Donor retention relies to a large degree on the effective recognition and gratitude that you show toward them for their gifts. Yet, with so many donors, and so many ways to partition your donor base, there’s no single solution for showing this gratitude that can apply to everyone.
So, how do you say thank you to donors? Figuring out the right approach involves understanding how to leverage each one effectively and why they’re so important in the first place.
The Importance of a Donation Thank You
In nonprofit work, as in day-to-day life, gratitude is one of the most significant qualities you can present. Thanking your board members, your volunteers, and the donors who form the foundation of the entire project should be a top priority for any organization.
A meaningful display of thanks serves many purposes. Wherever money is concerned, relationships run the risk of becoming transaction-based, and a genuine showing of gratitude helps to keep things personal, something which is so critical in donation-based organizations.
A simple donation thank you shows that the gesture isn’t taken for granted and that the donor is a valued partner in the future of the cause they’re contributing to. This is an act of engagement and, therefore, significantly increases the chances of repeated donations from the same giver.
But more than that, it’s about being gracious. While there are clear financial benefits to gratitude, they all stem from the human urge to reciprocate good faith, and that’s the key to working together, particularly where there are no contractual obligations to do so.
Too often, organizations take their supporters for granted, and this not only wastes an opportunity to present themselves in a positive light but it also sends their donors elsewhere. When first-time donors receive a thank you, even for very small contributions, they respond positively. A quick phone call from a representative can be a thrilling surprise for a small-time donor, and this is what makes it such a powerful act.
Gratitude leads to repeated and larger acts of kindness, and this translates to better donations down the line. A quick response with a meaningful message makes all the difference in that regard. It has been shown that well-timed responses to donations improve donor retention and increase the chances of a first-time donor making a second donation.
This is crucial in a working model that relies almost entirely on these donors. But how do you effectively show this gratitude to everyone? And should the most generous donors receive the same thanks as the far more common, smaller-gift donors?
A Thank You Letter for Donations and Other Ways to say Thank You to Donors
All donations should be acknowledged, no matter how small or how many times the donor has contributed. This is a simple fact of gratitude in nonprofits and shouldn’t be overlooked. However, there are so many options for showing this gratitude, and many are simply impractical over a large donor base.
If you have thousands of donors with contributions of less than a dollar, it might not be a good idea to spend $0.60 on an envelope for each of them to receive a thank you letter for donations they’ve made. However, if they’ve contributed thousands to your cause, a letter may be the least you can do to acknowledge it.
So, this brings into question the methods and the timing of your gratitude and how you split it between the upper and lower ends of the giving pyramid. There are multiple options when it comes to showing thanks, and it will be up to you to figure out which ones need to go where. Let’s take a look at some of the most common approaches.
The many ways to acknowledge donors
Tailoring your gratitude in the most effective way to both boost donor engagement and still have resources left over to make the donation worthwhile can be a tricky balance to navigate.
Common methods of saying thanks to donors include:
- Phone calls
- Invite them over
- Public acknowledgment on social media
- Birthday cards
- Text messages
- Short videos (either personalized or more general)
Obviously, these come with a range of time, and financial requirements that will vary depending on several contextual factors, such as whether donors are local, what their preferred method of contact is, how much they contributed, and so on, and understanding these factors and how to apply gratitude in relation to them is the key to understanding how to acknowledge your donors effectively.
To start with, let’s look at the majority of your donor base: the donors who contribute the smallest amounts.
How do you thank people for small donations?
The first thing that needs to happen is a rudimentary segmentation of your donor base. If your average donation is $150, you’re going to have a whole bunch of donations that are lower than that at the $25-$100 range and significantly fewer that are above it, all the way into the hundreds or possibly thousands. Find a bracket that represents your low-end donations, and design your approach accordingly.
Again, what you can afford will depend on how much each donor is contributing, and how quickly you can accomplish it will depend on how many people you’re trying to reach. Let’s say you have a hundred donors who gave $5 to $50. Of all the options listed in the previous section, emails and public acknowledgments seem to be the most cost-effective and rapid.
Adding each of their names to a list that you publish on your social media is going to cost you almost nothing, and it will get the job done effectively. Following up this post with a personalized email to thank them directly is a nice touch, too, and should be easy to automate.
Next, you’ve got the next bracket up, for example, the $50 to $150 range. This is still your low tier, but it gives you some wiggle room for two reasons. Firstly, the donations are bigger, meaning you can spend the same percentage of each donation on your gratitude and get more done. Secondly, there will be fewer donors in this bracket, which gives you more time to reach each of them.
For these donors, a personalized email should be the very least you can do. Phone calls would be even better, and this should be manageable on the amount they’ve sent you. Then, it’s just a matter of getting the calls completed at the appropriate time. The next 24-48 hours are ideal. Still, realistically, depending on your available resources, it might take a week to get to everyone, especially if you’re going to be calling donors from the higher tiers too.
Saying thank you to donors who offered the most generous support
At the other end of the spectrum, we have your legacy donors or donors who have been loyal to you for longer than average. You may have a particularly generous donor who contributes several times the amount of the next donor down, or you may have someone who’d been with your organization for so long that their medium-tier donations have accumulated into a particularly high donor lifetime value.
Either way, these are the people to whom you need to show the most gratitude. As you probably know, the majority of your funds will come from these small groups of donors, sometimes even from a single individual. As a result, they are the foundation of the entire fundraising success and should be reminded of this.
For your top donors, a custom email won’t cut it. A phone call is a good start, but don’t stop there. There are several options for showing gratitude to your most valuable supporters, and you can use any or all of them, depending on their preferences.
A handwritten letter (not a template) to each donor is a good place to start. Have it signed by your top staff, and consider getting the beneficiaries involved too. Adding photos of the people their donations helped goes a long way to boosting engagement and creating a sense that their donations really mattered.
