Fostering a Culture of Philanthropy with the Fundraising Cycle

The Fundraising Cycle is one of the most commonly used conceptual frameworks with nonprofit development. It represents the process of obtaining and retaining donors through a series of relationship-building activities. More importantly, it reminds us that Development and Philanthropy are NOT primarily about money or a transaction: they are about building meaningful relationships and identifying shared values.

There are five stages of the cycle and each are applicable to both individual giving and institutional giving. Even foundations and corporations want to build relationships, rather than be seen as ATMs-- where you punch buttons and get some cash.

1. Identification--Becoming aware of a prospect. The prospect may express their interest in the organization or otherwise be known to share values with the organization.

2. Qualification--Research and learn more about the person or funder. Maybe someone on the Board shares that they're neighbors and have heard that this individual has attended a special event in the past. Staff might check in the database and find out that they’ve made small gifts in the past, qualifying them for more intentional cultivation efforts.

3. Cultivation--Learning more about the shared values between the organization and the prospect. This may look like going out for coffee together (when that’s allowed again), or it might be inviting them to learn more about the nonprofit’s current initiatives.

4. Solicitation--This is the ask, a customized invitation to join the efforts of the organization in a way that is most meaningful for them. It might be in a letter or at an event. It might be in a meeting with the prospect, a Board member, and staff. It might be an invitation to serve as a volunteer, and not an ask for a gift.

5. Stewardship--This is the red-headed stepchild that too often gets neglected by nonprofits and adversely impacts their development outcomes. I would argue this is the most important step, but the step where most nonprofits fail. This looks like an acknowledgment letter being sent within 24-48 hours of the gift receipt. This is a phone call from a Board member to any new donor over a certain level. This is a call from the Executive Director when the organization receives a first-time major gift from a donor. This is a handwritten note during the year to simply thank them for being a part of the organization's work.
   

THE FUNDRAISING CYCLE

Each stage will look different depending on the prospect and their needs. Some folks will be excited and race through the stages and make a gift the same week they first learn about the organization. On the other hand, if you’re cultivating someone for a major gift, industry best practices suggest that it takes 18-24 months to move them from being a prospect to a major donor.

Can you think of any examples of when you’ve seen the donor development cycle work well? Or maybe when you’ve seen an organization skip a step? The donor cycle should feel like a smooth seamless relationship for the donor, but it requires elegant coordination between Board and staff. In an upcoming blog, we'll tell you how to build a Triple-A Board that collaborates with development staff to make the donor development cycle work well and maximize funding.