Nonprofit Donor Management | Tips & Best Practices

Donor management is much more than just collecting your donor and donation data in one place. It includes everything that will help establish a relationship between you and your donors, segment your audience for targeted communications, and retain them for a long time. Learn the benefits of donor management and get tips on how to effectively manage your donor relationships in this guide!

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Nonprofit Donor Management | Tips & Best Practices

When you hear of donor management, you probably think of donor databases, thank-you notes, and busy work. Or you might think about relationships, partnerships, and growth. Either way, you have some pieces of the puzzle. 

Donor management and donor tracking can be complicated, much like any other aspect of nonprofit management.

However, when done right, it can take your nonprofit to the next level. In this article, we’ll share key insights on how your organization can leverage the important practice of donor management to boost donations and grow your organization – so you can do more good.  

What is Donor Management?

Donor management is an essential aspect of nonprofit management that involves building and maintaining relationships with all your donors and tracking various donor details and interactions.

Although it sounds simple, donor management requires paying close attention to your donors’ activity, habits, and experiences. As a nonprofit, you must be prepared to manage a large donor base that consists of all types of donors — recurring donors, one-time donors, major donors,  in-kind donors, and more.

Donorbox’s donor management feature offers you a ton of powerful tools to master the art of connecting with your donors, building lasting relationships, and reaching out at just the right time to secure another donation. 

Learn more about donor management and how Donorbox’s tools work in this in-depth webinar – 

Get Started With Donorbox

Why Donor Management is Important for Nonprofits

Your donors are giving a part of their hard-earned income to your nonprofit. They are investing in your mission and the meaningful work of your nonprofit. As a nonprofit fundraiser, the responsibility of directing these funds to deliver impact lies on you. It is also your responsibility to keep your donors informed about your activities if you are to build trust and lasting relationships with them.

Many donors, if not all, like to be involved with the work of your nonprofit. After all, your mission is the driving force behind their association with your nonprofit, which in turn fuels your organization’s survival.

This is where donor management comes into play. When you manage your donors, you get to track all donor data, find out important milestones in their giving journey, and maintain lasting relationships. The donors who have been your biggest supporters can also be asked to become advocates for your cause. They can help you acquire new donors and raise more funds from their personal networks through peer-to-peer fundraising.

What is Good Donor Management?

Two women discussing donor management.

Like any good relationship management, good donor management involves great communication. For example, thanking and acknowledging your donors and remembering important moments of your donors, such as donation anniversaries or changes in recurring plans, lets them know how much you appreciate them. 

Good donor management looks like many different activities, all to steward your existing relationships and cultivate new donors. 

However, good donor management can take up a lot of time and effort. That’s why a functional donor management software solution should top your list of priorities — one that comes with all the features necessary to help you analyze your donor base. 

Powerful donor management software helps you maintain strong relationships and ensure that you turn those relationships into more giving. 

4 Benefits of Effective Donor Management

Imagine you are at a fundraising event. There are dozens of people in attendance, and you are trying to speak to as many of them as possible. Of course, you can’t speak to everyone, but you will engage with those who might give (if they are not donors already).

So, you find those who, according to you, are likely to donate to your nonprofit. Perhaps it’s someone older, retired, who lives within a few miles of your nonprofit. But what if you had access to information that suggests that your largest group of donors are millennials located in a different state entirely?

Now, this is not the scenario for everyone. However, one of the benefits of nonprofit donor management software is that it lets you easily access your donor database and pull out relevant donor insights. 

Besides helping you target potential donors better, here are some more benefits of good donor management.

1. Understand your donors better

In order to understand your donors, you need donor segmentation — essentially categorizing your donors based on their location, giving frequency, donation amounts, campaign preferences, and more. 

When developing donor profiles, ask yourself some basic questions. How old are your donors? Where do they live? How long have they been giving? How frequently do they donate? Do they have a partner that is also involved in the organization? Did they buy tickets to your fundraising event last year?

This process may not sound important. But these are some necessary steps that will help you understand your donors and ultimately, manage them well.

Pro tip: Before selecting your donor management software, evaluate the filters you need. Although some software might provide a number of filters, they might not be useful for you. As a nonprofit, you need to be able to sort your donors based on their donation frequency, number of donations, donation amounts, location, and donation time frame.

Here’s an example from Donorbox’s donor filters that allow you to sort donors on various criteria.

Nonprofit Donor Management filters and criteria

2. Improve donor engagement

Donor engagement is a key part of donor management.

If you have had donors that have been giving for a long time, but suddenly stop donating or reduce their donation amounts — there is a problem. It’s a sign that you need to engage more with the lapsed donors to ensure they keep engaging with you. 

To find your most valuable donors, you need a detailed look at your donor history. With the easily accessible information that is provided to you at the click of a button through a donor management database, you can get reminders about important giving milestones, when a recurring plan is canceled or updated, when there is a giving anniversary, and when someone gives for the first time.

