Nonprofits regularly live with a high level of uncertainty and financial stress. However, nothing in the history of our civil society rivals this moment, when federal grants are being frozen and canceled without warning. Thousands of nonprofit organizations are reeling from the loss of grants that were a fundamental part of their budgets; the Urban Institute estimates that 67 percent of nonprofits are at great financial risk.
Many nonprofits will now turn to everyday donors, people giving less than $500, to try to make up for the shortfall. Asking a lot of people for money online is easy. However, just asking for donations over and over again will not create a sustainable revenue stream for your organization.
The heart of the problem is that acquiring new donors is expensive: You have to rent lists, create content, pay for mailing software. And the return is very low — say, 3 percent of the people who receive a solicitation will make a donation. The real problem, though, is that those new donors do not continue to give. The average donor retention rate from the first year of giving to the second year is 19 percent.
In short, the cost of this “spray and pray” approach is high, the response rates are low, and the result is a transactional style of fundraising as organizations panic and keep sending one-size-fits-all requests.
The clearest indicator for how donors feel about these practices? Twenty percent fewer people give to a cause today than in 2000. Donors are telling us they don’t like nonstop solicitations, but organizations caught in the hamster wheel of transactional fundraising are both terrified of stopping and unaware of an alternative.
There is a different way of treating everyday donors: relational fundraising at scale.
Relational fundraising isn’t new. Fundraisers have always treated major donors well. They send personal updates, write handwritten thank you notes, and take them to lunch. It’s the last part — “at scale”— that’s new.
There is a different way of treating everyday donors: relational fundraising at scale.
Relational fundraising at scale prioritizes genuine connection and communications over efficiency. It enables organizations to build relationships with donors at every level and make each one feel like a million bucks. This approach recognizes donors as more than financial supporters; they are potential advocates, ambassadors, and collaborators.
Relational fundraising at scale is a new set of habits and norms. It is made possible with the responsible use of artificial intelligence tools.
It may seem counterintuitive, but when used responsibly, AI can make fundraising more personal, not less. AI can:
- Customize outreach based on donor preferences and history
- Ensure timely, thoughtful communication
- Free up staff time to engage in real conversations with donors
The responsible use of AI assumes that people are always in charge of the technology and that a system is created whereby the technology does what it does best — looks for patterns and makes predictions based on a lot of data — and people do what we do best — build relationships, solve problems, create communities.
The pivot to relational fundraising at scale involves three steps: mindset, reset, and practice.
Mindset. Organizational leadership is required to prioritize relational fundraising and stop doing things that may still appear to be “successful.” Money still comes in from direct mail but at a huge cost. In addition to the considerable direct costs and low returns, there is the opportunity cost of not spending this time and money building relationships with potential and current donors.
It may seem counterintuitive, but when used responsibly, AI can make fundraising more personal, not less.
Being relational means sharing stories with donors and asking them what they think and want rather than making assumptions and broadcasting messages at them. Think of the difference between looking at open rates alone to determine the success of an impact report versus using the data and asking a sample of donors whether they read the reports and want this kind of information.
A new fundraising mindset also embraces experimentation as a way to learn how to engage with donors in more meaningful ways.
GiveDirectly, a nonprofit that provides unconditional cash transfers to families in dire need, recently tried an experiment in relational fundraising. Their emergency response campaign after the L.A. wildfires in January 2025 was enormously successful. They raised more than $2 million to support families displaced by the fires. Then, instead of sending out another solicitation, GiveDirectly traced donations to specific ZIP codes and reported to donors exactly where their donations went. The response from donors was immediate and heartfelt:
“This email was amazing! I practically cried when I read about specific individuals and families receiving cash money in short order (quickly). Thank you to whomever created this email and thank you to GiveDirectly. Keep up the good work!
Reset. After centering the interests and needs of donors, organizations must rethink their fundraising.
The reset begins in the boardroom. Boards often drive transactional fundraising because of their focus on “cash-in-the-door.” Instead, organizations should be laser-focused on donor-retention rates. How many donors made a second gift? Why? The second question requires asking donors why they renewed, a habit that will be new to most organizations.
Being relational means sharing stories with donors and asking them what they think and want rather than making assumptions and broadcasting messages at them.
There are a host of qualitative measures organizations can use to assess their “stickiness” with donors, but there is one simple question that all organizations should be asking: How do we make you feel as a donor?
Practice. Becoming relational fundraisers requires practice. Organizations need to get in the habit of asking donors before acting. They need to learn how to speak “with” them, not “at” them. It requires holding the financial panic at bay and not asking for donations as often. And it means potentially hearing that donors do not like your current communications or don’t find your efforts compelling enough to give again.
It is also going to take practice learning how to use AI to personalize fundraising efforts.
One organization fighting to end hunger among people of all faiths and backgrounds, Mazon: A Jewish Response to Hunger, worked with Dataro, a company that uses AI and business intelligence to aid fundraising. Together they used AI to better personalize appeals to their 30,000-plus donors and identify the right messages at the right time to activate them.
In their first campaign, revenue went up 23 percent year-over-year despite sending 10 percent fewer letters. Compared with previous appeals, more donors gave, and the average gift size increased by 21 percent.
