Understanding the Donor Lifecycle: From Discovery to Stewardship

Key takeaways:

• Donors at all giving levels are shrinking. Major gifts from affluent households are increasingly important to fill the fundraising gap. 
• Identifying, developing, and retaining donors is critical. Organizations can’t afford to spend human and financial capital on anyone but the most qualified prospects. 
• The donor management lifecycle is data dependent. Likely, top-tier donors can only be identified with robust donor data that can be studied down to the smallest characteristics. 
• The cultivation process takes time. Organizations must simultaneously guide multiple prospects and donors through the pipeline to maintain a steady flow of donations. 
•  Organizations can’t manage it all alone. Technology, like donor databases and CRMs, can take the pressure off strained teams and vastly improve every stage of the donor management lifecycle. 

Fundraising isn’t a linear donor journey, with a beginning and end—it’s a perpetual donor cycle. You find a prospective donor, excite them about your organization, maintain their interest, get them to give, and nurture an ongoing relationship. 

But the donor lifecycle is like a fire: You need to understand how to get it started and keep it going—you can’t set it and forget it. Moves management, the strategic process of moving donors through the lifecycle stages, provides the insight behind each stage in the cycle and helps you develop a strategy for going from the spark of engagement to repeated giving.

Why the donor cycle has to keep spinning

Every stage is an opportunity to both collect data and learn more about a donor as a person and a giver. This intel helps you frame how you develop and execute a long-term relationship strategy that keeps them in the giving fold. It’s also critical for your overall prospecting and stewardship efforts: You’ll have guidance on how to find, approach, and maintain donors based on demographics, affiliations, philanthropic engagement, and more. 

It’s no secret that fundraising and donor retention sledding is becoming increasingly difficult for organizations. This makes it even more important for organizations to embrace moves management to set a roadmap, from donor onboarding to stewardship. 

Mixed trends make moves management a must.

Overall donor trends

• Donors: -3.0% YOY 
• Donor retention: +0.15% YOY 
• Donor dollars: +3.7% YOY 

Donors by donor size

• Micro ($1-100): -10.3%/50.9% of donors 
• Small ($101-500): -4.8/30.8% of donors 
• Midsize ($501-5K): -3.9%/15.4% of donors 
• Major ($5K-50K): -1.9%/2.6% of donors 
• Supersize ($50K+): -1.4%/0.4 of donors 

Source: Fundraising Effectiveness Project 

The donor management lifecycle, stage by stage

Each stage of the donor management lifecycle is dependent on its predecessor. Missing—or miss-stepping—a stage can have a cascading impact on the success of your entire strategy.

Definitions of the stages of the donor management lifecycle

• Identify potential donors through data research and analysis. 
• Qualify a donor’s capacity and willingness to give. 
• Cultivate relationships through personalized engagement. 
• Solicit based on the donor’s readiness and identified giving level. 
• Acknowledge the donor’s contribution and impact. 
• Steward the donor relationship to promote retention and increased giving. 

Identify

Data is your greatest ally when finalizing your donor cycle strategy—and it begins at the identification stage. The best place to start is at your own front door: Study your existing donor data for, among other things:

• Recently lapsed donors that are still warm and ready for outreach. 
• People who have interacted with you but not donated. 
• Donors whose giving commitment has increased (even decreased is an opportunity for engagement). 

The identify stage is also where technology plays a crucial role. Donor databases and fundraising CRMs let you capture both current and new donors more efficiently and effectively. Altrata provides a unified platform that can help you screen your existing contacts and uncover new, high-potential prospects aligned with your strategic goals through advanced search and filtering tools.  

Altrata impact at the identify stage

Use human-verified data to help you make decisions with confidence:

• Collect and analyze personal and professional demographics. 
• Investigate interactions with your organization through social media, volunteerism, and more. 
• Assess wealth levels and giving potential. 
• Research philanthropic history and patterns. 
• Study interests, passions, and hobbies. 

Qualify

The qualification stage is where you analyze your donor data, collected in the identification stage, through a specified framework, to enable meaningful outreach at scale. Organizations of all sizes must work within staff, time, and budget constraints, so canvassing the entire donor universe isn’t just out of the question—it would be counterproductive to finding top donor candidates.  