Also, a good nonprofit donor management database will help you measure how engaged a donor is by immediately pulling data into their donor profile. It will show a timeline of how long they have given, information about events they attend, and more.

Save donor communications and add specific notes to your donor profiles. With focused attention on your special donors, you can engage with them better, and easily provide context to your team — as you are recording all information within donor profiles.

Here’s an example of how Donorbox allows you to save your interactions with donors within donor profiles, as well as mark the interaction channel and whether the communication was inbound or outbound. 

Screenshot showing the communication records for a supporter on Donorbox.

3. Improve donor retention

If there is a trickle of donors that stop giving, perhaps it is time to consider what is missing in your ability to retain donors

Do you know your current donor retention rate? Use our donor retention calculator to easily find the percentage of donors you’ve maintained from year to year. For example, if you had 550 donors last year and only 475 gave again, your donor retention rate is 86%. Your donor management system should give you reporting templates that help you pull data this data to compare each year. 

You might see a low retention rate due to a variety of factors. Maybe you ran a campaign last year that was more compelling to more or your donors. Or perhaps you haven’t done some key donor outreach activities, like sending out an annual report. There can be external factors, too, like a dip in the economy or other financial obligations. 

Whatever the reason your donors are no longer giving to you, donor management databases can help you increase your donor retention rates and create better donor tracking. 

Donorbox’s Moments feature sends you reminders for important events in your donor lifecycle, like the anniversary of their first gift, a canceled recurring donation, an increased donation amount, and more. 

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4. Save time and improve your efficiency

Streamlining your nonprofit’s processes in donor management is going to free up a lot of your time. Ask yourself how much time you are spending right now keeping track of donor data through spreadsheets, file cabinets, and the memory of your fundraisers. 

A donor management system streamlines that process for you! With Donorbox, as soon as someone gives using your online donation form or page, their information is logged into your Donorbox account. You can also easily add offline donors so all your data lives in one easy-to-access place. 


What to Look For in Donor Management Software

donor management

1. Ability to create custom donor profiles 

Custom donor profiles are essentially pages for each of your donors or volunteers with their giving history, communication history, volunteering history, event attendance history, and more.

Donor profiles are important because they help you engage with your donors on a deeper level, understand exactly HOW donors like to give, and gain other valuable information about their donor potential. These profiles will be handy when you need to segment your donors and want to run reports on a specific set of data. 

2. Donor segmentation

Donor segmentation is important because it –

  1. Helps you communicate with donors more effectively by avoiding generic messaging that is not targeted to them. 
  2. Saves time and energy through easily accessing information about donors’ financial resources, helps you determine where certain donors like being reached, and helps your nonprofit organization address those who are more directly involved in the work you do, improving those interactions. 

Good nonprofit donor management software will have opportunities for you to pull reports if you are looking for specific donors. For example, you may want to see how many donors showed interest in your last fundraising campaign online, your donor management system should have a filter for that. It should take you only a few moments to get a list of donors who gave to the campaign. With this data, you can reach out to them to thank them over the phone or find the ones with the highest donation amounts to make a more personalized appeal for an upcoming event

3. Task management and reminders

Everyone needs help remembering tasks from time to time, especially those juggling the responsibility of nonprofit management. When considering nonprofit donor management software, it is important for your team to easily assign tasks, set reminders for tasks, and check off completed tasks so you are all on the same page. 

Tools like Trello and Asana offer great task management resources, with free plans for your team! 

4. Email campaign management

Email marketing can help grow your nonprofit and tell compelling stories, keeping your donors engaged, both of which are incredibly important for nonprofits.

We talked about the importance of segmenting your donors above. You need to look for email campaign management that allows you to customize your message as much as possible to take advantage of that segmentation! 

Donorbox integrates with MailChimp and ActiveCampaign, two powerful email marketing platforms to make your outreach seamless. 

5. Powerful fundraising features 

You are aiming to make life simpler, obviously, and if you are finding separate donor management software and options to help streamline each tool, that is not helpful! Instead, find a “one-stop-shop” so to speak–a donor management software that also doubles as an online fundraising solution. It should let you easily embed donation forms on your website and as donors make donations, the donor information should automatically get stored in the donor management database. 

Donorbox has you covered with state-of-the-art tools to help organizations of all sizes scale their fundraising. With crowdfunding and peer-to-peer functionality, text-to-give, the Donorbox Live™ Kiosk app, event ticketing built for nonprofits, and more, Donorbox has helped over 80,000 organizations raise over $2 billion – and counting! 

Donor Management Best Practices

Now that you know what tools to look for in donor tracking and to help cultivate donor relationship management, let’s dive into some of the best practices for using the tools provided by donor management software to engage with donors.

1. Personalize donor communication

Use the tools provided by nonprofit donor management software to engage with the donors regarding their interests. 

If they have expressed interest in events, put them on your email marketing list for events. 

If they have expressed interest in volunteering with a specific program your nonprofit offers to the community, send updates about the particular program. Keep good notes about your donors and communicate accordingly.

