Nonprofit organizations are far more than just groups struggling with financial issues. They are dedicated and driven by well-focused missions. Therefore, the donor cycle should foreground the organization’s strategic goals.
Running a nonprofit organization—which could be anything from a university to a local cat rescue—requires achieving a balance between identifying the right donors to approaching and asking them to give to the organization.
It also means understanding when and how to solicit gifts and knowing how much to ask for. In this article, we’ll discuss the complexities of the donor cycle and how nonprofits can manage them.
The Mission and Goals of a Non-Profit
Let’s start by saying that a nonprofit without a clear mission and goals is like… a nonprofit without stakeholders.
Stakeholders include those who work for a nonprofit (paid and volunteer), those who support it financially (private donors as well as publicly-funded agencies, institutions, grants or programs), and those who benefit from it.
Without knowing a nonprofit’s mission and goals, it’s hard for any of these to play their appropriate role. Or know how they might benefit it or benefit from it.
An Example: AARP
The AARP (American Association of Retired Persons) has the following mission: “to empower people to choose how they live as they age.” It’s stated simply but encompasses all that this renowned and expansive organization does.
Here are the AARP’s goals. These too are simply and clearly stated, yet encompassing.
For comparison, here’s the Smithsonian Institution’s mission statement: “The increase and diffusion of knowledge.”
Here’s the one for the USO: “The USO lifts the spirits of America’s troops and their families.” These and others can be found here.
When connecting with prospective donors, you want them to understand, value, and connect with your organization’s mission. You also want to remind them of it periodically through varied messaging.
Why? Because you don’t want them to lose contact with you or forget about your organization and the good it does.
How Non-Profits Raise Money
Raising money for a nonprofit should not be like throwing out seeds and waiting for them to grow. This would be the donor-solicitation equivalent of sending letters (or e-mails) and waiting for the envelopes with checks just to come flowing in.
Building and Cultivating Donor Relationships
Just like seeds, successful donor relationships need to be cultivated and cared for.
One nonprofit consultation business makes these recommendations:
- Tell your story. In other words, tell your prospective supporter how and why your organization came to be. Or if it’s a well-known organization, let them know your most current needs and how you hope to address those.
- Ask for a gift. Yes, you do need to ask. Connect the ask to something tangible if possible—for example, “your gift of $100 will allow us to have a kitten spayed/neutered and vaccinated. This way, the kitten will be ready to spend more time getting to know its new adoptive family.”
- Thank the donor. This is one thing you must do! A timely and warm-spirited thank-you note serves many purposes. It lets the donor know you got their gift, but it also builds trust and relationships, which are two keys to fundraising. Try to let the donor know briefly how the donation will be used.
- Continue to build the relationship. Donor relationships are ongoing. You must remain in contact and show you care about the donor. It’s not OK to just call them if and when your organization needs something.
Monitoring and Researching Your Fundraising Success
Some nonprofits have begun to use predictive analytics when planning donor outreach. It makes sense to rely on data your organization already gathers (or should gather) anyway.
“Most nonprofits… have donor information that often includes a wide array of demographic information, historical behavior information and information about how donors responded to past fundraising campaigns.”
Understanding a Donor Cycle
The term donor life cycle sounds a bit alarming. It would seem to suggest that there will be an end to a donor’s relationship with an organization. But this should never be the case—certainly not if the fundraisers are doing their jobs.
The way we like to explain the donor cycle is as something that tends to continue and repeat at intervals. One organization makes this point. They use the term donor life cycle, but otherwise capture the meaning we like.
Another organization says it’s a misconception to think of the donor life cycle as “a complete loop”. “Simply put, a lifecycle is a fiscal year-defined grouping of donors based on their prior giving behavior across several fiscal year periods.”
At the end of that cycle, the donor relationship should be refreshed and renewed. An interesting article uses fundraising cycle diagrams to explain this simple point very clearly.
It’s important to track the frequency, type, and amount(s) of your donors’ gifts so that you can time future solicitations appropriately.
There is a logic to using a fiscal year as the basis for tracking donor interactions too. A fiscal year in one organization roughly parallels fiscal years in general. This helps you avoid approaching donors at inappropriate or inconvenient times.
Further, adhering to established practices of donor stewardship can only help your organization meet its goals.
Thank You for Reading This
Yes, thank you! We say this to remind you that thanking donors and maintaining contact with them are critical parts of the donor cycle. Although all this takes time, it can pay off.
It also gives you the chance to meet and interact with some very interesting and influential people. At the same time, it allows you to do some serious good for your nonprofit organization. And that’s what you’re there for, isn’t it?
We hope you and your organization have benefited from this article. We hope even more that you’ll see some services on our website that your nonprofit organization can use. We’d be happy to help with pretty much anything you need!