Every nonprofit professional should know the fundraising cycle to include board members. Knowing the cycle reduces resistance by helping board members move past the idea that fundraising equals asking for money.
Knowing the 5 steps of the cycle will help your organization increase its fundraising capacity and strengthen its donor relationships.
Here is a breakdown of each step and some suggested best practices:
- Identify: Who will you ask? You need to assemble a list much larger than the number of donors you really need. The best way to identify potential donors is to check your database. Hopefully, you have a database with donor history going back at least two or three years. If you don’t have an “official” donor database, don’t worry. Although Excel is a spreadsheet and not a database I used it for years. You are looking for your largest donors cumulatively and your most loyal donors. These donors are going to be your best individual giving prospects. They already have an affinity for the organization and are showing it by donating money.
Best Practice: Secure a CRM system to track donors. It will be easy to run a report on giving history, amounts, etc. There are a few FREE CRM systems for nonprofits. For example, Bloomerang offers a lite version for up to 250 donors. Once you secure your system you must keep it updated. You should update your donor database to include each interaction you’ve had with your donors. This will ensure you can personalize your outreach and understand what topics have already been covered with them. Keeping everyone at your nonprofit on the same page is key!
- Qualifying: Does the donor have the ability to make a significant gift to your organization and are they inclined to do so? It is important to remember that donors do not give because your organization needs money. They give to satisfy their own needs. The qualifying phase seeks to discover this satisfaction step. Therefore, the qualifying phase should be focused on gathering information on your prospect and not focused on providing information to your prospect. To qualify donors well, you must ask good questions and actively listen.
Best Practice: Sources of major donor prospect information can include:
- Their past giving history – with your organization and with other organizations.
- Peer screening activities in which others who know the prospect provide confidential insights into their financial capacity and interests.
- General news about the prospect in magazines, newspapers, or generally read online resources.
- Specific prospect research tools and online databases such as wealth screenings.
- Discovery phone calls and visits with the prospect.
- Cultivation: You must start to build relationships with the individuals on your list. It is true what they say, “people give to people.” Donors want to trust and like the individuals at the organizations they support. Cultivation is about building relationships before asking for money. You cannot skip this step. Cultivation can take anywhere from six to 12 months and is about 60% of the fundraising cycle.
Best Practice: You must, even if you already know the people on the list, create a plan for each of the individuals. The plan should be strategic and customized for everyone. Check out the blog post The Top Six ways a Nonprofit can Cultivate Donors to develop your plan.
- Solicitation: This is when you make a compelling request for support ask for a specific donation. Solicitation can be peer-to-peer giving, direct mail, events, face-to-face ask, etc. 5% of your time is spent in this phase.
Best Practice: You should always do major gifts ask as face-to-face. When you’re ready to begin asking your prospects for major gifts call and schedule an “ask meetings” with each of them. When you schedule your meeting make sure you are honest. Let them know you would like to discuss how they can invest in your organization in a bigger and more meaningful way. It should be no secret why you’re coming. When you go on the “ask meeting” it always better to have two people attend, a staff member who can answer program questions and a board member who lends credibility to the process. It is important that whoever attends prepares and practices before the meeting.
- Stewardship: This is when you extend gratitude and acknowledgment to the donor. How will you thank your donors so that they understand the impact they’ve made on your organization? It is important that you offer thanks, so donors want to give again and again and again. 85% of donors do not give a repeat gift because they did not receive a thank you.
Best Practice: The golden rule is to thank a donor within 24 hours of receiving a gift. How do you accomplish that? Here are a few tips:
- At the end of each board meeting have board members write thank you cards and sign them. Do not address them to anyone. Collect them and have a stockpile on your desk. When the gift comes in add the name sign your name and send them off.
- Recruit a group of board members willing to make a few thank you phone calls on a regular basis.
- Have board members host an annual donor thank-a-thon at a designated board meeting.
I hope this helps. Let me know. Sharing is caring.
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