In order for ministry nonprofit organizations to improve their donation strategies, they must invest in donor management software.
The Cleveland Banner covered a talk that Matt Ryerson, CEO of United Way, gave to a large gathering of volunteers, leaders and members of nonprofit groups in Ohio. Because he believes that many NPOs may be on the brink of extinction due to lagging funding, Ryerson primarily focused his speech on encouraging organizations to move away from their traditional methods of operation. He reiterated the fact that nonprofits have to remember that they have a dual purpose: They are supposed to fulfill their mission, but they also must meet a financial objective. Without a strong business model, the mission cannot succeed.
Instead of ineffective traditional fundraising, Ryerson stated that good money management, strong leadership, various funding sources and clear vision are the keys to keeping a nonprofit thriving. Due to the large costs incurred by hosting a fundraising event, it makes more sense for organizations to focus on building connections with donors over time – specifically establishing a relationship prior to asking for any monetary support. Direct donations create a strong giving foundation and are therefore the most essential elements of a business model. When constituents become invested in the mission, they are more willing to donate.
Unfortunately, smaller gifts from constituents spread across the bottom tier of donors are decreasing. This increases the demand on major donors to give more and the future of an organization begins to rest on just a few key players. The now infamous ALS ice bucket challenge is an excellent example of what many small donations over a short period of time can do.
According to Ryerson, in order for ministries to connect with this bottom tier and their future givers, they must embrace technology and improve the way younger generations perceive organizations. Young adults and millennials are willing to give but either cannot or do not because of unemployment or lacking awareness of a nonprofit’s purpose. The use of social media and website content development are two ways NPOs can better explain their purpose, define their role in the community and display results.
Strategy No. 1: Appeal to donor wants
The Center for Effective Philanthropy conducted a survey of 6,086 donors from 47 different community foundations to find out what motivates them to give. Interestingly enough, age, gender and race played no significant role in determining a donor’s overall satisfaction with an organization. One way to put this information to use is by considering the behaviors of donors rather than their demographics when looking for better methods of operations. For example, a nonprofit could create mailing lists based on donor tendencies so that when a relevant event takes place, the people most likely to get involved can be notified first.
Donors in the study were also found to be most satisfied when an organization responded promptly and accurately to a constituent request for assistance and when the donor felt the NPO had a significant impact on the community. The leadership and staff of organizations must ensure that they remain connected to the people and neighborhoods they serve, without developing alternative goals or veering off course from their mission. A majority of survey respondents believed their NPO had a good impact on their community, but only one-third saw this impact as substantial. It is also worth noting that 21 percent of donors first heard about their organization by word of mouth from a friend or current member. Since happy donors are more likely to give regularly and recommend an organization to someone else, ensuring these two goals are met is incredibly important.
Strategy No. 2: Implement software solutions
For any ministry nonprofit looking to establish stronger roots and continue growth into the future, implementing a donor management software system is crucial. With this type of software, nonprofits can better connect with donors and ensure swifter response times. Constituents can manage their own profiles, staying connected to their organizations and determining a giving schedule that works for them. Creating donor groups and mailing lists is simple with donor management software.
Donor management software technology is essential to improving both a ministry’s mission and its business model. Without software solutions, as Ryerson puts it, a nonprofit may go the way of the woolly mammoth.