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The Donor Cultivation Cycle: A 5-Step Guide

12 min read
September 20, 2022
Alex Huntsberger
a small blonde child standing in a water garden watering the plants with a large metal watering can

Finding and cultivating new donors for your nonprofit can be laborious and time-intensive. By breaking it down into a strategic process, your fundraising team can gain a better handle on your donor management needs. 

That’s where the donor cultivation cycle comes in; it’s a five-step program that provides a broad outline you can follow to find, engage, and retain new donors. As the name implies, this process never really ends; it only repeats. The same principles that hold true for new donors can also encourage existing donors to increase their giving.

Let’s dig into each step of the donor cultivation cycle and learn how it works!

Step One: Identification

In order to cultivate donors, you first have to find them. “Identification” is the step in the donor cultivation cycle wherein you build a list of potential new donors for your nonprofit.

In order to identify potential donors, you should start by looking at your organization’s programs. Different types of donors will be drawn to different types of programming. One person might want to give to support a food pantry, while the other might want to support drug and alcohol recovery services.

Taking time to understand each of your organization’s programs and service offerings will help you start identifying groups of people who would be interested in supporting them.

A great place to start looking for new donors is from within your current supporters. Pull up your list of event and class attendees and frequent volunteers. Don’t forget to build a list of lapsed donors, as well! Although these folks have previously stopped their giving, they have already displayed an interest in your work. 

Unsure about reaching out to former donors? You might enjoy our article, 3 Key Elements of a Lapsed Donor Letter

As you broaden your search to identify potential donors outside your organization, you can look into local affinity groups that share a common cause with your organization and dig into your social media channels to see who is interacting with your nonprofit. If you have pre-existing relationships with any local businesses or corporations, that’s another great source of potential supporters.

Example:

Your nonprofit offers Mommy & Me painting classes for young kids, and you take a list of class registrants and start building a list of potential donors. These donors will be segmented into their own group, with appeals that speak to supporting other children and young parents in their community.

Step Two: Qualification

This second step in the donor cultivation cycle is about more than simply taking a long list of potential donors and turning it into a short list. Learning more about these potential donors by looking at their interests and their capacity to give will help you determine the type of donor they might become. 

Start with looking into how this person has interacted with your nonprofit in the past. Have they attended any of your events or classes? If so, how many and how often? In Neon CRM, there is a “Timeline” feature that gives you a holistic view of a supporter’s overall relationship with your nonprofit—if you’re a Neon CRM user, that feature will provide you a boost during this stage.

When it comes to interests, you can always (respectfully, professionally) creep on their social media profiles—don’t forget to check out their “likes” in addition to their posts. You can also run a Google search to find any articles about them in local publications that would point to their involvement in other groups or activities. 

In order to determine someone’s capacity or potential to give, you will want to perform a wealth screening. This involves looking at wealth markers like real estate ownership, stock transactions, business affiliations, and political giving—plus other donations they have made to other organizations. These can be time intensive, so you’re better off performing them for a few potential large donors versus your small donors.

For large donors, it’s also a great idea to research your donors the old-fashioned way: By talking to them. Events are a perfect opportunity to begin a conversation with a potential major donor. Invite them to lunch or to chat over coffee. Don’t get too over-eager to start making your appeal, though; that’s what the next two steps are for.

Example:

Based on your list of class registrants turned potential donors, you do some digging on Facebook and learn that one of them—let’s call her “Dana”—is a Senior Vice President at a local corporate office. In the past, she’s held fundraisers for a local congressional candidate whose policies align with your nonprofit’s mission. Once you pull her political donation amounts from the FEC website, you earmark Dana as a potential major donor and send her a personal invitation to an upcoming event.

Step Three: Cultivation

During this step in the donor cultivation cycle, you are building a relationship with your potential donor that will (hopefully) lead them down the road to their first gift. Since you are building a relationship with them, the most important thing to remember is to communicate, communicate, communicate. 

Educate your potential donor about the past, present, and future of your organization, its mission, and its work. But this isn’t a one-way conversation. Learn more about them and what they want from their potential relationship with your nonprofit. A great way to build connections with your donor is to invite them to join you for an event or to volunteer for a project. 

The channel you use to communicate with your donor is going to be important. For smaller donors, email is a great channel to use. You can create an email series for potential donors that teaches them more about your nonprofit and begins priming them to get involved with a gift. If you have a nonprofit CRM, you can even automate those emails, saving your staff tons of time.

Direct mail can also be a good channel, but it’s a lot spendier than email. While you stand a better chance of someone reading a piece of direct mail over an email, you need to make sure your mailer really hammers home your mission and its impact on the community. To keep the conversation going, you can also include a QR code that directs them to additional educational materials or opportunities to get involved.

For potential major donors, you’ll want to keep talking with them in person. You’re asking more from them, and that one-on-one personal connection will be critical. If you have trouble meeting with them in person, you can always pick up the phone. If they’ve recently attended an event or a volunteer opportunity, give them a ring to say thanks and follow up with them—or at the very least send a personalized email or a handwritten thank-you note directly from you or a leader at your organization.

