It's the cycle of donor life, and it moves us all through despair and hope, through recurring giving and long-term partnerships. Hm. Well, it seems that we're not the most brilliant lyricists. However, we are fundraising movers and shakers, and today, we're breaking down anything and everything you need to know about the donor cycle. So, how do you move someone from potential donor to first-time donor to full-fledged lifelong partner?
What is the donor cycle?
The donor cycle is the process of identifying, engaging, and retaining donors for nonprofit organizations. It is broken into several key stages and emphasizes the importance of long-term relationships with donors by viewing them cyclically rather than as a series of one-off interactions.
What is the donor management life cycle?
The donor management life cycle is another name for the donor cycle. It's also known as the donor lifecycle, the donor engagement cycle, and the donor cultivation cycle. Yes, you can debate the subtleties of each term, but basically, these all refer to the process of identifying, engaging, and retaining donors.
Why is the donor lifecycle important to nonprofits?
Donor databases are crucial fundraising tools, but sometimes, it's easy for donors to become tidy numbers rather than nuanced people. We care about the donor lifecycle because it provides a structured framework to maintain and strengthen donor relationships by viewing each one as an ongoing process instead of a transaction. Specifically, the donor lifecycle is important for nonprofit organizations because it:
- Emphasizes strong relationships, which leads to ...
- Increased donor retention, which leads to ...
- A more sustainable organization, which means ...
- More reliable revenue streams, which is ...
- Cost-effective for the nonprofit organization, so you have ...
- Loyal donors who want to stick around and support your ...
- Long-term vision, so you can thrive for years to come.
So, yeah, the donor lifecycle is pretty important for nonprofits.
What are the stages of the donor life cycle?
While there isn't widespread agreement on the number of stages or the Official Names, we like to break the donor lifecycle into the following four stages:
- Identification and research
- Stewardship and upgrade
Identification and research
First things first: you need to identify potential donors to create a donor pipeline. Maybe you research individual donors online and follow up accordingly, maybe you launch a peer-to-peer campaign, or perhaps you attend networking events and conferences. The point is you're gathering information strategically and making a list of prospective donors. Then, you're going to put that donor management software to work tracking every donor interaction, preference, and relationship. Now, you can move on to ...
You have a potential donor list; now, you need to take all those donor prospects and start building relationships with them. Update them on your organization's awe-inspiring, world-changing work by sharing your latest blog post. Let them know how far their gifts will go by sending them your annual report. Invite them to special events and send exquisitely personalized communication so they start to feel like a member of your delightful community. Once the cultivation stage has wrapped up, you can move on to the ...
This is it. You've worked that donor cultivation process, building a strong donor relationship as a foundation for soliciting a gift. Now, it's time to make your move. You can ask via direct appeals, or you can schedule one-on-one meetings. Email, text, phone, or telepathy: the choice is yours. (But if you can use telepathy, maybe set your sights a bit higher?) And once you've done the deed, it's time for ...
Stewardship and upgrade
Donor acquisition ... check! But once you've completed the fundraising cycle with that first donation, your job is only beginning. You want every one-time donor to become a long-term partner, and the key to success lies in a solid donor stewardship plan. To enter the retention phase, continually engage with your current donors by acknowledging the generosity of their initial gift and sending regular updates. As time goes on, your stewardship strategy should evolve to upgrade these donors to major donors and/or deepen their involvement with your cause.
Nonprofit donor cycle best practices
Sounds like a plan! But how can you make the most of this structured fundraising approach? With a keen eye toward the following:
If you want to bring as many donors as possible into the fold and maximize giving, you need to reach out strategically and regularly. Develop a clear timeline for cultivating and engaging with donors at all levels based on your organizational goals and any fundraising campaigns. Then, personalize that plan for each type of donor (and based on individual donor preferences, if you have the capacity). Some folks love a bi-weekly email; others prefer a phone call every November.
