When Team Moda curls up with a good book — or device, you can be assured the time spent absorbed is meaningful and informative. With Giving Tuesday only days away, it’s no wonder Guidestar Blog Author Adam Weinger’s latest article 5 Best Practices to Strengthen Your Fundraising Cycle caught and kept our attention. Read the full article here:
[Adam Weinger, on 11/19/18 8:00 AM] Fundraising is one of the most important tasks that your nonprofit team undertakes year after year. Without the donations of your generous supporters, you wouldn’t be able to fund your projects and act as a champion for your cause.
Every nonprofit professional should know the fundraising cycle: identification, qualification, cultivation, solicitation, and stewardship. These five steps lay out the groundwork for building and maintaining strong donor relationships and achieving your fundraising goals.
But how can you make sure you’re optimizing each step of the process to ensure that you’re giving donors and members what they want?
To help your organization increase its fundraising capacity and strengthen its donor relationships, we’re going to break down each step and suggest some best practices:
Identifying prospects and current donors with potential.
Determining the qualification of each prospect.
Cultivating a relationship with each prospect.
Delivering the perfect solicitation to the prospect.
Maintaining a strong connection with recognition and stewardship.
If you’re ready to learn about how you can increase the success rate of your own fundraising cycle and help your nonprofit achieve more of its objectives, read on!
5 Best Practices to Strengthen Your Fundraising Cycle
1. IDENTIFYING PROSPECTS AND CURRENT DONORS WITH POTENTIAL
The first step of the fundraising cycle is to find individuals within your community that may be interested in donating to your organization! Frequently, this step includes searching for people who have a history of philanthropic behavior with other organizations.
As the first step in the cycle, you need to assemble a list much larger than the amount of donors you really need. This is because individuals drop off through natural progression of the fundraising cycle—you won’t get a donation from everyone you ask!
While relying on the lists of donors from other organizations to find prospects is a tried and true practice, don’t forget to turn to your own community as a way to find more potential donors.
During your fundraising strategy assessment, don’t forget about those who have already proven their interest in your organization: your previous donors! But we’re not talking about individuals that you already engage with your solicitation and stewardship efforts.
The types of donors that often go overlooked during prospect identification are:
One-time midrange gift donors
Low-level recurring gift donors
Volunteers, who donate their time
And don’t forget to consider other organizations, like local companies or charitable foundations, that could be cultivated for a donation or grant!
Once you have a list of people involved in your organization, carefully consider their donor profile. How long have they been giving their recurring gifts? What was the event that precipitated the one-time donation?
If the answer to these questions indicates that they might be willing to give more, keep these people (and companies!) in mind as we move onto step 2.
2. DETERMINING THE QUALIFICATION OF EACH PROSPECT
If the first step was the very beginning of your research process, this step is all about more in-depth research.
Starting with your list of potential donors from step one, research each individual or company to determine their philanthropic habits and capacity to give. But how can you learn enough about an individual to determine their propensity to give if you don’t personally know them?
Determining the qualification of a prospect entails finding out if the prospect might be willing and able to give after a period of cultivation.
If someone has a connection to your organization, but doesn’t have the capacity to give, you don’t want to spend a ton of energy on cultivating them. In the same vein, if someone has a capacity to give but no philanthropic tendencies, they might drop off of the fundraising cycle before getting to know your organization.
Best Practice: Conduct Prospect Research
In step 2, you want to learn as much as you can about your list of prospects. But how can you find out enough about someone to determine their affinity and capacity for giving?
Conduct prospect research! During this process, you use publicly available information to determine affinity and capacity for giving. This publicly available information can be split into two categories: wealth indicators and philanthropic indicators.
Wealth indicators, analyzed through wealth screening tools and services, signify a person’s financial capacity for making gifts to a nonprofit organization. These data points include things like:
Home, vehicle, boat, and plane ownership
Salary, if publicly available
Philanthropic indicators are bits of information that allow you to glean whether or not someone has a history of interacting and engaging with charitable or cause-motivated organizations. For example, someone with a history of philanthropic behavior might:
Donate to charitable organizations.
Volunteer for organizations.
Donate to political campaigns or advocacy organizations.
These things can also help you determine whether or not the prospect will be interested in donating to your organization. For example, individuals who have already given between $5,000 and $10,000 to a nonprofit are statistically five times more likely to make a charitable donation than the average person!
For help conducting prospect and donor research, check out this awesome guide from Donorly to get started!
Narrow down your list from step 1 to just include people with the affinity and capacity to give to an organization like yours. Now let’s move on to step 3!
5 Best Practices to Strengthen Your Fundraising Cycle
3. CULTIVATING A RELATIONSHIP WITH EACH PROSPECT
Step 3 is definitely one of the most fun parts of the fundraising process. This is the stage in your relationship with the prospect when you get to know them personally and encourage them to get to know you and your organization.
During this period of time, which can take anywhere from 6 to 12 months, your job is to find out where their passions are, what motivates them to give, and what their goals for their philanthropic gifts are.
