The Ethics of Donor Stewardship: Are You Keeping Your Promises?

How many times have you heard, "We need more donors!" from your board or executive director?

Nonprofits spend considerable time and resources acquiring new donors. But what happens after someone makes a contribution?

Does your organization send a thank-you letter and then move on to the next event or grant? Do you have a written stewardship plan to keep donors informed and engaged?

As I've shared over the years, strong stewardship is the foundation of successful fundraising.

But donor stewardship goes beyond building relationships. There are ethical responsibilities involved in accepting and managing charitable contributions.

Ethical Stewardship Begins With Accountability

October is Ethics Awareness Month for the Association of Fundraising Professionals (AFP), an opportunity for nonprofit professionals to examine their fundraising practices.

AFP's Code of Ethical Standards emphasizes honesty, transparency, donor privacy, and responsible stewardship of charitable contributions.

Fundraising professionals have an ethical responsibility to honor donor intentions and provide appropriate reporting on the use and management of contributed funds.

Consider a donor who makes a $25,000 contribution to support your organization's youth mentoring program.

Six months later, the donor receives a general newsletter highlighting organizational activities but no information about the mentoring program.

Did your organization fulfill the donor's expectations? The donor made a contribution for a specific purpose. Your organization has a responsibility to communicate how those funds supported the program and the resulting impact.

This is where ethical stewardship and donor retention come together.

Five Practices for Ethical Donor Stewardship

Here are five suggestions to help your nonprofit strengthen donor relationships while maintaining ethical fundraising practices.

1. Honor donor intent.

When donors make restricted contributions, your organization must use those funds according to the agreed-upon purpose.

Establish procedures for tracking restricted gifts and communicating donor

expectations to program and finance staff.

Never redirect restricted funds without appropriate authorization.

2. Communicate your impact.

Donors want to know how their contributions make a difference.

Provide regular updates highlighting program accomplishments, measurable results, and the people served by your organization.

Be honest about challenges and setbacks. Avoid exaggerating outcomes or promising results your organization cannot guarantee.

3. Protect donor privacy.

Your donor database contains personal and financial information. Establish policies addressing access to donor records, confidentiality, and appropriate use of donor information.

Respect donor preferences regarding public recognition and anonymous contributions.

4. Thank donors promptly and personally.

A timely acknowledgment demonstrates appreciation and confirms receipt of a contribution.

Personalize your communications whenever possible. A handwritten note, phone call, or personal message from leadership helps donors feel valued.

Remember, stewardship should not be limited to your largest contributors.

5. Keep your promises.

Did your organization promise a program update, site visit, or impact report?

Follow through on those commitments.

If a program experiences delays or changes, communicate with donors and explain the circumstances.

Honest communication strengthens trust, even when results differ from original expectations.

Stewardship Is Everyone's Responsibility

Donor stewardship should not fall entirely on the development department.

Program staff provide impact information. Finance staff track contributions and restrictions. Executive directors and board members help build relationships with supporters.

Everyone has a role in ensuring your organization fulfills commitments made to donors.

During AFP Ethics Awareness Month, take time to review your organization's stewardship practices. Remember, ethical fundraising doesn't end when the donation arrives.

Strong stewardship builds trust, demonstrates accountability, and creates lasting relationships with the donors who support your mission.

Cheers,

Michelle Crim, CFRE

Dynamic Development Strategies helps small and mid-size nonprofit organizations strengthen their fundraising strategies through coaching, program design, grant writing, and fundraising services. We understand your challenges and welcome the opportunity to help.