The place to start the qualifying stage is with you.  Ask yourself, “What does our ‘ideal donor’ look like?” Then, collect all the characteristics that comprise the answer. You’ll dig into and refine the data you collected during the identify stage based on a range of qualifiers: 

• Level, frequency, and recency of engagement. Active interaction and participation, as well as money, can be an indicator of a willingness to donate time and service. 
• Personal reasons for supporting your organization. A meaningful connection to your cause increases the likelihood of a financial commitment. A prospect with personal motivations for giving can be as valuable, if not more, than someone with considerable assets but no such link. 
• Financial ability to give. Identifying a donor’s sources of wealth and the frequency and amount of past donations to you and other organizations and causes can help you pinpoint an individual ready to give—or increase their giving. 

Altrata impact at the qualify stage

Technology-powered analysis uncovers donor means and motivations:

• Analyze wealth. 
• Review donation history.
• Measure giving capacity. 
• Study philanthropic background. 

Cultivate

Donor cultivation is courtship before marriage: It takes time to get to know each other before you make a commitment—and neither happen overnight. 

Philanthropy Works conducted a series of interviews with fundraisers from different sectors and organization sizes, asking them how much time and how many meetings it took for them to cultivate donors. While they all agreed the answer was gift size and donor engagement dependent, their answers included: 

• One month and one meeting (small gift – $500) 
• 8-12 months with 4-6 meetings (major gift – $10K+) 
• 6 months to three years with 3-5 meetings (major gift – $50K+)   
• 2-3 years with 5-6 meetings (major gift – $100K+) 

Research by MarketSmart further exemplifies how time from identification to gift close can vary.  

While a courtship occurs organically, cultivation succeeds through a strategy designed using data acquired through identification and qualification. You’ll nurture each donor along a tailored journey based on their unique characteristics, ensuring every interaction is genuine. 

Cultivation starts at the top

Segment your prospects. Sort your prospects based on their qualification data, including their wealth, personal connection to your organization or cause, past giving habits, engagement, and more. You’ll be able to identify different tiers of prospects (top, middle, and bottom) and determine where expenditure of staff, time, and budget will deliver the best ROI.  

Do a donor deep dive. With your prime prospect targets identified and the playing field narrowed, it’s time to dig deeper into the data and turn the facts into a prospect narrative. You want to drill down to what motivates them personally, professionally, and philanthropically. 

Create individualized engagement plans. Each prospect should have their own strategy that can be adjusted as time and events impact the journey. This can include: 

• Creating scripts for personal engagement. 
• Selecting personalized outreach channels and materials. 
• Setting a calendar/cadence for maximum engagement without pressure. 
• Designing an approach to meetings. 
• Developing events and opportunities to engage with your organization and their peers. 
• Most importantly, you want to know their giving pressure points—where to hit and what to say to elicit the greatest giving response. 

Choose your advocate(s). Your organization’s size will dictate how you assign advocates to engage with prospects. However, your top candidates will require personalized, consistent, white-glove attention that makes them feel valued and helps to build trust. At best, you should assign one or two advocates, supported by your organization’s board and management leaders at key times, to each prospect. 

Altrata impact at the cultivate stage

Integrated systems let you correlate donor data for optimal cultivation:

• Use relationship mapping to help you visualize connections and identify warm introductions. 
• Engage targets using relationship mapping to foster authentic connections, with insights into interests, passions, and hobbies. 
• Get support for international campaigns and donor strategies with data from 100M+ donor profiles. 

Solicit

This is where the hard work hopefully pays off: the ask. Planning is equally crucial for this stage—a mistake could upend everything you’ve done to get here. 

1. Who will make the ask?

The asker should be someone with whom the donor feels comfortable or enhances their sense of value. Like donor cultivation, it should be a personal, personalized experience. Avoid the inclination to make it a team effort: too many askers could be off-putting and make the donor feel pressured. Suggested askers include:

• Head of the organization 
• Director of development 
• President of the board 
• Cultivation advocate, perhaps in tandem with an organization leader 
• An existing peer donor, who can add their personal story to increase motivation  

2. How will the ask be made?

Prepare a written proposal that includes your organization’s story, purpose for making the ask, gift amount, and how the donation will be used to support the purpose. You could also include financials, donor testimonials, an impact statement from/photos of the people or causes the donation will support, etc.