Every person is different, so it’s crucial that your organization practices “moves management,” or recording each move you make, by systematically keeping track of interactions between a prospect and your organization in a central database like your nonprofit CRM (customer relationship management software).
This keeps your fundraising team on the same page regarding the prospect’s cultivation timeline, as well as helps your own memory of where you stand with the prospect. But how do you build this type of relationship with a prospect?
Best Practice: Offer a Variety of Engagement Opportunities
Because every individual is different, your organization should focus on providing a plethora of different engagement opportunities to get your prospects engaged with your organization’s mission.
What does a potential donor need to see about your organization to help form an opinion and decide on whether or not to make a gift?
Some of the most common engagement opportunities include:
Meetings with the prospect and your board and executives.
Tours of your office and any other facilities you may operate out of.
Fundraising events like dinners and charity auctions.
Donors-only thank-you dinners.
With a broad variety of opportunities to interact with your prospects, you can get to know them in more nuanced and multifaceted ways.
Getting them involved in the day-to-day workings of your organization, like volunteer opportunities, also gives prospects the ability to get to know your community better as well. If they become a donor, it’s important that they fit in with and appreciate your existing community!
4. DELIVERING THE PERFECT SOLICITATION TO THE PROSPECT
This step, the solicitation, can be one of the most nerve-wracking parts of the fundraising cycle. During this stage, you ask the prospect for the donation.
This is a simple idea, but infinitely complex in execution. Has the prospect come to love your organization, or do they want to donate elsewhere? Will they be a valuable member of your nonprofit community, or do you feel as though they’re not a good fit?
You have to ask for the right amount at the right time, or you risk being turned down. Too low of an ask, and you might inadvertently offend the prospect; too high, and you might be shot down outright.
You also have to be prepared to leave without an answer! Making a financial decision requires a lot of thought, and the prospect might not be ready yet. So how do you consolidate all of these ideas into one perfect ask?
The worst way to ask a donor for something as personal as a donation is to give every prospect the exact same solicitation. It makes the prospect feel as though your organization doesn’t care about them, and it may make them want to donate elsewhere.
The easiest way to combat this is to completely personalize your asks based on the information that you’ve learned about the person in the past year or so. Common materials distributed during the official solicitation include:
- A letter to the prospect
- Marketing materials detailing your future plans
- Your annual reports and financial information
But yours might vary based on your organization’s mission! But no matter what you bring to the solicitation, make sure that it’s personal.
Put the donor’s name on everything. Create marketing materials for that person, based on what you know inspires them to donate. Focus your solicitation on the person as an individual, not on your organization.
The ask amount should also be based on careful research. Between their current financial situation and your understanding of their previous donation sizes, you can probably ballpark an appropriate gift size.
If you’re having a hard time with your asks, give this guide from Double the Donation a quick look to pick up some new tips!
No matter how you do it, remember that the solicitation is supposed to be the culmination of the cultivation process. Show your prospects that you were genuine and sincere while you were getting to know them, and your asks will be more successful!
5. MAINTAINING A STRONG CONNECTION THROUGH RECOGNITION AND STEWARDSHIP
Even though you’ve made the ask, your job still isn’t over! The relationship that you spent so much time carefully building isn’t going to maintain itself. Once your prospect has become a donor, you have to make sure that they feel appreciated.
Recognition and stewardship are two of the most important parts of strengthening relationships with donors. Recognition is important because people like to know that their efforts are acknowledged and appreciated.
Stewardship is important because donors need to know that their contributions are being put to good use. Ensure that you keep your donors in the know about new projects and buildings, fundraising campaigns, and more.
Best Practice: Balance Public and Private
When considering how best to show your gratitude to your donors, keep in mind that they probably want both public and private appreciation. Public appreciation is nice for donors because then their communities get to see their good works. Private appreciation is important because the donors feel your organization’s gratitude on a personal, intimate level.
So what can you do to ensure that you strike the right balance, and maintain a strong relationship?
Include your donors’ names in a prominent place. This could be a donor recognition wall in your organization, bricks along a walkway, or even naming a whole wing or building after a major donor. Don’t forget to keep your donor list updated on your website and in your annual report.
Invite donors to your events. Inviting donors to both private and public events is a great way to show your appreciation. A donors-only event demonstrates your gratitude, but invitations to public events reminds donors that they’re a valuable part of your community and that you want them to remain engaged with your efforts.
Send notes to your donors periodically. Whether this is a handwritten thank-you note immediately after the gift is made, or a Christmas card a few months or years down the line, donors will appreciate the effort that your organization makes to keep them involved and included.
When you balance public and private displays of gratitude in your stewardship efforts, you can build a more sustainable fundraising community.
The fundraising cycle may seem overwhelming, but with these simple best practices, your organization can strengthen its fundraising capacity and continue to succeed long into the future.
Adam Weinger is the president of Double the Donation, the leading provider of tools for nonprofits to help them raise more money from corporate matching gift and volunteer grant programs. Connect with Adam via email or on LinkedIn.