By Jay Love, Co-Founder and Chief Relationship Officer at Bloomerang
Most nonprofits are focused on growing their organizations and impact. After all, if you’re working to make a positive difference in the community, why wouldn’t you do everything in your power to increase your capacity for impact as much as possible?
However, the roadmap for growth is often confusing and complex. You can’t earn more money to fund your programs by wishing your supporters would give more. It requires a strategic change on the part of your organization and team members to ensure organization health and make growth possible at your nonprofit.
In this guide, we’ll walk through some of the tips and strategies you can use to develop your own roadmap for nonprofit growth, including:
Set concrete goals and objectives.
Designate accountability check-ins.
Track your nonprofit’s donor retention rate.
Focus on mid-tier donors.
When you develop your growth strategy, don’t forget to consider how your tech stack will help bolster your strategy and how you can leverage your software for greater efficiency. Let’s get started with the first tip.
1. Set concrete goals and objectives.
When your organization’s goal is simply to “grow your nonprofit,” it’s impossible to measure when or whether you meet this goal. What constitutes growth? How much growth is considered substantial? That’s why the first essential step to developing growth processes is to clearly define your overarching goal.
Be sure whatever goal you choose is measurable and has a set timeline. It should be a concrete part of your nonprofit’s strategic plan. For instance, you might set the following goal:
Grow the organization’s total gross annual revenue by 10% within two years.
Once you’ve set your overarching goal for what growth looks like, you can set objectives that will lead to the accomplishment of the goal. While goals and objectives are often used interchangeably, they refer to two different concepts. Your goals should be your large-scale desired result, while objectives refer to the stepping stones that make your goal possible.
Therefore, the objectives that you might set to make the above goal a reality may include:
Increasing the organization’s donor retention rate by 5% over the next two years
Cultivating two new major donors to give gifts of more than $5,000
Hosting two new fundraising events each year
When you create objectives like these, your organization has a clear pathway to success and to achieve your goal. Ideally, if you achieve each objective, you should hit your overarching goal in the time period allotted.
Your nonprofit’s donor database should provide the reports and documentation that make it possible to track your progress toward both goals and objectives. For instance, you might set up your dashboard to track your working retention rate and your total money raised thus far, such as in the example below taken from Bloomerang’s donor database guide:
Be sure to also recognize that substantial goals sometimes require more intense processes. For example, if your goal is to start a new program, you might need to take actions to increase your annual fund amounts. That way, you can staff new employees to run the program and launch a large-scale fundraising campaign to fund the construction of a new space in which to run the program.
2. Designate accountability check-ins.
As you set your objectives, be sure to assign a specific person to be in charge of achieving that objective. This provides some accountability for each task that needs to be completed. It also allows you to check in on the progress with a single person to see how things are going and provides additional motivation to reach goals.
Of course, all projects require a team effort, but having a single person head the project allows you as the organization leader to check in with a single person on a regular basis to catch any roadblocks and help everything proceed smoothly.
For example, let’s say one of your objectives is to increase matching gift revenue by 15%. Therefore, you invest in a database that provides eligibility information to your supporters. Your matching gift coordinator heads up the project. You can check in with your matching gift coordinator to make sure things are going well.
We recommend checking in with your in-charge individuals on a regular basis. For instance, you might check in with them:
During a weekly team-wide meeting to show everyone how the progress is going
During one-on-one check-ins to see if there are any roadblocks that need to be solved
Quarterly as a large-scale review to make sure everything is on track to be completed on time
Let’s take the earlier example further. During weekly team-wide meetings, your matching gift coordinator might explain that matching gift revenue has increased by 2% and explain what changes they made to make that change happen. During a one-on-one meeting, they may mention that they’re having some trouble automating emails to be sent to eligible supporters. Finally, quarterly, they may explain that the revenue has increased by 5% and discuss future plans to continue improvement.
3. Track your nonprofit’s donor retention rate.
One of the fastest ways to grow your organization’s revenue is to retain more donors. Expanding your donor database is hard and some sources claim it’s actually around ten times more expensive to acquire new supporters than it is to retain your existing ones.
The first step to retaining more of your supporters is to start tracking retention in your donor database. At first, it can be challenging to know what is considered a good donor retention goal, but the important thing is to always be trying to improve your own rate. On average, the nonprofit donor retention rate is fairly low (around 45%). But, increasing it by just a few percentage points can result in a lot of money saved.
When you retain supporters for longer periods of time, you not only save money that would be spent acquiring new supporters, but the retained donors tend to also contribute more to your organization and have a higher lifetime value.
So how can you increase your retention rate? By focusing on relationships. Donors continue coming back to the same nonprofit because they build genuine connections with the staff members and feel like they’re making a difference. Here are a few strategies to build relationships with your supporters:
Show plentiful appreciation for supporters. Call your donors, send them letters and emails, and send branded merchandise to show your appreciation for their support. To make sure you get the most out of this process, you might consult templates like Qgiv’s thank you letter templates to be sure you don’t miss any important information in your communications.
Segment your supporters for personal interactions. Create donor segments in your database so that you can be sure to efficiently appeal to each supporter you reach out to. You might have one segment for your new donors, another for volunteers, one for recurring supporters, one for major donors, and more.
Share impact stories with supporters. Supporters want to know that they’ve made a difference. By sharing impact stories, you show them what their generosity has made possible. This gives people a warm and fuzzy feeling that they’ll want to repeat by contributing again.
Track your donor retention and other metrics that indicate growth closely. Hard, concrete numbers are the measurement of growth and how you can be sure you’re on the right track over time.
4. Focus on mid-tier donors.
Another way that you can grow donation revenue at your organization is by focusing on mid-tier donations. Many organizations tend to focus specifically on major donors or on donor acquisition. While these are both important elements of growth, it completely leaves out paying attention to your mid-tier supporters.
Mid-tier donors are important because they’re the ones who are most likely to become major donors in the future. Plus, their contributions have the potential to make up a large portion of your donation revenue.
Here are some strategies you can use to appeal to these important individuals:
Collect data from your nonprofit CRM. The first step to appeal to your mid-tier donors is to figure out who they are. The step below your major donors is considered mid-tier, so it differs for every organization. Once you define what “mid-tier” means to your nonprofit, dig through your donor database to determine who your current mid-tier supporters are.
Build a mid-tier donor segment. You may have a first-time donor segment and a major donor segment in your donor database, but be sure to also create a mid-tier donor segment to appeal to those supporters. Then, you can appeal to these supporters with opportunities most likely to interest them.
Cultivate a mid-tier donor roadmap. Just as you should build a roadmap about how to cultivate a second donation from your first-time donors, build out a strategy with next steps to engage and steward your mid-tier donors. Invite them to exclusive events, provide additional opportunities for involvement, and let them help with some decision-making for your organization.
Your mid-tier donors need some special attention, just like your other supporters. This means you’ll need an effective marketing and communications plan to make sure your mid-tier supporters receive individualized and personalized attention from your organization. Instead of letting them drop off, develop a stewardship plan that focuses on their retention and eventual cultivation to become a major supporter.
Nonprofit organizations everywhere are looking to make the greatest impact they can in the community and on the world. However, the path to growth is often confusing and complicated. The tips in this article will help you along the way to develop a strategic plan for your nonprofit’s increased development needs so that you can expand your mission even further.
Jay Love is Co-Founder and current Chief Relationship Officer at Bloomerang. Prior to Bloomerang, he was CEO and Co-Founder of eTapestry, a leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth. Over the years, he has given more than 2,500 speeches around the world for the charity sector and is often the voice of new technology for fundraisers.