It’s unfortunate, but in the past decade Americans have become increasingly disillusioned with the way non-profits use their donations. In a recent study by the Luxury Institute in New York City researchers found that the single most important reason why wealthy donors are not making contributions to certain organizations is that they do not trust them to use the money properly.
Trust is probably the number one asset that non-profit organizations possess. It is an important factor in determining present and future donations to your organization. The non-profit sector is sometimes called the ethical sector, but once you lack accountability and our actions fail to reflect the highest standards of integrity, we lose friends and supporters.
What can you do to enhance donor trust and confidence to encourage donations and support?
- Focus on the care and feeding of your donors. It’s important to answer a donor’s questions as soon as you can. Set up a “desk” within your organization that handles all questions, comments, and concerns.
- Publish an annual report. Although this is not required by law, it is a good idea to publish an annual report that highlights your activities, accomplishments, and has a breakdown of your audited income and expense statements. Mail the report to your stakeholders and donors.
- Make sure your legal requirements and paperwork are current. Your IRS 990 form must be filed with the government annually. You also must file with the secretary of state’s office and have an annual audit or financial review completed. Make sure you have these documents available at your office in case someone wants to review them. This kind of transparency is important for donor trust and confidence.
- Account for the dollars accurately. If you receive dollars for specific programs make sure you use those dollars for the intended purposes and don’t just put them into the general operations budget. Make sure you report back to the donors on how their dollars are being used.
- Consider sending out a monthly e-mail newsletter. This is an inexpensive way to report back to the donors and let them know what is happening at your organization. This monthly e-publication does not have to be fancy and should include pictures and a letter from the executive director.
- If you have negative news, take the offensive and make sure you contact your donors and stakeholders before they hear about it in the newspapers or from the gossip grapevine.
- Look professional when soliciting donors. When asking people for money make sure your materials are well put together and look professional in their layout, language, and grammar. Use photos and other images to elicit emotion.
- Look at your organization from the standpoint of the donor. Find out from some of your key stakeholders and donors what they want in terms of accountability and donor relations. Develop vehicles that satisfy these needs.
- Hold an annual meeting, celebration, or event where you invite all of your key donors. Use the event as an opportunity to give them an annual state of the union report on your organization. This will help you build your donor relationships and it gives donors a chance to ask you questions.
- Give donors tours of your facilities on a regular basis. During these visits, introduce the donors to your staff members and let them see your team in action. It’s also a good idea to give donors the opportunity to meet some of your constituency.