How, When and Why to Thank Donors

Sending a timely, relevant thank-you letter in return for a gift is the prudent and polite thing to do — both in our private lives and in fundraising. It’s all about preserving a relationship, communicating appropriately, and establishing and maintaining a personal style.

Ms. Manners taught us the rules of etiquette when writing personal thank-you notes, but what about a donor program with thousands of people to thank? What are the rules? And who gets to write them?

Rather than jump on my personal soapbox, I sought the advice of nonprofit-development professionals and agency consultants. Here are some of their thoughts.

When to say ‘thanks’
Everyone on my panel agreed on one thing: A speedy reply by mail is vital. More than a dozen professionals I spoke to said they send a thank-you note within two days to two weeks, with an average of “less than a week.”

The acknowledgement should come in the mail and reflect the style and mission of your organization. Online gifts should be acknowledged immediately with an e-mail reply.

“Timing is critical. Mail your receipts daily. Response and cash flow will improve dramatically,” says John Graham, vice president of ministry advancement for Atlanta-based In Touch Ministries. “Do not send receipts out weekly or monthly. When this happens, donor bonding is eroded, contribution revenue is not maximized, and cash flow is deferred.”

Ken Burnett, author of Relationship Fundraising and chairman of the U.K.-based Cascaid Group, concurs.

“All gifts should be acknowledged. It’s only polite,” Burnett says. “Plus, a prompt and appropriate ‘thank you’ leads to bigger gifts. The lady who sends you $10 today may in the future leave you a bequest of her house in Key Biscayne, Fla. But only if you are nice to her.”

But Mal Warwick, founder of California-based Mal Warwick & Associates, has sympathy for the mountain of work involved.

“Same-day turnaround is ideal,” Warwick says. “In the real world, less than one week is often the best that I can hope for.”

If you’re wrestling with whether or not to acknowledge every gift, think about the average gift of your donor file.

Brian Terpstra, account director at Massachusetts-based L.W. Robbins, suggests a quick file audit before proceeding.

“For some nonprofits with an average gift in the $10 to $12 range, it’s vital to acknowledge at the lower end,” Terpstra says. “Low donors may be the critical mass the nonprofit has had on its file. For others with an average gift in the $15 to $50 range, it may not be cost effective to acknowledge the $5 and $8 donors. Compute the lifetime value of each segment.”

Organizations also should pay special attention to first-time donors, for they might be testing a new relationship with you, Terpstra says.

“[First-time donors] should always be made to feel special,” he says. “They deserve more of a welcome message and should be sent more information about the organization. Better yet, send new donors a welcome kit to let them know more about your organization and give them more opportunities to give you feedback regarding why they gave. Include other ways the donor can communicate with you — e-mail, call-in number.”

Johanna Antes, director of support for RTN Family Stations, a group of Christian broadcasters, agrees: “First-time donors of any amount receive a thank-you phone call from one of our on-air announcers. Our donors are positively shocked when they get the call. They hear these people on the radio every day so they are excited to hear them on the phone.”

You might not have a radio personality on your team, but a call from a staff member could help your organization stand out.

Double-duty letters?
Should you solicit another gift in your thank-you note to new and existing donors? This is where my colleagues disagree.

Burnett: “No. Never. That’s not a ‘thank you,’ that’s a further solicitation. Though many won’t say so, most will be offended.”

But Tim Burgess, president of the Domain Group, disagrees: “Absolutely. Giving donors the opportunity to give again is a great service to the donor. The donor made a well-founded decision to give because they wanted to give. They are emotionally bound to your organization.”

Terpstra takes the middle ground: “Recognize their generosity, but also let them know the need is still great and an additional gift would be helpful. The gift ask in the acknowledgement should be softer. Add a reply envelope or a wallet-flap envelope with some standard gift asks on the flap if you are not comfortable including an extra-gift reply form in your acknowledgement.”

Organizations report that as much as 15 percent of their donor income can be tracked back to a request made when acknowledging a gift.

Not just a courtesy
Besides building relationships, gift acknowledgements serve administrative purposes, too. The Internal Revenue Service requires that all 501(c)(3) organizations inform donors in writing of the value of their charitable contribution for all gifts of $75 or more and when offering a substantial premium or incentive for giving. What’s more, donors who contribute $250 or more must obtain a written document from the charity to qualify for a tax deduction. Charities are not required to acknowledge high-end gifts unless the donor requests it, but it has become common practice because it just makes sense.

For a very detailed explanation of these requirements, see the “On the Record” column in the March and May issues of FundRaising Success. You can find them now in the Article Archives at www.fundraisingsuccessmag.com.

That’s not all
New postal rules remain quirky. As of June 1, new USPS regulations and developing standards leave in question whether you can acknowledge lower-level gifts using the cheaper nonprofit bulk-mail rate.

The Direct Marketing Association sums it up in this statement: “Unlimited personalization is allowed so long as the exclusive reason for sending the mail piece is to solicit or advertise a product or service.”

Well, that seems to eliminate tax receipts and leaves a burning question. If the IRS doesn’t require you to acknowledge most gifts with a receipt and you ask for an additional gift as part of a personalized thank-you note, can you still mail at the bulk rate? Details to come.

Tom Hurley is president of the not-for-profit division of DMW, a full-service, direct-response advertising agency with offices in Wayne, Pa.; Plymouth, Mass.; and St. Louis. You can reach him at 774.773.1200; or via e-mail at thurley@dmwdirect.com.