Not all donors are the same, so your donor cycle will look different for different groups. For targeted fundraising efforts and personalized communication, donor segmentation is your key to success. Segment your donor base according to factors like giving history, motivations, preferences, and demographics. Then, tailor your outreach and appeals to each segment, ensuring your donor cultivation cycle is personalized and your asks are appropriate.1
Donor lifecycle management begins by understanding your data and making it work for you. Data-based insights should guide your fundraising efforts, from sending relevant communications to identifying potential major donors.
There's no such thing as a successful donor cultivation cycle if the actual giving experience is clunky. Online and offline, the donation process needs to be seamless so that you can keep that cycle running smoothly. Your website needs to be user-friendly, mobile-responsive, and intuitive. Accessibility means an easy donor journey for everyone, everywhere.
Nothing disrupts a silky smooth donor engagement cycle more abruptly than a security breach. Make sure your donors can rest (and give) easy knowing that their personal data is safe and sound. At the same time, a big part of earning their trust is being transparent and accountable, so let them lead the way in how you use their information.
Don't forget the importance of inclusivity in your identification and research. Cast a wide net, looking for donors with diverse backgrounds and experiences. While numbers don't lie, they don't tell the full story; if you want to complete (and repeat) the donor lifecycle for as many donors as possible, you need to craft an inclusive fundraising strategy and donor journey.
Donor Engagement Strategies 101: the best way to build stronger relationships and up your donor retention rate is through personalized cultivation efforts and engagement opportunities. We're talking about a personalized donor experience, including customized donation amounts, tailored communications, regular updates, and opportunities for further involvement based on the individual donor's history and preferences. Finally, don't forget that a personalized experience begins with a personal touch. Reach the next level of engagement with a phone call or in-person meeting. Or have you considered leaving a message (no need to wait for the beep)?1
Essential donor cycle assets
Once the donor cycle gets rolling, it just keeps going, and that's why you need to have a variety of assets on hand to ensure you're ready for anything with each and every donor. Here are some suggestions to get you started.
At every stage of the cycle, you need to communicate, and these days, that means emails. Get your email list in order, then get prospective donors signed up for your email newsletter, e-invite them to your upcoming event, and share an impact story or five. Once you've reached the retention phase, regular communication is key.
Of course, everyone has their own communication preferences, so do your best to honor them. Especially at the cultivation stage, try to meet donors wherever they are. For many, it's in the mailbox, holding a beautifully printed annual report or invitation to an exclusive event.
Your website is your biggest fan and greatest supporter when it comes to online donor stewardship, so make sure it's in tip-top shape. That means plenty of readable, need-to-know information, easy-as-pie donation forms, clear and clickable calls to action, and a generally positive experience for anyone using the site. Remember: they're ALL potential donors!
Social media posts
Many donors begin as casual scrollers, so get those social media channels in order. Use all the social media platforms (yep, that means TikTok, too, if you're working that younger generation!) to share impact stories, boost awareness, spread the word about fundraising events, and educate your followers.
Video converts, and that makes it a vital tool in your donor experience toolkit. Use video to weave a compelling story for potential donors and current donors alike, boosting engagement and creating that crucial emotional connection.
Recurring donor program
If you want a rinse-and-repeat fundraising cycle, you want a strong program for monthly donors. A recurring giving program makes your job that much easier, creating an organic cycle of consistent communication and engagement throughout the donor lifetime.
When it comes to donor cultivation strategies, remember that donor cycles aren't one size fits all, and that means you can (and should) ask for time as well as money. Some donors bring wealth to the relationship, while others bring a wealth of experience, and everyone can benefit from the opportunity to build a deeper relationship with your organization.1
Thank you communications
Genuine gratitude is your greatest asset when it comes to the donor engagement cycle. You can keep it basic, including a brief but heartfelt note of appreciation with each donation receipt, or you can go big, hosting a donor appreciation event. You can also go public with your appreciation, listing donors in your monthly newsletter or featuring major gift donors on a donor wall in your lobby. The point is to say thank you often and mean it.
