The 5 Key Stages of the Donor Cycle
Fundraising is essential to nonprofits. The more you raise with the support of new and existing donors, the more you can do to fuel positive change. However, getting an individual donor to contribute to your cause is easier said than done.
That’s where the donor cycle comes into play.
Below, we’ll walk through everything you need to know about the donor cycle and what it means for your nonprofit organization. Let’s start by defining what it is and why it matters. Then, we’ll get into the individual stages and how to optimize each step of the process to acquire more passionate supporters for your cause.
What Is the Donor Cycle?
Donor cycle is a term used to explain how potential first-time donors discover your organization and what steps they take following that discovery that motivate them to support your cause.
Each stage of the donor journey presents opportunities for your nonprofit to engage supporters in a way that inspires action. If you dedicate time to crafting a strategy that best captivates donors in each stage, your organization can achieve success.
The donor cycle involves five key stages:
Keep in mind that your process may differ from other organizations. How donors find your nonprofit and the specific tactics you use to engage them isn’t a copy-and-paste formula. So rather than following a templatized outline, strategize how to customize your approach to reflect your unique goals.
Why Is the Donor Cycle Important for Nonprofits?
When you operate with a basic understanding of your donor cycle, you avoid wasting valuable time, money, and energy—and can optimize opportunities to boost new donor acquisition at each stage of the process.
Here are a few benefits of understanding and optimizing your donor cycle:
- Targeted outreach: Tailor your donor communications confidently to target individuals most likely to contribute to your nonprofit. This increases your chances of finding donors interested in a long-term relationship with your organization and decreases your cost per acquisition.
- Better engagement: Understand your audience to connect with them on a more meaningful level. You’ll know what matters most to them and which messaging likely resonates, whether chatting with a major donor, lapsed donor, or anyone else.
- Recurring giving: Turn one-off donors into recurring givers by getting individuals to go around your donor cycle multiple times. After all, your donor cycle is a cycle—donors don’t just go through it a single time.
- Deeper relationships: Create meaningful relationships that lead to strong donor stewardship, which inspires donors to give more and potentially recommend your nonprofit to friends, family, and communities. Those face-to-face conversations with their loved ones may be enough to pique prospective donors’ interest and explore your cause.
The 5 Stages of the Donor Cycle
Starting with the first of the five donor cycle stages, the identification state is where you identify high-potential prospects. Start by looking at your supporters’ demographics and try to spot trends. Here are some data points to consider when assessing your current donor base and identifying potential donors:
- Socioeconomic status
You can analyze your audience and generate reports on the makeup of your current donor base using Classy’s online donor management software. Want more data on your audience? Here are a few other methods you can use to collect information:
- One-on-one interviews
- Phone calls
Regularly review this step in the donor-cycle process to ensure you have the right target audience. After all, priorities and values change, and you might need to shift your targeting occasionally.
The qualification stage is where you prioritize which donors you want to cultivate. Since you can’t spend your time trying to get everyone to donate to your nonprofit, instead focus on those with the highest potential to fuel your fundraising efforts.
Determine your qualifications for prioritizing donors using the following qualifications:
- Donation frequency
- Volunteer frequency
- Donation amounts
- Influence on peers or community
In addition to these basic qualifiers, here are some questions to consider during the identification and qualification stages to guide your strategy:
- Which giving methods tend to resonate most with your audience?
- Which channels does your audience prefer?
- How does your audience most often engage with your nonprofit?
- Are there new ways your audience engages with your nonprofit?
The cultivation stage is where building relationships with your donors becomes a priority. You’re not asking for anything yet—you’re just getting to know them and helping them get to know you.
Keep in mind that the donor cultivation stage is a bit of give and take. Here are a few things you’ll want to learn from your audience during this time:
- Which programs are your donors likely to support?
- Is there anything your donors would like to change or improve within your organization?
- How do your donors prefer to support your organization?
- What makes donors feel valued?
Once you gather those insights, it’s time to help your supporters understand a bit more about your nonprofit and its mission. Here are some tactics you can use to educate them:
- Meet for one-on-one meetings
- Host in-person and virtual fundraising events
- Share relevant information on your website, blog, and nonprofit newsletter
- Post articles and stories on social media
The solicitation stage is where you start asking for donations, volunteers, and support. You’ve done the hard work identifying your audience and cultivating your relationships—this is the step in the fundraising cycle when you make the big ask.
Keep in mind that it’s about how you ask. So tailor your solicitations to your audiences’ needs, wants, and values. Think about things like:
- Who: Ask the right person. While one prospect might willingly give to your organization, their partner might be the one who makes the finance decisions. Identify the decision-maker and target them for your appeal.
- What: Be direct. Don’t just ask for “help” or “support.” Ask for donations, recurring gifts, event registrations, or volunteers—even if you’re seeking a major gift, be specific with your request. Larger donation requests require strategic language to ensure donors feel appreciated.
- When: Nail your timing. For example, Giving Tuesday is a great time to ask for donations. However, asking for donations online or via direct mail during times of economic uncertainty might not be the best approach.
- Where: Use the right channels. Your audience might be more willing to give when they’re on their desktop rather than surfing Instagram in bed at night.
- How: Tell your audience exactly how to donate and give them the tools to keep it simple. Then, provide them with a link to a personalized donation form that reflects their interests or level of commitment to your cause. In addition, you’ll want to provide them with ample payment options to ensure they can give without any roadblocks.
The stewardship phase is where you focus on donor retention and identifying ways to transform one-time donors into loyal recurring donors. Here are a few ways you can increase the odds of donors giving again:
- Simplify giving: Make it easy for your supporters to make donations. Payment processing software like Classy Pay lets your donors pay with credit cards, ACH payments, digital wallets, Venmo, and more.
- Acknowledge donations: Use “please” and “thank you” to go a long way with your audience. Show your donors you care with heartfelt donation acknowledgment letters and thank you messages.
- Focus on quality over quantity: Focus on high-quality messaging at a lower frequency. This will ensure you don’t annoy or alienate any potential (or current) givers.
- Keep donors in the know: Use newsletters and social media posts to practice nonprofit transparency and update donors on what’s happening at your nonprofit.
- Share progress updates with donors: Let your supporters know how you’ve used their donations to fuel meaningful change. Post photos and stories to illustrate what you’ve accomplished.
Improve the Donor Cycle With Classy
Ready to elevate your donor lifecycle strategy? We’ve got just what you need. Classy’s fundraising platform is jam-packed with powerful fundraising tools to boost donor engagement, encourage recurring giving, and grow your nonprofit:
- Classy Live: Power your virtual, hybrid, and in-person event experiences with our livestreaming software.
- Classy Pay: Invite supporters to donate with credit cards, ACH payments, digital wallets, PayPal, and more with the support of our in-house payment processor.
- Fundraising sites: Collect one-time or recurring donations through desktop or mobile devices with ease.
- Donation management: Manage your campaigns, track performance, build reports, and more with Classy’s supporter management software.
- Recurring giving: Empower your current donors to increase their impact on your organization through consistent donations.
Request a demo to see everything our platform has to offer.
Download the Donor Retention Checklist
Subscribe to the Classy Blog
Get the latest fundraising tips, trends, and ideas in your inbox.
Thank you for subscribing
You signed up for emails from Classy