Donor Discontent The Biggest Risk in Fundraising

The biggest risk your organization faces in fundraising is donor discontent. When a donor is upset, you risk losing the donation (you might have to return it), as well as all future donations. You also risk negative publicity, and in this day and age where donors can publicly voice their concerns and issues using digital technology, that negative publicity will have a wider reach than the word of mouth tongue lashing.

The top five reasons that donors might be unhappy with your institution are:

  1. They believe that funds were either misused or mishandled
  2. They are upset about governance practices, such as employee compensation.
  3. You did not properly acknowledge their gift
  4. You did not properly protect the donor’s privacy
  5. You ignored the donor’s wishes

It is important that your organization has safe guards in place to prevent the above from handling. For instance, using a donor database and making sure that all pertinent information is entered will make sure that donor intent is followed and that acknowledgement of the gift happens. By publishing donor newsletters and an annual report, you are being transparent in how your organization uses its earned and philanthropic revenue and that will decrease the chances of donors thinking funds are being misused or mishandled. On you website, have a place where you can document the decision making processes for governance.

When donor discontent happens, it is crucial that you address the situation with the donor IMMEDIATELY. If the discontent is the organization’s fault, you must apologize, don’t make excuses, but explain why it happened and how you are making changes so that the situation does not happen in the future. It is also a good idea to ask them for their advice on how the organization could do better. Finally, ask the donor what the organization can do to make up for the error. There are going to be times when you won’t be able to fix the problem, but sometimes the donor just wants to know that you have heard them and you are working to resolve the issue and prevent it from future occurrences.

The one thing that you really need to do, is to make sure you are properly engaging your donors. Donors give because they believe in your mission and they want to know that their gift is making a positive impact on your mission. You don’t have to meet with your donors to engage them; active engagement can happen through your website, social media, and electronic communications. The key is to make sure that as you actively communicate with them, that you are monitoring their needs and attitudes towards your mission and organization. Through this monitoring, you can prevent discontent and make sure you are providing them with the type of engagement activities that they want, which will increase the chances of future donations.

I know that many nonprofits have limited staff resources, but you cannot skimp on donor stewardship. If you do, you will lose loyal donors and risk getting a reputation that your organization is not donor friendly, and when that happens, your mission will suffer.

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