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The Donor Lifecycle: The Basics and 3 Stewardship Strategies

When you think about your nonprofit’s future, what do you see?

Whether you’re hoping to increase your number of community programs, serve more beneficiaries or maximize your fundraising results, there is one common element that is integral to your success: donors.  

Loyal donors are the lifeline of your organization—they champion your organization to friends and family members, advocate for your cause and most importantly, they give to push forward your goals.  

To successfully convert casual supporters into loyal contributors of your mission, you need a strong stewardship strategy designed to upgrade donors’ giving amounts and frequency. We’ll walk you through everything you need to know about boosting your donor retention efforts, but first, let’s make sure you have the basics covered by taking a deep dive into the donor lifecycle.  

What is the donor lifecycle? 

The donor lifecycle, also known as the donor cultivation cycle, refers to the different relationship-building stages between a nonprofit and a donor—from identification to converting them into lifelong supporters with the right stewardship strategies. Aly Sterling Philanthropy’s guide to donor stewardship breaks down the lifecycle into these five stages:  

A chart depicting the five stages of the donor lifecycle, repeated below. 

1. Identification: Identify prospective donors by conducting prospect research, which involves collecting key data points like past giving, wealth markers, business affiliations and philanthropic interests. You can also reach more prospects with the help of multichannel marketing and by leveraging your board members’ networks.  

2. Qualification: Aim your donor cultivation efforts toward the supporters who are most likely to give. To help qualify your prospects, look at their engagement history with your nonprofit, affinity markers and capacity markers.  

3. Cultivation: Before you make your first donation ask, form the building blocks of a strong relationship and familiarize prospects with your nonprofit’s mission. For example, you could send educational materials about your nonprofit’s cause, such as blog articles, or invite prospects to your next volunteer outing so they can get to know your organization in a hands-on way.  

4. Solicitation: Now you’re ready to ask your donors for a reasonable gift amount based on what you’ve learned about them. Make your request specific, emotionally compelling and personalized to the recipient.   

5. Stewardship: After donors give for the first time, you need to actively work to retain their support. In fact, it’s estimated that 81.4% of new donors never make a second gift. Create consistent engagement and outreach opportunities with your supporters so you can encourage them to give on a recurring basis. 

If you’re like most nonprofits, you likely struggle with retention, making stewardship a critical piece of the donor lifecycle. Let’s take a closer look at how you can upgrade your donor stewardship plan.  

Set stewardship goals 

It’s easy to say that you want to improve your donor retention rate, but by how much? How will you actively turn this goal into a measurable objective that you can put into action? What different projects will you need to lead to support your stewardship plan, and who will be in charge?  

Use the SMART (specific, measurable, achievable, relevant and time-based) goal-setting model to answer these questions and turn your goals into a reality. Consider this example SMART goal on growing your major giving pool for inspiration:  

  • Specific: Our nonprofit will aim to step up our engagement and outreach efforts with prospective major donors to effectively guide them from cultivation to stewardship.  
  • Measurable: Within the next 3 months, we will aim to identify and cultivate relationships with at least 15 prospective major donors. By the end of the year, our target is to grow our total major gift fundraising by at least 20%. 
  • Achievable: This number seems well within our reach because we cultivated relationships with 10 prospective major donors during the last fiscal year and were able to increase funds generated by our major giving program by 15%.  
  • Relevant: Major donors play a critical role in helping our nonprofit pass the fundraising finish line, especially for large-scale campaigns like capital campaigns. By concentrating our stewardship efforts on major donors, we’ll be able to significantly increase funding and create a predictable donation pipeline of large contributions.  
  • Time-based: Our donor stewardship team will start conducting personalized outreach with prospective major donors within the next two weeks, and we’ll regularly check in on our progress every other week over the course of this fiscal year.  

As you lay out your strategic plan for seeing your goals through, make sure to identify the point people associated with each task. For example, you might have your board members facilitate sit-down meetings with your top major donor prospects to personalize your engagement even further.  

Segment your donors 

While getting to know all of your donors on a one-on-one basis would be ideal, it isn’t resource or time-efficient. Segmenting your donor communications can help you create messages that resonate with large groups of your audience at once, allowing you to maximize your donor stewardship efforts.  

