Today, we will discuss the various things you should implement to strengthen your fundraising cycle. The fundraising cycle consists of the following steps:
These are similar to a sales cycle, but they require relationship development skills to nurture an ongoing relationship for the longevity of your nonprofit efforts. You’re not going for a one time “sale” as would be done in the for-profit world. You are looking to build trust, demonstrating your commitment to using their funding wisely, and providing evidence of effective accomplishment of your goals. Sales only require you to provide something for a buyer to benefit from as a result of a one-time purchase. Repeat purchases must occur to continue to obtain the same benefit. Donors are only benefiting by recognition and feeling as though they are part of something larger than themselves. Some nonprofits award with gifts to donors, but this is not mandatory. It’s very different.
The first step is always identification of the right candidates to engage in a conversation. This can include new potential donors or it can also include current donors who hold a larger potential.
New donors can be sourced from your community. Look for those who have demonstrated philanthropic behavior for other organizations. They can also be sourced from organizations that demonstrate an alignment with your work. Some corporate organizations encourage their employees to contribute to causes. Identify these companies and start a relationship so that they may include your organization on their employee contribution list. There are many ways you can achieve this, but start with ways in which you can have the largest outreach through simplified effort. Door to door is the hard way. Networking is the best way. Get involved in your community networking events with other businesses. This is the best way to develop strong relationships. You can pair this with studying the donor lists of other organizations. Informed networking is more constructive.
Don’t forget to look at the current donors in your donor list. One time donors can often be developed into recurring donors and potentially become major donors. Never neglect your current donor list.
After creating a list of potential donors, you need to qualify them. This requires further research. This may have been done as part of step one if you were identifying them based upon previous philanthropic behavior with your organization or others. At this step, you should also look into their capacity to give. This is called prospect research.
Prospect research can be done through researching their publicly available information. The two categories to focus on are wealth capacity and philanthropic history. Screening tools available through an effective donor relationship management system will include access to wealth prospecting databases.
These tools offer data such as:
- Property owned
- Stock shares owned
Philanthropic history would include:
- Donations to charitable organizations
- Volunteer behavior
- Political contributions and activity
Knowing what they support also helps to indicate if your organization is in alignment with their interests. Knowing if they have given $5,000 or more to any nonprofit also indicates a higher capacity to contribute than an average potential donor.
Once you have completed your prospect research, you are ready to move on to prospect cultivation. This involves developing a relationship with each prospect. It may sound daunting, but it is actually the most socially engaging. For those who love to be social, this can be fun.
This step can take six months or longer to develop an effective relationship. I discuss in length the best ways to develop your donor relationships in the chapter on Donor Stewardship.
The most important factor in this segment is working in coordination with the rest of your team to ensure all are on the same page with next steps with each potential donor. This is where effective donor management systems can keep your team on target and informed.
The next step is ensuring the solicitation delivery to each prospect is perfect for them. Once you know your donor well, you should already know what appeals to them, how engaged they are, and the potential they hold to contribute. Do not mistake potential with your grand need. Never ask for the largest amount possible and chase them away. If you did your prospecting well, you should know their behavior. Ask within the realm of their already predictable behavior. This also demonstrates to them that you genuinely understand them. Those who see a wealthy person and drop a large ask are often seen as sloppy and irresponsible.
Another thing to consider is if you still want them after you have learned more about them. How will they be involved in your organization and is that detrimental to your long-term goals? Never dismiss their motivation for contribution. Not all donations are the same. Some money comes with strings. Be sure that you aren’t compromising your goals just for a donation. Also, be sure you aren’t putting your organization at risk by accepting a donation from anyone who may ultimately stain your organization’s reputation.
After you are confident that you are in alignment, you want their involvement, and they are interested, be sure to ask at the right time with the right ask. This is why personalization is critical. Generic requests are not appropriate here. You also must offer them time to consider. Do not expect an immediate reply.
What to send your potential donor
- A personal letter including information gathered about them and your alignment
- Marketing materials about organizational plans
- Annual reports and other financial documents
It isn’t much different from a grant request, except they don’t tell you what they expect. You have to anticipate what they need. The best way to do that is to treat it as a grant request would be prepared. The only difference is that you will be focusing more on them as a person rather than more information about your organization. Foundations need more information about you. Donors want you to know them. Know the difference.
After the donation is received, the effort is not over. You have to maintain the relationship that you have cultivated. This includes appreciation. Recognition for their contribution is one of the most important aspects to remember. Not all donors like to receive appreciation in the same manner.
Know the difference between private and public recognition and what suits your donor best. Some want the public recognition. It may impact their business and it may be something they are needing for their own political goals or community involvement. Demonstration of good work in the community can be a key component that motivated their donation.
Private appreciation is truly necessary for all donors. The deeper connection and demonstration of genuine appreciation is always important in solidifying and maintaining a healthy and continuous relationship. This may even include periodic notes or cards throughout the year. Invitations to events, and many other suggestions for public and private appreciation can also be found on the Donor Stewardship Chapter.