3. What will you do/say if the answer is no?

You can prepare for an ask decline but not the donor’s emotions. Take a measure of their response before deciding whether to counter with a modified ask or simply say thank you and not burn a future bridge. If the “room” is right, you can continue the conversation by respectfully asking their concerns, if you could speak with them again down the road, or exploring a lower gift level with which they may be more comfortable. 

Acknowledge

Whether or not you walk away with a gift, the donor should be recognized and thanked for being gracious with their time over the course of the cultivation. With the right post-ask follow up, there’s the potential for a current “no” to become a future “yes.” A thank you can come in any form—a phone call, email, personalized letter, or all three—all dependent upon the donor’s tier and gift. Regardless of the method, it should, like the entire process, be personalized to drive home their value to your organization as both a person and a donor.

Steward

You’ve spent months or years bringing a prospect into the fold as a donor, but a one-time gift isn’t the endgame for all the hours, effort, and money you put into their journey. Donor retention through ongoing stewardship gets you where you want to be: Increasing a donor’s financial and participation engagement, and their willingness to provide “warm handshake” access to other prospective donors in their network. 

The steps to successful stewardship

The donor lifecycle is a path to a perpetual pipeline

One set of statistics should jump out at you: How long it takes to cultivate and convert a prospect into a donor. Implementing a donor lifecycle strategy means you can not only have but successfully manage a pipeline of multiple donors moving through each of the stages. Consider how that helps you maintain your fundraising goals and keeps people moving through the cycle and pipeline:

How Altrata can help get your donor lifecycle in motion

Altrata empowers nonprofit fundraising teams to accelerate major gift and fundraising strategies by delivering verified intelligence on high-impact individuals. Through a unified platform combining wealth, professional, and network intelligence, Altrata reveals warm paths, philanthropic interests, and executive relationships that traditional wealth screening tools miss. 

Donor databases are exceptional tools for collecting, storing, and parsing data – but it takes something more to make truly insightful connections between data and see each donor as an individual and as a larger persona. And that’s where our API shines. 

Our API is an application programming interface that links donor data with your internal CRM or other data environment to accelerate donor intelligence and improve the accuracy of your decisions. That’s a gamechanger when time and donor giving and satisfaction are on the line as they move through the lifecycle.  

How can you leverage Altrata’s API?  

• Look at your donor base and identify individuals with the greatest propensity to give.  
• Scan through a database of millions and see who has an affiliation with you.  
• Study the interests, passions, and hobbies of your target audience to best refine your outreach strategy.  
• Plan a highly effective referral strategy to cultivate new relationships by engaging with your existing donors’ known associates.   
• Qualify potential donors and identify obstacles before investing time and resources into new relationships.  

Discover how Altrata can help you put your donor lifecycle into motion. Request a personalized demo with our team today. 

Frequently asked questions

What’s a donor cycle?

The donor cycle is an ongoing process of identifying, qualifying, cultivating, and stewarding donors. It ensures your organization is targeting, onboarding, and retaining the most qualified, long-term givers.  

Why do we need a donor cycle management strategy?

Two words: efficiency and effectiveness. Implementing a donor cycle management strategy can ensure you’re only moving donors with the highest propensity to give, based on factors like wealth, proven philanthropic tendencies, and a connection to your organization or cause through the lifecycle. Your time, effort, and money will be more efficiently spent, while your donor discovery and retention and fundraising efforts will be more effective. That efficiency is critical when you’re running multiple donor lifecycles and need to keep all the balls in the air.

How long does it take to go from donor identification to gifting?

There’s no set time and the range is wide: from a few months to a few years. While the size of the intended ask can be a factor in how long it takes to cultivate a prospective donor, you also have to manage the personal intangibles inherent in developing any relationship. A donor is ready when they’re ready. Trying to push them along can not only nip the ask in the bud, but also prevent them from engaging with you in the future.

How can technology help with implementing and managing our donor management strategy?

The same two words: efficiency and effectiveness. A donor database and CRM, linked by an API like Altrata’s, can help you make high-level connections when casting your donor net and get personal-level insights that are critical for qualifying and cultivating your top donors. Robust, human-driven, and accurate data, studied and quantified by powerful systems, frees your organization’s staff to focus on creating and nurturing high-performing donor relationships.