Donors want impact, and that makes impact reports and annual reports your BFF when it comes to the acquisition phase. Show would-be and current donors that they're getting a great return on investment by sharing your tangible successes as well as your goals for the future.
Who to involve in the donor engagement cycle
If the donor engagement cycle sounds like a pretty big job, that's because it is. That means you need all hands on deck when it comes to donor identification, cultivation, and effective stewardship. Here's who to involve and how.
Your board of directors plays an essential role in the donor cycle, with their impressive networks and many business affiliations. They can leverage their networks to grow your donor pool, identifying potential donors and facilitating introductions. After the identification stage, they can help with donor engagement efforts as well as stewardship, sharing their passion for the cause.
The ED or CEO is the face of your nonprofit organization, and as such, they're often involved in high-level donor cultivation, particularly for major gifts. After a potential major donor makes their first gift, consider getting executive leadership involved to ensure effective stewardship. They can speak directly to your mission and vision.
Let's hear it for your development team, who manage the day-to-day of the donor engagement cycle. They do it all: identifying potential donors, building a donor pipeline, creating a donor engagement plan, and carefully cultivating those relationships until the time is right to ask for a gift. When it comes to the donor cycle, they're your superstars at every stage.
Marketing is a wonderful source of support for the donor engagement cycle, creating compelling content that resonates, converts, and upgrades. Successful marketing efforts can help with cultivation and stewardship by engaging potential donors through effective storytelling across various communication channels, including digital marketing and social media.
While development is about your organization's relationship with donors, fundraising is all about that bottom line. When it comes to the fundraising cycle, your fundraising team knows what's up, down, and sideways, so be sure to involve them in executing fundraising campaigns and events as part of the donor engagement cycle. Additionally, fundraising team members often work directly with donors during the solicitation and stewardship stages.
How can technology help with the donor cycle?
With an amazing team to facilitate a smooth donor cycle, you're well on your way to donor lifecycle success. But you know what can the process even more effective? A little help from technology.
AI can help facilitate a smooth and personalized donor experience in a variety of ways. In the identification stage, it can analyze data to create a donor pipeline of prospects who are more likely to give, segmenting prospects based on their giving history and behavior. It can also personalize appeals and other communications, which boosts donor engagement and donor conversion rates. If you're not sure where to start with AI, may we suggest AppealAI? It takes sooo much stress out of the solicitation stage!
The right fundraising software streamlines the donation process with secure and effective online donation forms and efficient payment processing. A robust solution like Funraise also provides a variety of tools to support successful fundraising campaigns, track and utilize donor information, organize fundraising events, and uncover data-based insights.
Donor relationship management is at the heart of a seamless donor cycle, making your CRM a must-have tool in your technology arsenal. Within your CRM, you can manage workflows and jot down all those donor details, creating donor segments to help with personalized communications and improved stewardship.
Your donors want to know what you're doing with their donations and what's going on with your organization. With advanced data reports, you can organize your data however you want and share the results with anyone who wants to see them.
Whether it's an automated email series or a text-to-give campaign, digital communications are one of the best ways to connect with your future and current donor base. Use the technology to make your life easier and meet donors wherever they are, ensuring continued connection to your cause.
And with that, the wheels on the donor cycle can go round and round for years to come. Time to get all your riders on board!
Nonprofit donor lifecycle FAQ
What is the donor engagement process?
The donor engagement process is the structured approach a nonprofit organization takes to connecting with and cultivating donors. It is similar to the donor cycle but emphasizes how each stage leads to the next rather than the cyclical nature of donor engagement and stewardship.
How many stages are there in the donor cycle?
The number of stages varies based on the model but typically ranges from three to six phases. While the exact wording varies, these usually include some form of identification, cultivation, solicitation, and stewardship.
What is the donor funnel?
The donor funnel is a model related to the donor cycle that emphasizes five stages of the donor journey: awareness, consideration, conversion, loyalty, and advocacy.