With over 1.5 million registered organizations in the United States, there is intense competition for every dollar donated. Your group requires an effective fundraising strategy to secure the necessary funding for your cause.
The six stages of the fundraising cycle might help you achieve fundraising success with planned and substantial gifts for your nonprofit.
What is the cycle of fundraising?
The fundraising cycle consists of six steps to find, engage, analyze, solicit, acknowledge, and steward your contributors and donor prospects. This coincides with the donor cultivation cycle, which focuses on establishing relationships with your donors.
The fundraising cycle can apply to entire donor segments, but it is significant in planned and major giving initiatives focusing on individual donors. Engaging contributors will ensure that an organization remains in its estate plans for bequests and will create chances for various non-cash gifts. A 2014 review of philanthropic contributions revealed that donors boost their average donations by more than $3,000 after committing to a legacy.
Following the fundraising, cycle requires constant engagement with contributors and prospects. After all, a significant portion of fundraising is built on relationship building, and all relationships require maintenance. The donor's initial contribution is not the end of your work; the cycle enables you to continue to engage the contributor and develop their connection to your cause.
Here are the phases of the cycle and how to maximize them for successful fundraising:
- Identification: Identifying your donors and potential customers.
To create a strong relationship with a donor or prospective donor, you must first get to know them. This contains basic demographic information such as age, gender identity, socioeconomic position, and location.
Nonetheless, you should delve deeper to determine the interests and values of planned and significant gift contributors. Your supporters believe in your cause, which is an excellent starting point. Learning more about what resonates with people, including the hows and whys of their love for your business, will make all the difference. You can accomplish this by sending surveys, collecting notes from one-on-one meetings and phone calls, and initiating text discussions.
Remember that this is a cycle, so you must return to this stage periodically. Priorities and values might shift over time, and you must continue connecting with your donors on the most important issues.
- Engagement: Recruit donors and prospects
Engagement builds donor relationships and increases understanding of prospects. This is where you demonstrate your knowledge to the donor. Your donors and prospects have communicated their values, interests, and priorities, and you must now convey this information to them.
Share resources, articles, and stories about the topics that matter most to your donors and prospects. Invite them to activities and events. Ask them to share their thoughts and opinions through a survey. Involve them in your social networks. If you still need to, meet them individually to learn more about them.
It is essential to note that solicitation is not permitted at this point. Do not beg for money or assistance. Utilize this time to bond over your shared interests and objectives, and make it evident that you are attentive and respect their input.
- Evaluating your donors and prospective donors
At the donor qualification step, you consider all the information you have about the donor or prospect and use it to direct your requests. The following information is extremely useful to remember: giving history, financial resources, involvement areas, and interests.
This is a fantastic opportunity to examine which types of donating may appeal most to your or prospective donor. Are they tech-savvy and interested in crypto? Are they considering the legacy they may leave? All of these factors should be considered before approaching a donor or prospect.
- Solicitation: Request money based on your knowledge
After laying the groundwork, it is now time to solicit assistance. Adapt your solicitation to the donor or prospect depending on the data acquired in the early phases of the fundraising process.
Remember that your donor's or prospect's gift reflects their values, interests, and objectives. If you know they have a specific area of interest, focus your solicitation efforts on that topic. Consider the appropriate channel or mix of channels for your solicitation, such as email, face-to-face meetings (either in person, virtually, or over the phone), or direct mail.
Ensure that it is simple for your donor or prospect to donate once you have asked them to do so. You can guide your donor through the procedure or direct them to pertinent information on your websites, such as brokerage details for stock gifts and language to include in their will.
- Appreciation: Acknowledge your donor's generosity
Never undervalue the impact of a sincere "thank you." This phase of the fundraising process is sometimes disregarded, but you must express gratitude to your donors. Whether a contributor gives $1,000 or $1 million, gratitude is essential to maintaining your relationship with them since it demonstrates your appreciation.
The contribution acceptance policy of your organization may include specific rules for thanking donors based on their donating level and method. For instance, a substantial donation may be acknowledged with a letter, phone call, in-person meeting, or a mix of these.
In any case, reaffirm your relationship in your acknowledgment and explain how the donor's contribution helps you achieve your shared objectives.
- Stewardship: Strengthen your relationships
At this stage, your donor should be pleased with the relationship. Your task now is to sustain this emotion. Create a donor stewardship plan to maintain your donor's engagement and involvement with your organization.
Recall the six stages of the fundraising cycle and your long-term relationship objectives as you maintain contact. You aim to make your contributors proud to be a part of your organization, which will result in increased donations.