Every.org, the nonprofit I lead, has just released a Relational Fundraising Playbook. In it, we outline the kinds of relational fundraising practices to begin right now. Here are a few:
Home in on your “why.” Every organization has a “why,” but the leaky bucket creates an internal cacophony where the why is often drowned out in favor of the “how.” The “how” creates fundraising appeals that are about the organization’s needs, such as furniture, computers, or additional staff, rather than the donors’ interests. Yes, these are real needs, but they aren’t compelling reasons for donors to give. There is a compelling, emotional story somewhere in your organization, a foundational one, that you need to tell over and over again. This is a story that your supporters will tell other people. You can build on it over time, but this is the foundation for creating stickiness with donors that goes far beyond what you need. Generative AI tools like ChatGPT can be a huge help in turning data and processes into stories. Charity:water follows this discipline religiously. In the middle of the organization’s home page is the question, “Why water?”
Thank donors at scale. Everyone wants a genuine thank you for their contribution. Tools like Loom can be used to create personalized video thank you messages for donors, especially first-time donors or major gift donors. AI can be used to customize thank you messages online for donors. Plus, organizations can also ask volunteers, particularly board members, to pick up the phone and thank donors. One organization we have trained uses the hour before board meetings to have board members call individual donors and thank them for their donations. This is a terrific task for volunteers who are uncomfortable asking for donations.
There is one simple question that all organizations should be asking: How do we make you feel as a donor?
Call 10 donors a month. That’s it. Just randomly call 10 everyday donors each month and ask them how they are, why they give to your organization, how they are made to feel as donors, and what kind of communication they want from your nonprofit in the future. There is no substitute for development staff speaking directly to donors.
In your annual fundraising plan, replace five solicitations with stories. Stop asking for money in every communication. Stop using every event, news story, or communication to raise money. No one wants to be asked all the time. People want great stories; compelling stories stick with people and are easy to share with others. Providing a laundry list of your needs is not the same as telling a story about the difference you’re making in the world.
Create giving circles. Giving circles are groups of people who share an interest in supporting a cause or multiple causes. Grapevine is an online platform that enables individuals to create their own giving circles in minutes. It also provides step-by-step instructions for nonprofits to create local giving circles for their supporters. Circle members can get to know one another, share their passion for the cause, and match each other’s donations.
Nonprofits also can create online communities that foster real connections among supporters through platforms such as Mighty Networks, which fosters connections and conversations among donors.
Focus on sustainers. Donors who give to your organization on a regular basis — say, monthly — are your greatest source of organizational stability, no matter the size of the donation. Regular giving enables organizations to make long-term plans. Every.org makes it easy for organizations to ask for recurring donations. For example, the Zig Software Foundation, dedicated to promoting and protecting the Zig programming language, hosted a fundraising campaign on Every.org in 2024 asking donors to become monthly sustainers. It quickly raised more than $65,000. But these donors have pledged to continue giving over and again, providing an ongoing source of income for the organization.
Personalize donor appeals by using predictive analytics built into AI-powered fundraising software. DonorsChoose.org, an online crowdfunding platform for teachers, has implemented AI to better match teachers’ project proposals with potential donors. Using machine learning algorithms, the platform analyzes project descriptions, donor preferences, and donation history to give personalized project recommendations to donors. This AI-driven matching system has increased the efficiency and effectiveness of fundraising for educational initiatives.
Optimize messaging and timing. AI-driven email marketing tools can analyze donor interaction patterns to determine the optimal times to send appeals. Increasingly, these tools are incorporated into general fundraising software. UNICEF used AI to refine messaging for different cultural contexts. The system identified various languages and imagery that resonated with individual donors to create a more personalized experience that increased donations overseas.
A core group of donors who support your organization can be turned into ambassadors and fundraisers on your behalf.
Use AI chatbots for donor engagement. Nonprofits like the Children’s Miracle Network use AI chatbots to provide real-time interaction with donors and supporters. These bots answer FAQs, assist with donations, and share personalized impact stories, freeing up staff to focus on high-priority tasks. The Trevor Project uses bots to train volunteer counselors. Please note that these bots do not replace fundraising staff; they provide real-time assistance any time to donors and augment in-person touches by development staff.
Use predictive analytics for donor retention. Predictive analytics tools analyze donor databases to identify supporters at risk of lapsing. More and more fundraising customer relationship management (CRM) software products are integrating predictive analytics features into their CRMs, or you can use standalone apps from companies like Dataro, BoodleBox, and Kindsight. Wesleyan University created an alumni platform for engagement, communication, and donor cultivation with Gravyty, a software product that uses AI to craft targeted communications for nonprofits. In just one year, Wesleyan’s alumni platform welcomed more than 1,800 new users. Of these new users 74 percent have returned to the platform, consistently engaging with the university, other alumni, and current students.
Spread out the work. A core group of donors who support your organization can be turned into ambassadors and fundraisers on your behalf. They have their own networks of friends and potential donors they can approach, saving your organization an enormous amount of time and money. For example, board members of the Washington Heights Community Choir create fundraising campaigns on Every.org every year. All of the members can see each other’s fundraising efforts, creating a sense of community and accountability among board members.
To move beyond transactional interactions with donors, organizations need to rethink every part of their development practices. This shift requires a change in mindset, a willingness to experiment, and a commitment to prioritizing donor needs and feedback.
By focusing on storytelling, personalized communication, and genuine engagement, nonprofits can build stronger relationships that lead to increased donor retention and long-term sustainability.
While integrating AI can enhance these efforts, it’s crucial to maintain a human-centered approach, ensuring technology serves to amplify, not replace, genuine human connection.
Ultimately, the journey toward relational fundraising is an ongoing process of learning, adaptation, and perseverance, but the rewards of building a truly engaged and supportive donor community are well worth the effort. In the end, organizations will retain more donors and have a reliable source of financial support to weather the storms ahead.
