There are four steps to asking for a donation, and the last step—saying thank you—might be the trickiest. But also the most important.

First, as a quick review, let’s look at the four main steps in the “donor pipeline” (a common phrase to refer to the process of asking for a gift):

• Identification—For a new donor this would mean getting their contact information. For a current donor this might just mean locating them as a possible candidate for a larger ask than the year before.
• Cultivation—This is the process of preparing the donor for an ask. Emailed newsletters, invitations to events, and coffee meetings throughout the year are common kinds of cultivation.
• Solicitation—The ask. Generally speaking, the higher the amount you ask for, the more cultivation is needed ahead of time and the more personal the ask should be.
• Stewardship—Thanking donors for their gift involves two steps: the thank you to the donor (invitations to special events, a personal note) and the recognition of the gift to the public (such as the annual report).

Why is stewardship so tricky and so important?

Because it’s a single step that is trying to do three different things all the same time:

1. Sincerely and appropriate thank donors for their gifts.
2. Appropriately recognize donors to the public.
3. Begin cultivating donors for another gift later.

Let’s take these one at a time.

1. Sincerely and appropriate thanking donors for their gifts

Donors should be thanked appropriately. That means that someone who gave $10,000 doesn’t get a form letter with their name misspelled. And someone who gave $25 doesn’t get a fruit basket worth more than the actual value of their gift.

These things sound obvious when I phrase it this way, but small nonprofits err on this step all the time.

On the one side, they often fall victim to creating excessive donor levels (following the model of the “big guys” like PBS and others) where donors get special benefits for giving above a certain dollar value. Donor levels can make sense, but they exacerbate a common mistake small nonprofits are already prone to: selling when they should be asking.

On the other side, small nonprofits often have high staff turnover and poor systems that make it likely that a major donor doesn’t get appropriately thanked. Staff gets distracted… the gift is already in hand, so it’s not as pressing… and now a big donor feels neglected and forgotten (because, in truth, they were).

So what are some ways to thank donors appropriately?

1. Send a letter to every donor that names the amount they gave, thanks them for their donation, and tells them (again) how it will be used. If you want, this letter can also be a “tax receipt.” Just write something like “This letter serves as a receipt for a donation of $*** to the Smallville Historical Society” so that the donor can save a record for taxes. (For donors who give more than $50 in a calendar year—and especially for donors who make recurring gifts—you should also send a receipt for all gifts made in the year so that they have the appropriate tax information by January 31.)
2. Send a personal card. It might be a generic card that just says “Thank you,” but is signed by everyone on the staff or on the board. Or, if someone at the nonprofit has a good relationship with the donor, it might be a personal card directly from that person. Send it with the letter.You can get a little creative here. When I was director of the Grand Cinema, we cut up 35 mm film from movie trailers and slipped a few inches of it through slits in the thank you card. The thank you card was preprinted with some information about the film itself (what the sprockets were for, how the sound was stored) on one side and just the words “thank you” on the other. By not writing “thank you for your gift,” we could use the notes for volunteers or other purposes.Our thank you cards were interesting, in line with our mission, and—best of all!—relatively cheap, since we had a virtually unlimited supply of film. There might be something linked to your organization that would be similar. If it’s an interesting enough card, donors might set it out or put it on their refrigerator, creating a visual reminder of your nonprofit around the house.
3. Call donors and thank them directly for their gift. It’s true, no one picks up the phone anymore, especially if they can see it’s a nonprofit they think is calling to ask for money (the horror!). But a personal call to thank a donor—especially when you are just leaving a message, takes almost no time at all and will stretch for miles later. As discussed in The Little Book of Gold, asking each board member to call three to five of donors each will make sure that all of your top donors are thanked personally.
4. Host an event to thank your top donors or invite them to an event you already would have held anyway. This should be for no more than your top ten percent of donors, the people you expect you will most likely try to cultivate for a larger gift next year. This should be done as cheaply as possible without it looking cheap. Maybe every board member can donate a bottle of wine and you put money toward some fancy and expensive chocolates. That would make for a very nice reception.

2. Recognizing donors in public

Most of the time, thanking a donor “in public” means writing their name in some sort of annual report, whether that’s an online document or a printed report. For some capital gifts or project-specific gifts, it might be more involved (naming, a plaque, a donor wall, or some other signage).

Whatever it is, recognizing donors in public requires something important: a good database of your donors and their gifts, and staff who knows how to use it.

In order to be able to produce an annual report that has a list of every donor, you have to be able to reliably reproduce a list of donors, the date they gave, the amount they gave, and how they prefer to be recognized (John Smith and his wife Jane Smith-Jones will probably not look kindly on you if they are recognized as Mr. and Mrs. John Smith.)

Having a reliable database and systems to get it updated accurately needs to be viewed as an essential part of the thank you process, which means its also an essential part of the entire donor pipeline.

It comes in handy for the other thing that thank you letters accomplish: furthering the relationship to allow for additional (possibly larger) gifts in the future.

3. Cultivating donors for another gift later

The final task of thanking the donor is laying the groundwork to ask for another gift later. If you look at the donor pipeline as laid out above, “stewardship” very easily leads into “cultivation” creating a virtuous circle of cultivating a donor, asking them for a gift, stewarding them for their gift, and then blending that right back into cultivation. (“Identification” may still be seen as a part of this process in the sense that after stewardship, you identify them as a prospect for another—likely larger—gift.)

So making sure that a donor is well-stewarded is, in both the short and the long run, going to be extremely beneficial to your nonprofit.

Make gratitude a habit. Show your donors how important their contributions are to your nonprofit in your words and in your actions. Your nonprofit will blossom because of it.