Donor recognition is how non-profits thank and cultivate relationships with supporters. It can be a simple thank you letter or a formal procedure, such as engraving a donor’s name on a plaque. Non-profits rely on gifts and use donor recognition to keep donors involved.
Donor recognition is how nonprofit organizations recognize individuals and entities that make contributions to support the organization’s work. In some cases, it could be a simple thank you letter. In others, it may be a formal recognition procedure, such as engraving a donor’s name on a contributor’s plaque or wall. The donor recognition process is part of how a nonprofit cultivates an ongoing relationship with a supporter.
Saying “thank you” when a gift is given is never necessary, but it’s always good form. Non-profit organizations rely on gifts to make up the bulk of their operating budgets. It is in their interest to observe all formalities and express appreciation for gifts. Donor recognition is typically a function of an organization’s development department. The development team manages the entire relationship with donors and potential donors.
One of the first things a development officer does when a donation is received is send a donor acknowledgment letter. There may be other forms of thanks extended to the giver, but the basic letter ensures that the giver is formally thanked at least once. The thank you letter is an official step in the donor nurturing process, considered best practice in the fundraising industry.
In some cases, the donor acknowledgment letter serves a secondary purpose of satisfying tax requirements. For example, the US nonprofit tax code requires organizations to provide donors with a receipt for their gifts, indicating whether the gift is tax deductible. The receipt must also contain language that indicates that nothing of value was received in exchange for the donation. Instead of sending a separate receipt, many organizations use the donor confirmation letter as a receipt, combining the two functions.
There are other ways to recognize donors once the thank you letter has been sent. Some organizations organize a special donor recognition event once a year. Other organizations publish a list of donors in an annual report or as an advertisement in major publications. In some cases, nonprofits design special recognition programs that include adding donor names to a donor wall or a special donor plaque displayed for a year or more.
The key to proper recognition is understanding the role it plays in nurturing givers. Nonprofits try to develop long-term relationships with donors. This makes sense, because donors are their main source of income. Development Giveaways are tasked with taking donors through the giving process, ensuring they donate regularly and increase the size of their gifts over time. Donor recognition is an important way to make donors feel appreciated and keep them involved.
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