Recognition and Stewardship

It has been said that good stewardship is the last step is the first gift and the first step in the next gift. Stewardship includes ensuring that the donor’s best interest are always the primary consideration, conforming to all applicable laws, making certain that all fundraising is done with the highest ethical standards, and developing proper systems of acknowledgment and recognition for the donor.

Donors should never be persuaded to contribute to a cause they don’t fully support, or to make a gift that may not be in their own best interest. The Association of Fundraising Professionals (AFP) provides a code of ethical standards and principles of professional practice that serves as a guide for its members but can provide a solid ethical basis for all fundraisers. This code may be found on AFP’s website at www.afpnet.org. In addition to this code, there are numerous other professional organizations that have similar codes of ethics.  Some common issues that appear in all these codes are that fundraisers, either staff or consultants, should never work on a percentage based fee, that fundraisers must be open and honest about the organizations and its mission, and that fundraisers will always conform to legal requirements regarding the solicitations, recording, use, and acknowledgement of gifts. In addition to these codes of ethics, there is a Donor Bill of Rights, also available of AFP’s website, This Bill of Rights informs the donors of things they are entitled to when making a gift to a nonprofit. For example, donors have right to know who is on the governing board of the organization; whether the person soliciting them is a professional counsel, paid staff or a volunteer; and the right to remain anonymous in their giving among other things.  I encourage you to promote this Bill of Rights and adhere to its principles.

Other important aspects of all fundraising that must be considered during a campaign are the legal requirements of the IRS and other regulatory agencies, such as state and local municipalities that may govern fundraising activities. For example, most states regulate fundraising activities by requiring nonprofit organizations, fundraising counsel, and professional solicitors to be registered with them before conducting fundraising campaigns. Your organization should be aware of their own state’s requirements as well as other states in which you may plan to solicit donation. You also need to be sure that before engaging a paid consultant or professional solicitor, that those firms are registered within the state if they are required to do so.  IRS requirements in regard to “quid pro quo” contributions, fair market value of considerations given to donors, and statements for donations over $250 must be followed in the recording and acknowledgment of gifts. For information on state requirements, contact your department of state. Your accounting firm can give advice and counsel regarding IRS regulations (This article is not meant to provide legal or accounting advice, please contact appropriate counsel for this advice))

Acknowledgment of donors’ gifts should always be done promptly. Sending a thank you letter within twenty-four hours of receiving their gift is recommended.  All donors should be acknowledged with a personal letter of thanks, regardless of the size of their gift.  It is said that a donor should be thanked seven times for a gift before asking for the next gift.  While you would not want to send seven thanks you letters, there are other ways to thank the donor.  A personal phone call from the volunteer who solicited the gift, a handwritten note from the executive director or chair of the board, a phone call from a program recipient--all can do wonders to bond the donor to your organization.  And, of course, the formal receipt with the IRS statement stating that no goods or services were received in consideration of this donation can be considered another form of thanking the donor.

Recognition is another facet of thanking the donor for their gift.  Recognition can come in many forms. Listing donors in the organization’s newsletter and/or annual report, issuing a press release about a major gift, donor walls, bricks, and personal mementos given to the donors are all ways of providing donor recognition. Special recognition events at which donors are publicly recognized for their contributions can also be effective.  Remember, however, that some donors wish to remain anonymous and their anonymity must always be ensured.  Providing a place on the pledge card or letter of intent for donors to print their name exactly the way they wish to be recognized, and a box where they can check if they want to remain anonymous are simple ways of ensuring that donor recognition will be done according to the donor’s wishes. A good software system (discussed in an earlier article) will also provide the means to track this information when it is time to prepare the recognition items. Of course, these pledge forms and software systems must be in place at the start of the campaign, so recognition must be considered before the campaign begins and be a part of the campaign plan, not decided at the end of the campaign when it is time to recognize donors.

Besides adhering to legal and ethical standards, the organization benefits from good stewardship in other ways as well.  Professional staff will feel more confident knowing they are acting according to the highest professional standards, and donors feel more confident knowing the organizations they support are following good stewardship practices.  Many an organization has been the beneficiary of a huge estate because they provided good stewardship of the donor’s smaller gifts.

To learn more about identifying donors, take my course, Build Donor Relations that Lead to Major Gifts. Sign up here