Example:

Dana shows up at your event, a Family Movie Night your nonprofit’s holding in a local park. You spend 10 minutes chatting with her before the movie and you set a date to grab coffee. Over the next several months, you meet with Dana a few times in person to learn more about her and talk about your organization’s work. You extend an invite to a second event in partnership with a local soup kitchen; after she attends, a board member sends her a handwritten thank-you note.

Step Four: Solicitation

This is the big one. The time has come to make your appeal and move this person from “prospective donor” to “active donor.”

When making your appeal there are a few principles you should keep in mind: 

  • Be direct. An appeal doesn’t require a big windup; that’s what the “Cultivation” stage was for. 
  • Instill a sense of urgency. Giving a timeframe for donations is a great way to inspire immediate action. You’re not just trying to raise $5,000, you’re trying to raise $5,000 by next Thursday.  
  • Be specific. Asking for money to support a soup kitchen is good. Asking for $30 to feed a hungry neighbor for a week is better.
  • Focus on the one, not the many. Don’t ask for donations to help feed 10,000 hungry people. Share the story of one person and ask for money to help feed them. 

For small donors, it is perfectly okay to make your ask over email or through a piece of direct mail. Just make sure your donation forms or remittance slips are optimized and ready to go if that person says yes. You don’t want someone reading your email, deciding to give, and then becoming frustrated by your donation form and bailing on the process.

A great way to increase your donation form conversion rates is to customize your donation form. That could mean personalizing it to the specific campaign you’re running, like supporting summer camp scholarships versus raising money to feed hungry children. For mid-size donors, you could also personalize your donation form specifically to them and their interests. 

Neon CRM allows users to create unlimited customized donation forms that all come with best practices built in. to learn more, check out this article.

For major donors, you will want to make your appeal in person. And if they say no, that’s okay! Not all asks are going to be answered with a “yes.” You have still built a good relationship with this person and that relationship is worth maintaining. In other words, return to Step Three.

Example:

It’s the big day! Following your last event—and your board member’s handwritten thank-you—you invited Dana to lunch and let her know that you had something you wanted to discuss. At lunch, you don’t beat around the bush; you ask Dana to join your top donor tier—minimum $5,000 gift—-with a gift that would support free after-school classes for at least 50 local kids. She says she’ll have to think about it. The next week, she calls and says yes, and even makes a total gift of $6,000!

Step Five: Stewardship

This final step of the donor cultivation cycle takes us back to Step One. Donor stewardship is the act of keeping donors engaged and invested in your organization with the goal of converting them into recurring donors or into giving another, larger gift. 

Step Five starts with your (prompt!) thank-you message and receipt. For major donors, your thank-you note should be handwritten by your executive or by the board. For small donors, you can include a short thank-you message on your donation receipt followed by a longer personalized thank-you message sent a couple of days later. 

For more advice on writing a perfect donation thank-you letter—or to download some handy thank-you letter templates—check out this blog post.

You can also thank new donors by adding them to a donor list on your website and printed materials, or by shouting them out on social media or at your next event. Depending on your line of work, use your best judgment about sharing someone’s name publicly. 

Next, you’ll want to keep your donor informed about the impact of their gift. Over the following weeks and months, send them updates with specific descriptions of how their donation has helped your nonprofit fulfill its mission.

As time marches on, keep reaching out to your new donor with news and opportunities to stay engaged. Invite them to events, or give them early access to new classes or volunteer events. Let them know when you score a big win.

Eventually, you’ll start building a plan for how you can take your first-time donors and start turning them into long-time donors—otherwise known as moves management. That will mean returning to Step One of the donor cultivation cycle, only now you’ll be focused on getting them to make a second gift instead of a first one.

Example:

Once Dana has made her gift, you have your board president send her a handwritten thank-you letter and you add her name to your nonprofit’s website. At your next event—which she is attending at your invitation—your executive director shouts her out personally. Over the next several months, as classes start, you send Dana emails updating her on the scholarship students she’s funding and have all the kids sign a letter to her. Dana is now in your major donor email segment where she receives high-level news and updates. Towards the end of the year, your emails start focusing on the upcoming capital campaign to build a new rec center, and the cycle starts anew.

The Donor Cultivation Cycle Powers Nonprofits

Following the donor cultivation cycle will set both your fundraising team and your nonprofit as a whole up for long-term success. From Identification through Qualification and Cultivation to Solicitation and Stewardship—which of course leads you right back to Identification—the cycle breaks the fundraising process down into clear, manageable steps. Mastering this cycle can provide your nonprofit with a stable foundation to grow your mission.

Throughout this article, we’ve mentioned the ways a powerful and dependable nonprofit CRM can serve your organization. Whether it’s by segmenting audiences, automating email sends, or creating a whole host of customized donation forms, Neon CRM has all the tools you need—including features that support volunteers, events, payment processing, and reporting—to further your mission and scale your impact.

Want to learn more about Neon CRM? You can schedule a demo today.

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