Why Donor Stewardship Is a Revenue Strategy
When Laurel McCombs, senior philanthropy adviser at The Osborne Group, looked at the numbers for a nonprofit client, the math was immediately clear. The organization was losing the vast majority of its donor base every year.
“This is not like a ‘Oh, gosh, it would be nice to keep our donors,’” McCombs said at her session, “Beyond the Thank You — Retaining Donors Through Impact-Driven Stewardship,” at AFP ICON 2026. “It's real impact on our bottom lines, so it wouldn't just be nice to keep our donors. It's imperative that we keep our donors.”
She wasn't describing an outlier. The sector's overall donor retention rate has hovered around 43%, with retention among new donors plummeting to 19%, according to the Fundraising Effectiveness Project. Though total giving dollars rose 5% in 2025, the donor pool shrank by 3.6% — meaning organizations are increasingly dependent on a smaller group of more loyal donors.
McCombs made the case that most organizations are misdiagnosing this problem. The issue isn't a generosity deficit. It's a stewardship deficit. And fixing it, she argued, is the most cost-effective revenue strategy available.
“People are generous,” she said. “They just aren't giving to us — and we have to own this.”
You're Paying Acquisition Costs for Donors You Already Have
The logic of acquisition investment is that it costs to acquire new donors, but nonprofits can recoup that investment many times over with their lifetime value. But that logic only works if donors actually stick around. Expensive tactics like events and direct mail are intended to acquire donors, not retain them, McCombs said.
“The problem is we don't use those strategies just for acquisition,” she said. “We use them for everything. They've become revenue generators primarily, instead of primarily acquisition drivers. And so we just use them year after year after year to solicit people and then do nothing with them in between. And then lose people, lose people, lose people.”
McCombs shared a model built by her colleague, Robert Osborne Jr.: A nonprofit with 2,500 new donors giving an average of $200 each in year one would result in $500,000 in revenue. Run that donor base at the sector's current 43% retention rate for five years, then re-run it at 60%. The difference is $370,000 in additional revenue.
“Who wouldn't like to have an extra $370,000 in their revenue, coming from people who have already given to you, already said to you, ‘I like you. I like what you're doing. I want to be part of this’ versus $370,000 from people that you're going out and having to establish that relationship,” she said.
What You're Calling Stewardship Probably Isn't
Part of the problem is definitional. When McCombs asks organizations to describe their stewardship programs, she hears a familiar list — newsletters, annual reports, and occasional postcards.
“I get a laundry list of one-way mass communication,” she said. “I'm not saying don't do that, but don't think it's enough.”
Stewardship has four components, but most organizations are doing the first three and stopping there.
- Accountability. Gift acceptance policies, accurate financial reporting, following through on what you said you'd do.
- Acknowledgment. Skip the thank-you and you won't get the next gift, but sending it doesn't earn you one either.
- Recognition. Many organizations have moved away from tiered donor lists by dollar level, highlighting loyalty instead — five-year donors, 10-year donors.
- Impact-driven stewardship. This is where retention is won or lost.
But before any of that matters, stop asking for money in a stewardship communication.
“If you ask in your communication, it is not stewardship,” McCombs said. “If you put a donate button in your stewardship email, it is not stewardship. If you put a [business reply envelope] in your annual report, it is not stewardship. The minute you ask for money it is solicitation. You are not giving your donors room to breathe.”
Donors notice. They want to feel like partners, not ATMs.
“Look, if I have a friend that I know every time I pick up the phone they're going to ask me to drive them to the airport, I'm probably not picking up the phone next time,” she said.
What Impact-Driven Stewardship Actually Requires
The real work starts at impact. And that means rethinking the relationship entirely — from one where donors are thanked for their generosity to one where they're partners in solving a specific problem.
“We've got to move away from this idea of saviorism, like, ‘Oh, thank you so much for helping these poor, poor service dogs,’ … to instead say, ‘Together, we're going to make sure that these are the best darn service dogs that ever did service and together, we're going to solve this problem,’” McCombs said.
That shift forces nonprofits to go back and show donors what happened. Outputs — meals served, kids matched with mentors — aren't impact.
“Your theory of change is not as obvious to other people as it is to you,” she said. “You all intimately know that if you do A, then B happens. Nobody outside of your organization necessarily knows that. Do not assume that people know that. You have to draw that line for them. If we do A, then B happens — tell them what happens.”
That also means rethinking how you measure success. Most development meetings, McCombs noted, focus on the next ask. She proposes a different perspective.
“What if we instead said, ‘What are we doing to engage our donors more? What are we doing to involve people more? What is our strategy to do more two-way engagement with our donor base?’ And move them along this continuum and then trust that the giving would come because what we're doing now isn't working all that well, so maybe give it a shot,” she said.
How to Know If Your Program Is Actually Working
McCombs recommends foundational pieces for any nonprofit building or rebuilding a stewardship program — a gift acceptance policy, an acknowledgment protocol, a stewardship plan, and a stewardship calendar.
Then measure. Retention rate and upgrade rate are your two primary stewardship key performance indicators — the numbers that tell you whether the program is moving the needle. Track them the same way you track campaign revenue.
And audit what isn't working. If an activity takes significant time but you can't connect it to a stronger donor relationship, stop doing it and use that capacity for something that does.
“If you started to spend even just as much time stewarding intentionally your donors and focusing less on acquisition, what would happen to your overall cost per dollar? McCombs asked.
