give yourself a break. Take one event or one mailing or whatever it is, write down your processes around it, write down what you want to happen around that event, develop a system for that event and when you get to your next event, you’ll see that probably 80% of it applies, then you’ll be off to the races with your event strategy.

Steven: Cool. Love it. Here is one from Christiana. I hope I’m pronouncing that correct, Christiana. Please forgive me if not. She’s got an organization that has no donors other than the founder and that founder basically funds everything they do now, but of course they want to grow or I assume they want to grow. Other than downloading that awesome eBook, Joe, what ideas do you have for her on getting some new donors when you’re starting completely from scratch? Anything you should do differently if you’re starting totally from scratch?

Joe: Yeah. We can do multiple webinars just on that topic.

Steven: Right.

Joe: You want to build a prospecting system. There are lots of different ways to go about it. Obviously, the primary way most nonprofits would launch a prospecting system based on the kind of case here is they would sit down with that founder and start trying to build out a aboard that includes people that are not only potential donors, but people who have networks. Ideally, your founder has a network and ideally depending on the specifics around your organization, you’ve now been in business for a year, two years, three years, however long and so you had interactions with other people, either in your community or in your mission field.

So, you want to start putting together a board and that could be the board of directors or if there’s a problem with that based on the founding issue, it could be an advisory board of people who are connected with the founder or connected with the people you’re working with as an ongoing organization.

Really, that process of prospecting that way, I’d liken it to a series of concentric circles. In the middle is the staff and the founder and now we need to get one step out and that first step out are the people who know the staff and founder because they’ve worked with the organization and bring them in and then we want to go one additional step out, expanding into those peoples’ networks. You keep building out that way. There’s lots of other little tips and tricks for reaching out to prospects who aren’t maybe perhaps as warm as that.

For instance, depending on your mission field, you may hold an event or a roundtable or a conference to bring people in and that sounds grandiose. It could be simple. It could be 20 people at your office who care about that mission but maybe haven’t been involved in your organization as a first step for getting them to know your organization.

So, it takes a lot of shoe leather when you’re starting off with very few donors, but you want to make sure you’re building into donors the right way. The way to start is probably not direct mail prospecting because what you need now, you need a base level of deep donor relationships. Those take time, but it ends up with very, very loyal donors who hopefully will be with your organization for a long time.

Steven: Very cool. Love it. We’ve probably got time for one or two other questions. Before I get to them, Joe, are you willing to answer questions by Twitter or email or offline? Are you willing to do that?

Joe: Sure. Absolutely. You can reach me by email. It’s joe@garecht.com or go to that website, garecht.com and pop it in there or send me a question by Twitter @JoeGarecht.

Steven: Very cool. Here’s one from Amy. Amy’s got a pretty significant segment of her donors that is not super tech savvy. They’re not online. They’re not using email a lot. Any advice on how to manage those people? I suppose direct mail and phone calls are good, but what would you do for those non-technical people?

Joe: Well, it’s hard to remind ourselves, but 30 years ago, every nonprofit on earth was in that boat, right?

Steven: Right.

Joe: There was no email. We had to do it all the hard way or the old-fashioned way. There’s a couple different options. One, I would double-check—I don’t want to suggest that you’re wrong—but I would double-check the belief at the nonprofit that your donors are not really on email or don’t use email. I found that the vast majority of even older donors are on email at least a couple times a week.

That’s one thing I would do. I would say not to challenge the assumption—maybe it’s not an assumption—but I would say double-check that email—I agree with you if it’s an older donor population, you’re probably not going to be on Snapchat with them, that kind of thing, but double-check that they’re not receiving email newsletters because that can be a way—maybe that’s not their favorite way to get things and that’s another issue and we can talk about that. Double-check about the email.

There’s not a magic bullet, unfortunately. If your donors really don’t want to get emails from you, then the only other real options are, Steven as you said, direct mail, things like newsletters that are actually mailed and perhaps you can make it cheaper by using volunteers to stuff and doing all that stuff and things like events.

Certainly, you can pick up the phone and call them, but if you’re looking for a mass cultivation strategy, you’re probably looking at snail mail newsletters. The key there is if you’re relying on snail mail newsletters, be careful about who you’re sending them to, meaning now in the era of the email newsletter for nonprofits, we never take people off email lists, right?

Steven: Right.

Joe: Very rarely does a nonprofit go through and cull its email list because what does it cost to send out an email newsletter? It’s very, very negligible, each additional person. But with snail mail newsletters, that’s not the case. You want to be careful. You don’t want to be saying about snail mail newsletters what so many nonprofits say to me about email newsletters, which is we’ve got 20,000 people on there. A lot of them haven’t given in the past 10 or 15 years, but we still have them on there. You won’t want to be sending out snail mail newsletters like that.

That’s really the options that are available to you and direct mail still works. Obviously, there’s debate all the time about whether it does, whether it doesn’t, but it does and particularly for older donors, it works in many cases if it’s written right, if it’s done well, it can work very well with the house file.

Steven: Absolutely. I love it. Direct mail is great. Even coming from me, a millennial, I still like direct mail. It’s true. It’s not dead. Well, Joe, this was awesome. We’re about out of time. I want to be respectful of everyone’s afternoon. Great stuff. No surprise for me. Hopefully everyone else enjoyed it. Looks like they did based on some of the comments. So, thanks for being here, Joe. This was awesome.

Joe: Absolutely. Thanks, everybody for joining me today.

Steven: We will get you the recording, the slides, just give me about an hour or so to craft that email and get that going to you. Just be on the lookout. I’ll get it in your hands. We’ve got lots of great resources on our website. You can check those out while you wait if you want, but they’ll be there even later on.

We’ve got some great webinars coming up. Next week, a week from today, my buddy, Claire Axelrad, is coming back to talk about silent auction items. It’s going to be event season before you know it. Maybe you’ve got a spring event coming up. If you’ve got a silent auction and you’re looking at what items to put on those tables and how to put them on the tables, check out this webinar. It’s going to be really cool, going to drill right down into that very specific topic. So, check it out if you do events or if you want to do events, it will still be good for you, you’re going to pick some good tidbits away from Claire, just like you did from Joe.

This was great. Thank you all for taking an hour out of your day to join us. Just look for an email from me with all the follow-up info and hopefully we will see you again next week. So, have a good rest of your Thursday, have a safe weekend, and we’ll talk to you again soon.

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Kristen Hay

Kristen Hay

Kristen Hay is the Marketing Coordinator at Bloomerang. She serves as Chairperson on the Blog & Social Media Committee for PRSA’s Hoosier chapter.

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