Donor confidence is often the golden ticket when it comes to building lasting relationships and attracting meaningful gifts. You might be able to grab someone’s attention for an initial gift if they’re interested in your mission, but ongoing support and “investment”-level giving (including planned and endowed gifts) depend on a high level of donor confidence, in both the organization and its stewardship of the donor’s legacy.
It’s not always easy to build this confidence, however. Maybe your organization doesn’t have quite enough resources to devote to branding and publicity? Or maybe yours is a new organization that hasn’t yet achieved widespread name-brand recognition?
Either way, there are some simple things every non-profit can do to encourage confidence on the part of their donors. Here are five confidence-building steps to help smooth the path toward more giving:
Invest for the Long-Term
Showcase the financial strength and permanence of your organization by establishing and building a reserve fund or board-designated fund. If able, set aside a small amount of your annual unrestricted revenue and put it into a long-term investment account. These long-term assets can provide ongoing income via a spending rule and eventually, donors can be asked to contribute.
Use Formal Policies
Formal policies provide consistency, accountability, and continuity – all important factors in building donor confidence. Many donors will ask to review your policies before a major gift. Although most should be fairly timeless, it’s best practice to regularly review policies and make any needed updates. Examples of important policies include: gift acceptance, endowment, investment spending and management, privacy, compensation, and conflict of interest.
Polish Your Website
Let’s face it, image matters. Your website is probably the first place a new donor will go to learn more about your organization, and out-of-date or missing information can be a red flag. At the least, an effective website should be attractive, easy to read, and include information on your mission and history, board members and senior staff, financials (such as your 990 tax form or audited financial statements), and how to give.
Understand Third Party Ratings
There are several third-party non-profit rating services, and they all consider slightly different inputs in their rating process. Examples include Charity Navigator, GuideStar, and the Better Business Bureau. Savvy donors will do their research. It may not be necessary or possible to optimize every rating, but it is helpful to know how these services generally compile their scores. Common metrics include: board size and composition, financial efficiency, liabilities, compensation levels, effectiveness toward mission, level of transparency, and public complaints.
Reassure Donors Their Gift Will be Used as Intended
Honoring donor intent is both a best practice and the law in most states. Explain to new donors your procedures for accepting restricted gifts. Educate them on what would be useful to your organization, but also listen carefully about their goals and ideas. Then, draft a formal gift agreement to document their intentions and your commitments. Some organizations will provide regular reporting to donors and their family on the status of their gift and the impact it is having toward its intended purpose, especially if it is an endowed gift. Setting these expectations from the beginning shows a level of professionalism that donors value and helps you build confidence and trust.
Long-term donor partnerships are built on a high level of trust and confidence, which can be effectively developed through a thoughtful approach. Take these steps that we’ve outlined to help convert new and one-time donors into ongoing and valuable supporters of your organization.
The information in this paper is not intended as legal or tax advice. Consult with an attorney or a tax or financial advisor regarding your specific legal, tax, estate planning, or financial situation.
