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Does Your Organization Have “Relationship Capital?”

Resource Center - Foundation

By Kelly C. Albanese

(July 17, 2012) Relationship capital represents the quality of your interactions and the bonds that you have developed with your donors, and it can indicate your position in their philanthropic priorities. With more competition than ever for charitable resources, investing in your relationship capital with donors and prospects can give your organization the edge it needs to stand apart from the crowd. 

So how does an organization develop relationship capital? The first step is to assess your relationships with current donors. Do you know the people who provide the largest gifts to your organization’s annual fund, events or to a previous major fundraising effort? Here are some questions you should consider in anticipation of your next campaign.

1) If one of your most significant donors walked into your office, would you recognize her?

Strong relationships need to go beyond a timely thank you note for an annual contribution. A regular telephone call, or even better, a personal visit to thank donors and update them on what their contributions mean to your organization is essential to maintaining their backing and deepening their support. In the competitive race for charitable funding, ultimately people give to people, and developing personal relationships with your top donors is critical as you ask for greater financial commitments.

2) What motivates your organization’s best supporters?

It is important to understand why these donors give consistently to your organization. Some donors support institutions because of relationships with key leadership or staff. Others give because they identify with your mission, vision and purpose. There are donors who want to support a new building project, while others would prefer to give to maintain your programs or start a new initiative. It is critical to understand what your top givers are passionate about and who might influence their support if you are going to further develop these important relationships.

3) Have you taken steps to recognize and engage top donors?

Many successful nonprofits have created special recognition societies to honor their top supporters, which can provide an opportunity to gather these individuals and update them on your recent successes and current priorities. Many significant donors, however, would welcome the opportunity to assist you in promoting your mission. Placing a donor on a development committee, for instance, and asking him to identify new supporters could increase your annual fundraising and might even serve as a test-run for service on your board. 

Your volunteers will be the first donors to any campaign.  They are at the front of the line, endorsing your plans before others are asked to give. The Bank of America 2010 Study of High Net Worth Philanthropy found that, in 2009, high net worth individuals gave more on average to organizations where they served on the board or had another oversight role. They also gave more on average to organizations where they volunteered and believed their gift would have the largest impact.

4) Do you have a strategy for moving donors to greater levels of support?

Highly effective nonprofits implement a systematic plan to invite one-time donors to become regular donors, regular donors to grow in their support for the organization, and major donors to consider planned gifts to create a legacy of their support. A Moves Management™ plan will expand your list of major gift prospects and develop deeper relationships with donors as they continue to invest in your organization.

Ways to Strengthen Relationship Capital

There are many strategies your organization can adopt to cultivate key relationships and help develop relationship capital:

Where ever possible, personally visit your top donors. If your donor community is close to your office, establish a regular schedule to see them to ensure they know how important they are to your success. These visits need not be limited to development professionals – invite other colleagues to join you in reaching out to donors. As development office travel budgets shrink, organizations must become more creative when reaching out to donors who live farther away. Some institutions have asked senior staff to bundle donor visits whenever they travel. Board members can also be of help by reviewing lists of key supporters in their area. Phone contact, handwritten letters and email are helpful tools to maintain donor relationships, but a face-to-face meeting will go a long way to cement a long-term friendship with your organization.

Try something new. Be sure to e-mail good press that your organization receives. Consider sending your best donors a book relevant to your mission. To consistent supporters, some organizations deliver flowers or send best wishes on birthdays and other special occasions.  If you are hosting a significant event, such as a nationally recognized speaker or a dedication, be sure to personally invite your top donors. Also, a good old fashioned handwritten note just to say “hi” and express your appreciation for their past support is always appreciated, especially considering how rarely we receive personal mail these days!

Communicate the impact of donor support. Studies indicate that just 20 percent of donors believe that their donations have a major effect on the organizations they support. The ability to demonstrate impact and communicate back to supporters can distinguish your organization and strengthen your bond with donors. Today’s donors are sophisticated and savvy. Many view their charitable giving as a philanthropic investment, and, with increasing frequency, are expecting reports outlining their return on investment.

Examine your database. Do your records have sufficient information about your relationship with donors? Your fund development database typically contains biographical and recent giving history, but does it contain all the information you know about your donors? Modern software can archive notes on all your contact with donors, including comments from phone calls, copies of letters, and dates of all communications. When there are several staff members or former staff members who have spoken to a donor, this is even more critical.  As you reach out to your key supporters, having a central repository for this information will help keep the process organized and your donor and prospect knowledge current.

Consider conducting an assessment or planning study. An assessment or planning study is the most comprehensive step your organization can take to assess relationship capital.  A study can help determine if your donors and contacts consider your organization a philanthropic priority. Studies can also identify potential volunteer leaders and new prospects, as well as gauge potential support for a specific project. A key benefit of conducting a study is the opportunity to engage donors by requesting their feedback regarding your plans while they are still in a formative stage, helping to instill a sense of ownership and strengthen connections.

Taking the time to assess your relationship capital can help you plan for the future and position your organization for sustainable fundraising success. Failing to make this important investment is a mistake your organization cannot afford to make.

Kelly C. Albanese is assistant vice president, marketing communications, at CCS. This article originally appeared in the blog CCS Philanthropy 360. Reprinted with permission.

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