A fundraising cycle is a strategic approach to moving donors and potential donors along the different stages of fundraising to engage them closely with the nonprofit. The cycle is a powerful fundraising tool that helps develop a culture of philanthropy and serves as a foundation for all fundraising efforts. It helps increase commitment by donors, evaluates prospects at each stage, designs successful fundraising strategies, and motivates donors to increase giving and build loyalty.
Though each stage is listed separately and sequentially, activities in each stage are overlapping and mutually supportive. Let’s consider each stage in the cycle.
Identification: This step involves finding prospects and assessing prospects’ capacity, affinity, and propensity. Collect data on your current and potential donors, including their age, background, wealth indicators, giving histories, and interests. Use the data to qualify your potential donors’ ability and willingness to donate.
A nonprofit CRM is a powerful tool to organize the data and findings you gather at this stage. Additionally, identification and qualification within the CRM are possible through segmenting constituents by donations and demographics.
Cultivation: Though cultivation is the second stage in the cycle, cultivation activities are applicable in every stage. Core cultivation involves getting to know your donors by inviting them to events and engaging them in activities that interest them. Then, continue the engagement by seeking their feedback, opinions, and thoughts. Keeping track of your interactions with potential donors will help you personalize their future engagement activities.
Presolicitation: In this stage, analyze the compiled information and prepare for the final ask. Preparation includes finalizing the amount, the partners, the funding initiative, and the questions to prepare for the solicitation meeting. In addition, plan for open-ended questions so you can have engaging conversations and learn more about the prospect.
Solicitation: Thorough preparation and open communications are necessary for a successful solicitation. Now that you have built a solid relationship and have done all the groundwork, It’s time to ask for a donation. Devise plans for all probable outcomes.
Solicitation follow-up: It is essential to follow up after a solicitation, irrespective of the consequences of the meeting. Ensure that you respond pronto to questions or information the potential donor requested. Prep for all scenarios so you can deliver your response promptly.
Stewardship: Donor stewardship is the relationship-building process that starts after a donor makes a gift to your nonprofit. At this stage, you initiate stewarding the gift of the donor. An effective stewardship plan will improve donor retention, increase donor giving and build donor loyalty.At every stage in the cycle, you continue to build strong relationships with donors and provide opportunities for them to upgrade their contributions. Fundraising is an ongoing effort, and by focusing on the fundraising cycle, you can build lifelong relationships to support your mission and increase your social impact.