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Stewardship: A Plan for Investor Growth

Thank you sign with girl 012814

By Lyn Watner, President, LMW NonProfit Associates

Here is a question for the New Year – Which is more important, building your prospect base or practicing good stewardship? Of course, both are important, but many organizations could do a better job of retaining their current donors.

Our best contributors are actually long-term investors to your organization and its mission and you should be strategizing how to upgrade all your prospects and new givers into investors.

Retention has to be a priority because once you begin to lose more investors than the number of new prospects you engage, then your organization’s credibility becomes questionable. Your current investors may then rethink their commitment to your organization.

While growing your prospect pool is absolutely necessary, a solid donor/investor retention strategy will not only help to retain your current investors, it could enhance overall giving for the fiscal year by 10%. This finding was reported by a recent survey conducted by AFP and was published in the Urban Institute’s 2012 Fundraising Effectiveness Survey Report. Additional studies have indicated that in various situations many current investors are more likely to give five times more than a new one.


Put simply, it costs less to keep existing investors than to acquire new ones. The acquisition cost for time and the resources attached to cultivating prospects into investors is considerably higher than the costs associated with retention. A greater frequency of meetings, constant flow of new materials and simply learning how best to service a potential new investor, is a much more expensive undertaking.

Unfortunately, for too many organizations, stewardship is an afterthought. Many fail to appreciate the importance of valuing the investors they already have. When they do, it is often too late or the yield is substantially less than it would have been had the organization acted in an appropriate and timely manner.

Like any good relationship, stewardship is about communicating, building trust and respect. It’s about your awareness of each investor’s needs and tendencies and making him or her feel appreciated and singularly special. Your current investors are your “low hanging fruit” who most likely will increase their gift every year if there is an effective stewardship plan in place. They initially give because they believe in your mission and vision and that your organization is making a difference. They upgrade their giving because they see that you are directing their support to the project that they designated (that is most important to them) and they conclude that you are using their money wisely.

Donors and Investors Trust People

Investors give to people. They give to people with whom they have a relationship that has been built on trust. If your major gift staff has cultivated a prospect and has continued to build a strong relationship, that personal connection will help to determine their next level of giving and its consistency. Ultimately, that staff member is in a much better position to cultivate the investor to higher levels, because investors upgrade because they are asked to.

The Components of Stewardship

What are the components of the stewardship plan that have proven to be most effective? First off, it is most likely your organization has giving levels already in place. This will provide you the opportunity to fine-tune and add the necessary “touches” to your stewardship plan.

The Art of Thank You is the first opportunity to engage your new investor. Most thank-you letters should be sent out in the first 48 or 72 hours. Every investor receives this letter, but the investor who grants a major gift and self-identifies must be thanked immediately, meaning within the first 24 hours.

If you forget to send a thank-you letter, a new investor will certainly feel unrecognized and unengaged. The letter should be very specific, personal and clearly state the exact purpose for which the contribution has been designated. Keep a spread sheet that will give the “perks” applied to each giving level and be sure to include the perks for the stewardship plan.

Communication is all about building a deeper and more meaningful relationship with the investor. Responding to his or her calls, emails and requests to the organization should be your top priority. You should respond with a phone call as this gives you the opportunity to cultivate a more personal relationship.

Take your investor to lunch, visit their home, send them invitations, even if you know they will be out of town or ask them for their input on a certain matter or topic which will make them feel important and involved in your organization.

Transparency is essential because their giving is often predicated by emotions and a relationship of trust. The clarity of your mission,  vision and the impact your organization exudes, will project trust and honesty. The investor wants to know where his money is going, how it is being used and whether or not it is making a difference.

Your annual report may be a year-end wrap of the programs that have been successful during the fiscal year, but it is just as important to give your top investors critical data during the fiscal year. For example, let them know that $1,000 will educate 10 more students in a school in South Africa or a woman in India needs $500 to start her own micro-financing business to sell baskets. Remember the more transparent you are about your efficient and efficacious operation – and your achievements, the more the investor will believe in your mission and more than likely increase his gift.

Engagement of your best investors can develop lay leadership and cultivate ambassadors for your organization. Get them involved in committees, as volunteers, invite their peers to learn more about the organization and encourage them to write letters “to the editor.” Keep them involved and this will likely encourage them to make a larger gift every year. (Remember however that there are some investors who don’t want to be engaged and only want to write a check.)

Recognition is a crucial component of your stewardship strategy. There are a multitude of reasons investors want to be recognized, and it is important that you learn why each one chooses to have his or her name recognized within the community.

There are also a variety of opportunities to create donor recognition for major gift investors: a wall of names, naming opportunities during a campaign and special events in which investors may visit the constituency their gifts have aided (which can also inspire future and increased giving).

For investors giving under the major gift level, there are simple things to do to make this group feel important. For example sending a personalized book marker, lapel pins, or an invitation to a special event where they meet board members and senior staff of your organization. Giving circles for like-minded donors have also proven effective.

The Process should be fun, exciting and creative. Doing the same things over and over again can get boring very fast and may even cause your major gift investors to look elsewhere.

Vary your program offerings: one special event may introduce a captivating speaker (and expert) on a “hot” topic with immediate relevance. You can also coordinate a weekend of program directors, senior staff and board members to give your investors access to round-table discussions with different topics for each group. You can then follow this by sending out a photo album of the event, which serves to recognize individual investors and also build your unique culture and connectedness.

If you are in a university setting, think about doing a scavenger hunt, especially if the campus is in the process of creating some new buildings. It can create camaraderie among the participants.

Solicit, not too often but often enough. Let’s say the investor makes the initial gift and receives an immediate thank-you letter. This is not an opportunity to ask for another contribution. It is in extremely poor taste for you to send a thank-you letter and make “an ask” in the same letter (which can also potentially be irritating). Either thank the investor or ask  for a gift. Don’t blur the objective. Be sure that your next solicitation note or letter appeals to his or her key area of interest. If you are starting a capital campaign, you should first send an introductory letter and materials about the purpose and scale of the project. Your next note or letter might be an invitation to see the plans in more detail which could then lead to “an ask” for the project.

In Conclusion

Investing in a stewardship plan is not a new fundraising concept but it is essential for maintaining your database with accurate records of giving history, personal information (names of children, birthdays, and anniversaries), membership in clubs or other volunteer activities. Most of all it is important for building strong personal relationships.

Story telling has become the “new norm” for engaging new prospects and current investors. It can be about saving children or making a difference in a community where they need a school. You should use the story to demonstrate how a gift or program has markedly enriched a person’s life.

Every time someone donates to a good cause, they are “buying a story” that’s worth more than they donate. Because they have become engaged and enthralled with your organization, right now is the time for your stewardship strategy to kick in!


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  1. Donor retention is THE thing

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