Did you know that a once-retained donor is likely to remain loyal to your cause long after that initial gift is made?

In fact, the Fundraising Effectiveness Project found that while 19% of first-time donors are retained, 63% of repeat donors are retained, meaning that nonprofits are far more likely to retain a donor that has already given before. And boy, do we all work hard for those new donors!

The fact that retained donors remain so loyal is great news for nonprofits because we can always count on them to give. But, how do we create a loyal donor? What factors encourage donor retention? While there are many ways to increase retention rates, let’s talk about the importance of transparency in driving donor loyalty.

What is transparency? Well, you wouldn’t want to give to an organization that spends 50% of their donations on break room snacks, would you? You expect that donations that you give go toward helping those that the nonprofit serves. And your donors want to know the same thing. All nonprofits must be honest about where the dollars actually go and report that information. Yes, we think of transparency as just being about financials, and although this is important, overall transparency involves a whole lot more. Being transparent means that your organization is willing and able to distribute critical data about all aspects of your operations.

By being transparent, nonprofits are able to show donors that they have sound ethics and are responsible with donations, thus encouraging donor loyalty.

Is your nonprofit already transparent? I bet you’ve probably have been doing some, if not all of these steps to show transparency already, such as:

• Publishing the IRS Form 990 on your website
• Distributing an annual report detailing impact, client stories, and basic financials.
• Keeping your information on Charity Navigator and Guidestar up-to-date
• Getting the endorsement of a public figure in your community, as well as the Better Business Bureau
• Listing the names and roles of your board of directors directly on your website
• Regularly updating your donors on program results through email, direct mail, your website, or even social media

Here’s why transparency drives donor loyalty:

As in all relationships, the relationship between donors and fundraisers all boils down to trust. If your donors trust you and believe that your nonprofit is forthcoming and authentic, then they’ll be more likely to stay involved and give donations down the road. But it’s up to you to give them the information they need to establish that trust.

When push comes to shove, donors are looking to find a cause that they connect with, and that connection is often created because of shared values. Shared values, such as strong ethics, honesty, fiscal responsibility, and the propensity for collaboration are all evident when a nonprofit is transparent.

Show your donors that you believe in what they believe in through transparency and you’re bound to convert your one-time contributors into loyal and engaged donors.

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Below is an overview to using grants, and you can read the full guide by visiting our free guide to grants for online fundraising.

Why you need to look for grants.

Let’s talk basics.

In general, there are three big reasons why you should pursue grants for your organization:

1. They help your nonprofit grow.

As a growing nonprofit, you have a range of funding needs. Generating support from different sources can both help grow your revenue overall, and provide different pools of funding to support different efforts within your nonprofit.

Grants can range in size from a few hundred dollars to millions of dollars, depending on the source, type, and purpose of the grant.

2. They help you reduce risk.

Just like balancing your retirement fund, having different types of donations can help you reduce risk.

If you rely too heavily on one source of funding, and that source of support disappears, you can end up in dire financial straits.

3. They can come in large sums.

While some grants are small, grants are typically larger sums of money than most individual donations.

A grant can be tens of thousands of dollars — or even millions! Grants can also be awarded over a period of years (e.g., $60,000 over 3 years, which results in $20,000 going to the nonprofit per year), and can be helpful in making a larger investment in a specific program.

Three methods in using grants for online fundraising

Even though the primary purpose of grants is to help your organization grow, they can be used to increase your online fundraising results too.

Let’s walk through three common methods of using grants for online fundraising.

Method 1: Donation matching

One of the proven ways to instantly get more online donations is to use a matching grant as an incentive. Nonprofits typically structure a campaign by saying a foundation will match donations up to a certain limit or the grant will only be made if individual donations exceed a certain goal.

Case: The Adventure Project World Water Day Campaign

The Adventure Project (TAP) received a pledge from the Prem Wat Foundation to provide a grant of $10,000 if TAP was able to raise $10,000 online for World Water Day. The matching grant spurred donors and personal fundraisers to action. TAP exceeded their fundraising goal in 24 hours.

Method 2: Capacity building

The more equipped a nonprofit’s staff is, then the more they will be able to create a social impact. Grants can be used to fund training in online fundraising as well as fundraising consulting services from an experienced professional.

Case: Restore NYC Brick by Brick Campaign

Restore NYC received a $70,000 pledge from a major donor if they were able to raise $50,000 online through new donors. Within 40 days, Restore NYC exceeded their goal. Some donors even created their own matching donations on their personal fundraising page.

Method 3: Social proof

Donors want to make sure that their donation is going to a trustworthy and credible nonprofit. The indirect benefit of receiving a grant is that your organization is validated and proven trustworthy.

With a grant, you have the ability to say that professionals and large funders have reviewed you.

Getting started with grant proposals

Writing effective grant proposals is both an art and a science. Here are a few tips to help get you started.

1. Understand funder requirements
2. Gather content about your nonprofit
3. Write compelling prose
4. Produce tight financials
5. Proofread!

You can read more about grants by visiting our free comprehensive guide to grants for online fundraising.

Dahna Goldstein contributed to this article. She is the Founder and CEO of Philantech and was named one of BusinessWeek’s 25 Most Promising Social Entrepreneurs.

The post How To Use Grants For Nonprofit Growth And Online Fundraising appeared first on Bloomerang.