Gratitude and Impact. Gratitude and Impact. Gratitude and Impact. Gratitude and Impact.

Yes, I did mean to write those words over and over again. Why? Because these two words need to be on every nonprofit’s mind every time they think, “How can I raise more money”?

There are books and experts and classes and podcasts and more — all telling us how to raise more money to sustain and grow our organizations. That’s all great, but?without communicating gratitude and impact, donors won’t continue giving to you. In the case of younger donors, they might not even?start?giving to you if aren’t able to clearly convey impact.

I don’t mean overall impact writ large — I mean the answer to “where did/will my gift go and what did it achieve?”

I’ll break it down a bit. Let’s start with gratitude.

I can’t tell you how many times fellow donors have told me that they didn’t get any type of “thank you” from an organization they gave to — other than a receipt. A receipt with “thank you” written on it is nice, but it’s really the lowest level of, well, manners. It has no life to it, takes next to no time (if any at all), and it doesn’t recognize the recipient as an individual human being.

I know that everyone reading this knows these things innately for themselves, but when faced with organizational bureaucracies and limited resources, somehow we decide that the minimum expression of gratitude (or none at all) is just fine — as long as money is coming in from somewhere.

Not okay, IMHO. Every one of your donors deserves some form of gratitude. Without an ask for more money. A few years ago I learned about some colleges and universities calling non-donor alumni regularly for as long as ten years post-graduation (with zero results.). Could we maybe move some of those (non-performing) resources over to your new donors to express gratitude? Can’t we take a moment now — at the beginning of the new year — to call or email your newer donors just to say “thank you”?

My friend and colleague Claire Axelrad wrote?this piece?on the subject but applied it to annual reports. It’s called?“Transform Annual Reports into Gratitude Reports for the Best ROI”.?If you feel the need to stress about thank you notes — and often don’t get around to them because of that stress — read?this article?I wrote last year to give you back some perspective.

As far as conveying impact, we tend to offer broad, overly wordy, non-specific answers to the question of “where did my money go?", and almost always, that information is laden with asks for additional donations. As a donor (remember, you’re a donor as well), don’t you feel that the messaging fades into the background the moment you’re asked for more money?

We also know that the above doesn’t work long term.

A better idea might be something like the postcard I received recently from a political candidate I supported, thanking me for a donation by telling me very succinctly what my donation allowed her to achieve. It was simple, clear, had a great photo on one side, and made me feel glad to know that my gift meant something.

That rarely happens, though. Witness the ever-declining numbers of donors over the last several years:

According to?Independent Sector’s Quarterly Health Report?(December 2022), the amount of dollars given to nonprofits as of the second quarter of 2022 is higher than the same time in 2021, but the number of donors and retention of donors declined. A?Lilly School of Philanthropy?study from July 2021 revealed that where 66.2% of American households gave charitable donations in 2018, only 49.6% of U.S. households made a charitable contribution in 2000 — a drop of almost 17 percentage points during that time period. Although giving increased a bit during the first year of the pandemic, the number quickly went back to where it was pre-pandemic, and the decline seems to have continued since then. According to the?Independent Sector?report, this drop resumed a 10+ year downward trend that was seen pre-pandemic.

The largest declines in donors from Q2 2021 to Q2 2022 were among those who gave less than $100 (-17.4%) and $101-$500 (-8.0%). This sub-$500 segment of donors accounts for 86% of all donors and about 98% of the decline in donors.

There are many reasons for the decline, but included in those reasons are the facts that (1) trust in nonprofits continued to erode, and (2)?many nonprofits still don’t see the urgency of bringing new and younger donors into the mix. Do our gratitude practices today — especially relative to newer and younger donors — convey that these people are critically important to our success? Not so much.

So our gratitude is expressed almost exclusively to our current, larger donors, and our “impact reports” rarely offer a succinct answer to that question of “where did my money go?”

Both of those responses do little more than continue the cycle of focusing a huge percentage of our time on our current, older, wealthy donors, with next to nothing focused on the “new guys”.

Is it sustainable, or even remotely prudent, to rely on only older, wealthy donors for our ongoing sector health? I can’t think of any business sector where that would make sense.

I love the way that?this Lilly School report?responds to this data. The conclusion of the report reads, “America’s rapidly changing social and economic landscape provides both an opportunity and a challenge for the philanthropic sector to evolve beyond traditional fundraising methods.?To circumvent the declining giving rate and to inspire the next generation, nonprofits will need to adopt new practices for tomorrow’s donors.”

There you have it.