You may not realize it, or perhaps you simply don’t know that it has a name, but you likely spend quite a bit of time focused on the donor lifecycle. It’s a basic fundraising principle that you have almost certainly (at least passively) participated in. But, gaining a deeper understanding of it in order to more explicitly and intentionally utilize the tools and ideas it offers may just be the simple, yet game-changing fundraising strategy your nonprofit needs.
What is the Donor Lifecycle?
The donor lifecycle “describes the way that nonprofit organizations engage with and view their donors from the start of their relationship (when they first learn about your organization) to when they give and beyond” (Kindful 2022). Essentially, it is a simple model that outlines the five phases of a donor:
- Identification
- Discovery
- Cultivation
- Solicitation
- Appreciation
Below, we’ll outline each phase of the process, what it entails, why it’s worth your time and focus, and how Atticus can help.
Phase 1: Identification
This phase is simple and exactly what it sounds like — identifying new donors for your organization. Thinking in terms of the cycle, this is the entry point.
Now, although the concept of identification is easy, you will likely find that to be less the case in practice. Identifying new donors, especially major donors, is difficult, but can’t be ignored. Though it doesn’t require much explanation, it is in some regards the most important and most difficult of the phases.
This is because without proper identification, the rest of the cycle becomes irrelevant. In order to engage the four other phases, you first need to identify the right people. This likely begs the question for you, “How then do I do that?” Don’t worry, we’ll get to that answer soon.
Phase 2: Discovery
In the discovery phase, you’re seeking to identify the interests and values of potential new donors, and how they may be connected to the mission of your nonprofit. Again, this requires little explanation.
In short, you want to understand why a new donor may be a good fit, and begin preparing your team for the best ways to connect with them. This could be discovering anything from shared hobbies and interests to their personal history that connects them to your organization.
For example, perhaps your nonprofit works to support children in the foster system. The discovery phase aims to identify things that could connect a future donor to your organization. In this example, for instance, it could be that the future donor was a part of the foster system as a child themself. Knowing this would create a clear connection to your mission and vision and make the eventual ask significantly less strenuous.
Phase 3: Cultivation
This is when you begin to engage with new prospects. You initiate a relationship (or perhaps they’ve initiated one with you, and this is where their cycle begins) and begin to involve them in your organization. This may entail educating them on your mission, vision, and values or inviting them into volunteer opportunities. Perhaps it’s strategic one-on-ones, inviting them to events, or utilizing strategic communication.
The point, though, is that you are beginning and then enhancing your relationship with potential new donors. You are working to strengthen alignment between them and your organization as the final step before phase four.
Phase 4: Solicitation
Now that you’ve identified and established a relationship with a potential new donor, it’s time to make the ask, or to “invite investment.”
On this topic, one author writes that this stage “involves many strategies, tailored to the individual donor or prospect. Regardless of strategy, when done well, inviting investment is not a ‘sales’ exchange but rather an exchange of values. Individuals feel that their gifts are natural extensions of their goals and interests and that they have been invited to participate because you know them well.” (ISM 2021).
When phases one through three have been done well, phase four becomes significantly easier. Like said above, the ask for a donor to give should feel natural at this point. In fact, rather than feeling like you’ve made an ask, they should feel like they’ve been extended an invitation — and one that has been given well because you’ve taken the steps to know them well.
Phase 5: Appreciation
Lastly, it’s important to recognize your donors and honor their generosity. For too many nonprofits, this phase goes by the wayside, but it truly is essential to long-term and continued success in your donor relationships. They must know and feel that their contributions made a difference. Just as you connected them to your mission, vision, and values as you got to know them and prepared to ask for a donation, it’s key that they now make a direct connection as to how their financial gift contributed to the organization they wanted to get involved with in the first place. Establishing and maintaining this connection with help solidify the long-term relationship and partnership, and therefore more donations beyond the initial one.
So, What’s Next?
Now that we’ve outlined each of the five phases, you may be thinking that this is something your organization already does. Or, you may be realizing that you have some gaps in your fundraising process. Either way, it never hurts to slow down, evaluate the way you’ve been doing things, and make adjustments for continued improvements.
And as you do so, consider allowing Atticus to help. Our technology is helpful for each of these phases, but particularly phase one and two as you are seeking to identify and learn about potential new major donors and wanting to steward your time, resources, and efforts well. Using our wealth of data, we’re able to not only surface net new donor prospects for your organization based on mission, vision, and values alignment, but we can also help you to create shared connections to the donor, whether that be through a shared person, an interest, or another organization. Before you get to the “ask” stage, you’ll feel confident that you have the right people in mind for your organization to partner with.
As long as you are a fundraiser, you’ll engage the donor lifecycle, whether consciously or subconsciously. So, why not make the most of it and make it as easy and effective for yourself and your organization as possible? Let Atticus join you in the process — we’re confident we can help fund your great endeavor.