For example, you might segment your emails by the following factors:  

  • Donation amount: Take a deep dive into your donor database to look at the average donation amount your supporters give. This will help you create tailored donation requests that they’re more likely to act on.  

  • Donation frequency: Donation frequency refers to how often your supporters donate, and by understanding this data point, you can develop a communication schedule that aligns with their usual giving timeline. 

  • Donation recency: Knowing the last time your donors gave, whether it was last month or a year ago, will inform when you should ask for another request. For instance, you might develop a separate donor segment for lapsed donors so you can reengage them in your mission, and then when the time is right, ask for another gift.  

  • Engagement level: Do your donors interact with your social media content, volunteer at your organization or attend your community events? Their engagement can help you pinpoint their interests so you can better tailor your communications to them.  

  • Communication preferences: Some donors prefer to be reached by email, while others prefer direct mail. Send out a survey that asks supporters for their communication preferences so you can focus on using the channel where they’re most likely to see and act on your messaging.  

  • Demographics: Demographic information like location can help inform your stewardship activities. For instance, if a board member is traveling to Florida, they can set up individual meetings with each of your Floridian major donor prospects and major donors.  

Segmenting your supporters by these factors can help you streamline your communication and stewardship strategy all at once. Make sure to segment your supporters by groups that make the most sense for your nonprofit’s objectives so you can make significant headway on your SMART goals.  

Work with a nonprofit consultant 

As you lay out your donor stewardship strategies and goals, you might encounter some bumps in the road and realize that your plan needs some adjusting. An expert nonprofit consultant can bring a new, third-party perspective to your donor stewardship plan and help reenergize your internal operations to improve your engagement and fundraising efforts.  

Specifically, your consultant can help:  

  • Identify key performance indicators that make sense for your nonprofit and explain tangible next steps to reach these goals.  

  • Develop a stewardship matrix that outlines the donor engagement tactics you’ll use for different donor types, such as including donors on a supporter recognition wall, sending handwritten thank-you letters and inviting top supporters to luncheons or tours of your facilities.  

  • Identify gaps in your toolkit so you can automate your stewardship efforts and improve your donor data collection.  

To find an expert that can meet your specific needs, re:Charity’s guide to nonprofit consulting firms recommends researching the expertise background, and skills of the top consultants. Start by asking board members and other industry professionals for recommendations on firms you might hire to advance your stewardship plan.  

Wrapping Up 

As you execute your donor stewardship plan, follow up with your supporters and gather feedback. This will point you to ways to improve your engagement and outreach as well as show donors that you value their opinions. Stay flexible and be open to adapting your approaches for certain donor groups so you can enhance your results.  

About the Author

Aly Sterling's decision to start her own consulting business in 2007 was driven by her belief in leadership as the single most important factor in organizational success, and her determination to work with multiple causes at one time to scale societal change. Today Aly manages the direction and growth of her firm while advising clients on the organizational challenges that affect their sustainability and mission success. Most recently, she partnered with a legal aid foundation in Los Angeles to lead their first-ever capital campaign for a new building headquarters, and currently serves as fundraising counsel to a prominent healthcare system managing multiple regional and national campaigns raising more than $85 million. In 2015, Aly led her firm to membership in The Giving Institute, an exclusive and highly respected professional organization for nonprofit consultants. The Giving Institute is best known for publishing the annual Giving USA report. Aly’s expertise includes fundraising, strategic planning, search consultation and board leadership development for the well-positioned nonprofit. She is regularly sought for comment by trade and mainstream media, including the Chronicle of Philanthropy and U.S. News & World Report. She has contributed to publications of BoardSource and The Governance Institute, as well as the Toledo Chamber of Commerce and The Giving Institute. Her workshops and keynote presentations have been featured at the meetings of the National School Foundation Association, the Association of Fundraising Professionals, the Indiana Philanthropy Alliance, Boys & Girls Clubs of America and a variety of foundations around the country. Today, Aly serves on the board of trustees for St. Ursula Academy and the Arts Commission of Greater Toledo, as well as the advisory board for the University of Toledo Family Business Center. Aly is past president of the Northwest Ohio chapter of the Association of Fundraising Professionals and has served on the boards of Leadership Toledo, David’s House and Advocating Opportunity, an organization formed to stop human trafficking.

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