Personalize every communication piece you send to or use with your donors, including fundraising scripts, appeal letters or emails, thank-you letters, and more. Train your volunteers and staff to know how to deal with specific groups of donors and the ways to inspire them to give.

2. Thank donors

No one likes their work or contributions to go unnoticed. Create a plan for your team when thanking donors. 

Assign one person in the organization the task of thanking anyone who gives in-kind gifts. 

Assign another individual the task of thanking those who give $50 or less through thank-you notes or other methods. And so forth. 

For the donors that give more, provide special benefits when it comes to your fundraising events. Do they get into the event early? Do they get a special swag bag with marketing materials from your nonprofit? Have your board members make a call to personally thank them. Get creative and have a plan. Check out these 10 ways to thank your donors for inspiration! 

Remember your approach should be targeted and personalized to all your donors, irrespective of the donation amount.

3. Keep donors updated

If you are not keeping your donors updated on your programs, impact, success stories, community engagement, and annual reports, they will leave. Send them updates from online campaigns they’ve donated to. Make the updates regular. 

Donorbox makes it easy to provide updates on your crowdfunding page, the way this organization did. This helps build your fundraising momentum while keeping those who have already donated up to date on your campaign’s success! 

We love how this organization used its Donorbox Crowdfunding page to provide an important update about their activities. 

Screenshot of an organization providing updates on their Donorbox Crowdfunding page.

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Encourage them to sign up for newsletters. If your donors prefer contact through mail, send out physical quarterly reports. For bigger donors, email and mail annual reports with fiscal information easily accessible. 

The more updated and engaged they are, the more they will continue to contribute.

4. Keep asking for donations

No one can read minds, not even faithful donors.  If you don’t ask for what you need, how are people supposed to know you need it? 

Keep a running list of needs for your organization and update donors frequently. Even if it is something small like hand soap or coffee for the breakroom, ask. 

Are you at the year’s end and in need of $10,000 to meet your annual budget? Reach out to your biggest donors via email, phone, letter, or another method and ask. 

Pro tip: While asking for donations, especially a significant amount, keep your case statement handy. It helps your donors get a level of transparency and you explain your nonprofit’s cause, vision, impact, and immediate goals.

5. Feature donors

Who does not like for others to know about the good work they are doing? Unless your donors have specifically asked to remain anonymous, they would likely appreciate public thanks. 

Consider including a donor spotlight in your monthly newsletter. Include information about why the donor got involved, how long they have worked with you, and what keeps them coming back. 

Pro tip: Add a donor wall to your website or fundraising page. A donor wall, essentially, recognizes each donor publicly, giving you the opportunity to instantly acknowledge their contribution and their participation in your work. 

This organization set up a donor wall so donors who opt-in can get automatically recognized. 

Screenshot of an organization using a donor wall on its Donorbox Crowdfunding page to recognize donors.

6. Involve donors in the fundraising

Your top donors are on your team. They support your organization – and they want you to succeed. Why not ask them to pitch in and fundraise on your behalf? 

Peer-to-peer fundraising can help you boost donations and multiply the impact of your campaigns.

With Donorbox Peer-to-Peer, you can invite your top supporters to fundraise on your behalf or let anyone sign up right from your campaign page. They’ll then receive an email with instructions to create and customize their own fundraising pages. From there, they can share their pages with their friends, families, and coworkers. 

Allowing your top supporters to take this next step helps strengthen your relationship with them. 

Check out how this organization garnered tons of support through its peer-to-peer fundraisers. 

Screenshot showing the peer fundraisers for a Donorbox Peer-to-Peer campaign.

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7. Spot opportunities in the data

Where did your donors receive inspiration to get involved with your work? Was it a personal experience? Or just an affinity for your work? 

Nonprofit donor management software can help you store this key information and determine how to better secure other donors. 

Not only can you spot information on donors, but you might also notice through data how you can provide more inclusive options for donors. 

Over to You 

Now that you know what to look for in donor management software, it’s time to search for one that works for you and your team.

With effective donor management, your nonprofit will survive, thrive, and achieve its goals.

This is essential for saving time, energy, and money. And, it can help you relate to donors better, increase donor retention, and help you develop closer, more meaningful relationships with donors. We hope these donor management tips help you create a better strategy to maintain your donors. 

Donorbox helps nonprofits of all types with a simple and effective donor management system. But that is not all. It’s an all-in-one, simple-to-use online fundraising platform that includes features like crowdfunding, peer-to-peer fundraising, text-to-give, recurring donation forms, customizable donation pages, memberships, Events, and more. Learn more here.

If your nonprofit is looking for ways to scale its fundraising potential, Donorbox Premium is here with expert fundraising coaching, high-performance tools, and priority support.

Get tips and resources on managing your donors better and running your nonprofit more effectively on our Nonprofit Blog. Subscribe to our newsletter for a monthly dose of blog content delivered right to your inbox. 

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Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.

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