Financial Management

Earning constituent trust through donor management software

Donor management software contributes to strong bonds between constituents and nonprofits. Fulfilling expectations on multiple levels earns donor trust and is crucial to the livelihood of an organization. In addition, charities should be going above and beyond to ensure transparency when it comes to financial and ethical motives.

Recent research conducted by BBB Wise Giving Alliance revealed that 46 percent of American donors put their trust in charitable institutions based on the nonprofit’s financial situation. This reflects an unbalanced decision-making process on the part of the donors. A well-rounded impression of the work a charity performs, its impact on various communities, the ways in which it governs itself and how it spends its funds should lead to a donor’s contribution decision.

“Donors using only one piece of information may have a false sense of confidence,” claimed Art Taylor, BBB Wise Giving Alliance’s CEO.

The BBB Wise Giving Alliance advocated for nonprofit organizations to provide more accessible and detailed resources for donors during the giving process. The group has developed a list of 20 standards on which they assess nonprofits for constituents looking to fund a cause. These guidelines, along with several additional practices, can help nonprofits increase revenue and build lasting relationships with donors.

Hold the board accountable
BBB Wise Giving Alliance looks for proper board operations when evaluating nonprofits. Routine checks on CEO performance, budgeting decisions and salaries all contribute to a well-run organization.

Create an exceptional website
A nonprofit’s website should be visually appealing, easily navigable and informative. It should present all relevant information in an organized manner and make it easy for donors to understand what the group supports, where the funding goes and how they can help. Avoid clumping too much information in one spot; give each topic its own landing page. Be sure to include a call to action in easily located positions on each page.

Tell an effective story
Every charity exists for a reason. Telling stories helps donors better understand the purpose of an organization and its tangible effect on the community. Among the information on a nonprofit’s website could be a success story from a person the NPO helped, a first-hand account of a volunteer experience or the benefits of working for the charity from the perspective of a long-time employee. Stories should be informative, emotional and positive.

Establish and post a pledge
Nonprofit Quarterly urged NPOs to develop a donor-centric pledge unique to their organizations. It often helps nonprofit staff stay focused if they have a set of expectations or mantras they can reference when they get stuck or lost. A donor-centric pledge should be a series of phrases and statements, each one contributing to the growth of the charity based on relationships with givers. For example, Nonprofit Quarterly listed the following statements as potential pieces to a pledge:

  • “Any person who chooses to become our donor has enormous potential to assist the mission.”
  • “We earn the donor’s trust by reporting on our accomplishments and efficiency.”
  • “Donors want to have faith in us, and it’s our fault if they don’t.”

These phrases may or may not apply to all NPO pledges. They do, however, represent powerfully motivating ideas that can increase staff commitment to donor relationships.

Aim to inform donors
Philanthropy News Digest encouraged charities to invest in making sure donors are thoughtful rather than thoughtless. In this instance, thoughtless simply means making a donation based on an emotional whim instead of information. Funders should know why they are giving their money to an organization and where it is going.

This is not to say thoughtless donors do not care about the cause. The problem these donors present is that they are short-term givers. It’s better to invest in committed and informed funding than rely on spur-of-the-moment contributions. Keep in mind, however, that storing contact information and following up with these emotional funders to better inform them of a mission can lead to a substantial relationship in the future.

Make promises you can keep
Part of earning trust among donors beyond finance is making promises that can be measured and kept. Getting Attention alluded to the mistakes made by the Red Cross during September 2001. In direct response to the terrorist attacks of 9/11, the Red Cross established The Liberty Fund to assist victims and the clean-up efforts. It turned out that over half of the $564 million raised had been stored away for future needs rather than going to the advertised cause. Misleading donors decreases trust and tarnishes reputations.

Create a financial education system
Nonprofits can also interpret the BBB Wise Giving Alliance research in a way that bends to donor needs. The Catholic Charities of Dallas has established a financial education program called Money Skills for Life that helps people create better lives for themselves by teaching them about fiscal management.

Donor management software provides nonprofits with the tools necessary to build constituent trust in the organization across all fields.