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BizWorld Lesson #5: Manage Your Donors More Like Customers

Posted by Ian Lauth

BizWorld-ManageDonorsLikeCustomers-02This article is part of a series titled "Lessons from the Biz World" where we explore valuable aspects of the for-profit sector we can apply to nonprofit management and translate into a more efficient, stable and successful organization with a greater impact. 

There are many of parallels that can be drawn between a business's healthy customer portfolio and a thriving nonprofit donor base. In both cases, it is up to the organization to spur individual patrons to spend or contribute some of their hard-earned cash.

The for-profits and nonprofits who are best at this understand how to keep their target audience coming back and opening their wallets time and time again. 

Companies are typically far more effective than nonprofits when it comes to developing these relationships, in part because businesses can make "customer satisfaction" a main pillar of their mission statement. Nonprofits, on the other hand, are focused on fulfilling their charitable mission, so concepts like "donor satisfaction" may end up taking a back seat.

To counteract this, enterprising nonprofit executives can use business tactics to manage their donors more like customers, putting donors at the forefront of their fundraising strategy.

Contributors

Carlos Leija CDO

Carlos Leija
Chief Development Officer

Orangewood-Childrens-Foundation-Logo-sm
Melissa Beck CEO

Melissa Beck
Chief Executive Officer

Big-Brothers-Big-Sisters-OC-Logo-sm

Lessons from the Biz World

For-profit business practices offer many valuable lessons that can be applied to nonprofit management. In this series we look at how these can translate into a more efficient, stable and successful organization with a greater impact. 

Lesson 1: Manage capital wisely  

Lesson 2: Invest in good people 

Lesson 3: Track & measure EVERYTHING

Lesson 4: Utilize branding strategies 

Lesson 5: Manage your donor base like customers

Lesson 6: Overhead is not negative

Lesson 7: Embrace resistance

"I am incredibly conscious of my 'profitability' and ensure that I am financially sustainable just as I would with a business," explains Melissa Beck, Chief Executive Officer for Big Brothers Big Sisters of Orange County, "I am fully aware that I need to remain net revenue positive. Instead of transferring money to retained earnings at the end of the year, I get to make a larger impact by re-investing those funds into my operations and serving more children."

Make keeping in touch with key donors a priority so that those who play a pivotal role in the Nonprofit’s success feel appreciated and informed. This is a nice way to show that your nonprofit genuinely appreciates those who have made a difference, plus it can also inspire them to make additional donations.

“Longevity and accessibility are really key,” says Carlos Leija, Chief Development Officer for the Orangewood Children's Foundation, “Using your ears more than using your mouth. Understanding the motivation of your donors ‒ because ultimately that’s the only way you’re really going to get them invested in you for a long time.”

Remember to step back and look at your donor base through a strategic lens. Capture and use analytics to your advantage in order to multiply your audience and boost future donations. Like a for-profit sales team, develop upsell, cross-sell and retention strategies to grow your base and fuel the success of future fundraising initiatives.

  • Upselling strategies will effectively get donors to donate larger amounts.
  • Cross-selling means getting donors to donate more times throughout the year to multiple campaigns showcasing different causes within the Nonprofit.
  • Retention selling means keeping the charity top of mind for donors without being overwhelming; you don’t want them to lose interest and donate elsewhere!

Communication should always be at the heart of these initiatives. Develop meaningful communication that builds on existing relationships with additional goals focused on gaining new members. Just like any company selling a product or service, if you can discover how to create value for your target audience, they will continue to be active and donate more every year. They will also be more likely to spread your message and mission to friends, family and other contacts.

Whether your goal is impact or profit, or you're targeting donors or customers, the objective remains the same. Organizations must treat their most dedicated patrons in such a way that it will keep them coming back to open their wallets and help fund their mission time and time again. 

 

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Fundraising, Biz World Lessons
Ian Lauth
Ian Lauth
With an extensive background in marketing development and content design, Ian’s role at Winspire is to develop external communications, brand expansion and product delivery processes to help Nonprofits maximize their fundraising revenue. Ian serves as the Editor-in-Chief for Winspire News, creating and managing blog content, newsletters, eBooks and other resources for Nonprofit fundraising professionals.

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