Donor Recognition and Stewardship

Amy Schiffman
January 4, 2018

Happy New Year! Welcome to Part 8 in our series about capital campaign development. So far we have covered a lot of territory, including campaign readiness, goal setting, feasibility, leadership and board development, the creation of supporting materials, the case for support, prospect list development and research! Before we get to the cultivation of key prospects, I want to skip ahead and talk about donor recognition and stewardship. Why? Because showing appreciation to our donors and planning for continued relationship building is perhaps one of the most important functions staff and lay leadership can play in a campaign. And an intentional plan for thanking and recognizing our donors should be conceived and documented before the first gift is solicited.

First let’s talk about recognition. Because capital campaigns are typically focused on the building or renovation of a facility, recognition usually involves an opportunity to acknowledge major gifts with plaques, either individually on rooms and large spaces or on a group donor wall. Many campaigns acknowledge donors in both ways – in other words, if a donor makes a gift large enough to “name” a classroom in a school, they might be recognized both on a plaque outside the classroom AND on a donor wall in the school’s front entryway. Recognition policies are typically determined by the organization’s capital campaign committee and then approved by the board. They should also be documented within the organization’s gift acceptance policy.

It is customary to include a menu of naming opportunities within the organization’s campaign support materials, listing opportunities to name (or underwrite the cost of) a particular room, space, outdoor area or even a new program. Many capital campaigns include within their budgets an endowment to cover the cost of continued maintenance on the project or even a program to be offered within the new facility, and these opportunities can be listed on the naming menu as well. Pricing naming opportunities can be tricky. The gift associated with naming a space can be anywhere from 25 – 50% higher than its actual cost – this is because the gift must include the cost of fundraising for the project, legal fees, environmental and zoning fees, marketing, and increased facility maintenance.

It is important to create a pledge agreement that makes the terms around the gift and its payment as clear as possible and outlines your plan to publicly recognize the gift (or not). Recently, organizations have realized the importance of refraining from offering lifetime naming opportunities on physical spaces. This is because most spaces need some type of renovation or even complete overhauls within 20- 25 years of original construction, and if the organization locks itself into a lifetime agreement with its donor, they do not have the ability to seek out renewed or new sources of funding when the building requires a rehab, renovation, or relocation. So, unless the gift is so large that the organization is willing to guarantee the name in perpetuity, they should include language in the gift agreement that specifies the term of the donor’s recognition. It is common to offer the naming donor (or the donor’s descendants) the right of first refusal when it comes time to renovate or re-build. This too should be documented within the agreement. This sounds complicated but don't panic! This week's freebie will help you out with this tricky part of the process.

Now let’s talk about donor stewardship. Not only must we come up with a plan to formally recognize our donors before we solicit even our first gift, we must also determine our strategy to continue to thank, update, show appreciation and maintain a close relationship with our capital campaign donors.  Most sophisticated campaigns will do this both by giving level and by individual for their top 20 – 25 donors. First, define the giving levels for your campaign, and based on the work you have completed in your donor recognition plan, decide who gets what. It may be that your organization has decided to offer donors at the $25,000 level and above the opportunity to be recognized on your donor wall, but those at the $50,000+ or $100,000+ level can also “name” a space in the new facility, and this gift will be recognized with a donor plaque outside of the room as well.

A stewardship plan by giving level would list the benefits or “moves” associated with each giving level ($25,000+, $50,000+, $100,000+, $250,000+, $500,000+, $1,000,000+, etc.) and is often an internal document. The donor wall and/or listing on a plaque might be just one of the moves or benefits. Others might include a special donor newsletter, an insiders briefing, a special reception, VIP seating at events, meetings with organizational leadership, a framed photo of the space and/or its users, and more. Capital campaign donors will hopefully continue to give generously to your institution long into the future, and so the deployment of time, energy and resources to their stewardship is a wise investment.

The development of a stewardship plan by individual (as opposed to giving level) is a plan to pay special attention to those at both the highest levels of giving to your campaign as well as those who have the potential to give generously into the future. The organization’s lay and professional leadership should jointly determine who would benefit most from this type of a highly individualized plan, which typically consists of a calendar of moves customized for each donor based on personal preferences, passions, interests and relationships within the organization. It will include not only the benefits they receive based on their giving level, but also additional one-on-one interactions and communications. Again, this plan is typically developed for the organization’s top 20 – 25 capital campaign donors, but it is important to commit to doing this well (and consistently), so if the organization can only manage a list of 10 donors for this plan, that’s ok -- be realistic about your capacity to steward.

We have included a sample gift agreement as your freebie this week, so feel free to take a look if this is your first time developing such a document. And stay tuned next week for a discussion about preparing your donors for the ask – the art of cultivation. Here’s to a successful New Year for you and your organization!