If the beneficiaries are people, they can also contribute letters. If they’re animals, you can make a fun thank you letter for donations with paw prints from the animals as a signature. The aim is to create a direct link between the donor and the beneficiary, and this is the most personal way to thank your top-tier donors for their contributions.
Thanking First-Time Donors
So far, we’ve segmented donors by the amount they’ve contributed, but it’s also important to consider the impact of gratitude on first-time donors. These are people with no prior relationship to your organization and are the ones who need the highest levels of engagement as a result.
Remember, the nature of donor-based organizations is all about the relationships and partnerships between the donors, your organization, and its beneficiaries. As such, gratitude for first-time donors is critical to boosting their chances of repeating the donation.
First-time donors need to understand how special and important they are to your cause and to be reminded of why their choice to part with their money was a good idea. These are the people who can receive a little more attention than recurring donors as a way of cultivating their relationship with your organization.
Consider sending welcome packs to new donors to highlight the key facts about your project and what you do, and offer other ways to engage donors, such as volunteer opportunities or subscriptions to your newsletter. These can also offer a chance for your donors to provide you with feedback on what inspired them to donate in the first place. This useful information can help you with your donor funnel and marketing strategies.
Donation Thank You’s: Some Best Practices
So, you’ve got multiple options for saying thank you to donors, and it’s going to be up to you to identify which option is most effective in any given context. However, there are some general rules that cover a lot of bases in the world of gratitude, and these might help you navigate your specific situation more effectively.
Timing is everything
A quick reply is so important. Donors are at maximum engagement when they finally decide to contribute, and it’s your job to ride that momentum by responding to their generosity rapidly. Two days is a good target to have, but where it’s not possible, less than a week is still good, and less than two is the bare minimum.
A well-timed and personal text message with a video sharing an impact story is a perfect way to accomplish this and won’t cost a lot of time and money.
Regardless of the method of thanks, be sure it’s on time. If your gratitude practice is going to take a while, as in the case with gifts or hand-written letters, you can send an email immediately as a way of keeping the connection warm, showing that you’re grateful, and promising that there’s more to come. And a personalized text message can keep the connection even warmer.
If you have continuous streams of donations, send out your receipts regularly and often. Saving them up to send all at once will reduce engagement, and you’ll quickly see donor drop-out.
A mass email template is not a powerful sign of thanks and can come across as lazy. Your gratitude should be inspiring. Put the work in to really reach out in a personal and authentic way to the people you need the most.
Consider the donor perspective and their motivations for offering their support when designing your thank you letters. Show them why they mean so much to you, and personalize each one as much as is practically possible. The more in touch you can get with the individual, the better your relationship with them will become, and the higher your retention rates will be.
Segment in a useful manner
We’ve listed two ways to segment your donor group already: by gift amount and by new/recurring donations. However, there are many other useful ways to segment your audience, and this can help you when designing your gratitude.
This will also allow you to plan well ahead for how you will reach each segment. You should have an idea when designing a campaign who you’re going to be acknowledging at the end of it and how. Set your thresholds for each segment relating to whether or not they will qualify for the next level of gratitude.
Think outside the box
A thank you letter for donations is all well and good, but there are ways to improve upon the standard format. With a little forethought, you can customize your thanks in a way that resonates with your supporters and the image of your organization.
If you’re working with or for children, it might be possible to have them draw some pictures that you can add to your letters. If it’s animals, again, doing something quirky like stamping the letters with their paw prints or designing a video compilation featuring the most charismatic individuals can make your efforts stand out.
Make use of your creativity and try to make the gratitude part of your fundraising process as engaging and appealing as your promotional material needs to be.
Show them what they’re helping you to accomplish
One of the most important components of your gratitude material should be a demonstration of the impact of their donation. “So long, and thanks for all the cash” is really more of an acknowledgment that you’ve been paid and says nothing about what you plan to do with the money.
Instead, tell a story in your thank you media. Again, consider the donor perspective and use metrics that appeal to them. It’s no good simply mentioning how much you raised if you don’t tell them how their contribution changed something. Consider a before and after series of pictures of written stories, and emphasize how your donations really impacted the beneficiaries as they were intended to by the donors.
Should a Thank You Letter For Donations Include a Solicitation?
There is a debate as to whether asking for more money in a thank you letter is a good idea. It’s certainly not well received in the corporate world and has been shown to disengage customers, even to the point of inspiring punishment. However, while counter-productive in these settings, an ask in nonprofits is for a cause that the donor has engaged with and may be considered a means to promote further engagement.
Still, this is far from cut and dry, and there are split opinions in the nonprofit world as to whether a call to action (CTA) should be included in your gratitude. Some consider it a breach of trust and say that a solicitation should never be included in a thank you note.
Others encourage offering donors another opportunity to contribute, suggesting that this is something that actually benefits the donor emotionally. Ultimately this will come down to personal preference, your donor base, and consider that while up to 15% of donor income may be tracked to a request made while acknowledging a gift, this says nothing about the income lost as a result of that ask.
Regardless of where you land on this debate, you should seriously consider inviting the donor to take another step in their journey with you. From volunteering to sharing with friends and family, there are plenty of opportunities to turn a thank you into a gentle “your involvement really matters.” An example of this is Rally Corp’s Viral Loop.
Showing thanks for a gift is a common courtesy and should be a default response for anybody. However, there are strategic benefits to well-timed gratitude in nonprofits too. A genuine display of thanks can boost donor retention, improving the donor’s lifetime value and significantly increasing your future income.
There are so many ways and contexts to express these thanks, and the right approaches will depend on your specific situation. However, with a strong focus on first-time and legacy donors, you’ll have most bases covered. Then, by following these best practices, you’ll be well on your way to figuring out the rest.