Research from the Fundraising Effectiveness Project highlights a compelling truth: retention rates are highest among donors who contribute at the $5,000 level or higher. In other words, data proves that major donors are the most likely to stay committed to your cause and give generously over time, which is why your nonprofit must work diligently to secure their dedicated support.
However, connecting with donors is about more than just securing a gift; it’s about building meaningful relationships. To do so, you’ll need a thorough understanding of donor cultivation fundamentals, including:
- What Is Donor Cultivation?
- What Is The Donor Cultivation Cycle?
- How To Cultivate Donor Relationships
Let’s review these essential topics to prepare your nonprofit to implement a successful cultivation strategy.
The more you know about your donors, the deeper relationships you can build with them.
What Is Donor Cultivation?
Donor cultivation is the process of developing and nurturing relationships with prospective major donors. Your target audience for cultivation may include individuals who have never given to your nonprofit or those who have given at lower levels. Regardless, it involves getting to know these individuals on a deeper level and employing a series of personalized strategies to deepen their connection to your mission. Ultimately, the end goal is to inspire them to contribute.
Cultivation vs. Solicitation vs. Stewardship
Since cultivation helps nonprofits secure donations and achieve their fundraising goals, it can sometimes be confused with other fundraising or relationship-building efforts your organization employs—particularly solicitation and stewardship.
The key difference between donor cultivation and solicitation is that cultivation prepares to ask donors for a contribution, while solicitation is the direct act of asking for a gift. Think of it like hosting an event. Cultivation is the planning process, which could take months of thoughtful preparations, while solicitation is the event itself.
The key difference between donor cultivation and stewardship is the timing and purpose of the activities. Cultivation focuses on developing relationships with potential donors before they make a gift, while stewardship begins after they’ve contributed. This means that cultivation is designed to encourage prospects to give, while stewardship aims to recognize and retain donors.
Here’s a breakdown of their differences:
1. Identification
During the identification stage, nonprofits conduct prospect research to identify major giving candidates and learn more about them. This involves:
- Cleaning your database by implementing data hygiene best practices, like formatting standards and data enrichment
- Researching and validating your findings using prospect research tools, such as a donor news alert service, to gather pertinent data
- Establishing a system for continuous monitoring so your nonprofit can track changes in donor data over time and respond accordingly
A viable prospect typically exhibits three markers: philanthropic activity, affinity, and wealth. For example, a viable prospect may be someone who regularly donates to organizations with similar causes, demonstrates a personal connection to your mission, and has the capacity to donate the amount that constitutes a major gift.
2. Qualification
After identifying prospects, nonprofits put their list through the qualification process, which narrows their focus to those prospects most likely to give. This step ensures your nonprofit prioritizes its most promising candidates and increases your chances of connecting with the right individuals.
For example, let’s say you have a list of 10 prospects who have consistently given to nonprofits with similar causes. While these individuals have demonstrated a possible affinity for your cause, wealth screening may indicate they aren’t financially capable of contributing a major gift. Instead, you might prioritize more qualified prospects based on their giving capacities and alignment with your mission.
3. Cultivation
Next comes the step our guide is focused on: cultivation. In this stage, you’ll use what you know about your prospects to build authentic relationships with them.
This is the stage where your communication with prospects begins, and there are a few key messages you’ll prioritize during this stage:
- Education. Introduce prospects to your mission and goals, explaining why your work is so important. Highlight the issue your nonprofit aims to solve and position your programs and initiatives as the solution.
- Inspiration. Motivate prospects by demonstrating the potential power of their support. Use stories, visuals, and data to show the tangible difference their contributions can make.
- Invitation. Explain your nonprofit’s needs, emphasizing the value of a collective effort to achieve a shared goal. Welcome prospects into your nonprofit’s community as partners in your mission.
Successful cultivation requires a thoughtful combination of these messages. Keep in mind that you’ll need a strategic plan for each message’s timing, activity, and audience (but we’ll get to that later).
4. Solicitation
Next comes the formal process of asking for a donation. Your nonprofit may host a dedicated fundraising event, or perhaps you’ll send personalized appeals to individual prospects. Either way, this step of the donor cultivation cycle determines whether your efforts were effective.
5. Stewardship
The cycle concludes with stewardship, which ensures donors feel recognized by your organization and see the impact of their donation. Thank-you notes, impact reports, and other personalized stewardship tactics can help you retain donors and send them back into the cycle. This way, you can continue evaluating their willingness and capacity to give, maximizing opportunities to upgrade their gifts and deepen their commitment to your cause.
How To Cultivate Donor Relationships
Understanding the aforementioned cycle is critical to deepening donor relationships, but one question remains: How do you move prospects through this cycle?
The answer is that there are four steps to cultivating donor relationships:
1. Implement Relevant Technology
First and foremost, your nonprofit must be prepared to track interactions with prospects and manage donor relationships at scale. You may connect with hundreds or thousands of prospects, and a simple list of contact information won’t suffice when it comes to personally engaging each one of them.
Research and invest in technology dedicated to prospect and donor management. Here are some specific solutions you should look for:
- Prospect research tools. As we mentioned earlier, prospect research is the process that launches the donor cultivation cycle. Technology supports this process by automating the research for you and flagging potential donors. While various prospect research tools are available to nonprofits, a donor news alert service, like Insightful Philanthropy, is the most effective way to learn about your prospects.
- Constituent relationship management (CRM) software. CRM systems consolidate donor information into a single database, allowing nonprofits to track each donor’s activity and preferences. As a result, your organization can use this data to send personalized communications that are more likely to strengthen donor relationships.
- Event management software. If you plan to use events as a cultivation strategy, you’ll need the right software to expedite the planning process. From ticketing to marketing to volunteer tools, event management solutions are purpose-built to streamline nonprofit events. More importantly, they collect information about event attendees, which can help your nonprofit gather critical donor information.
Recent studies show that nonprofits overwhelmingly rank a lack of process automation and organizational efficiency as a top internal challenge, which is why your organization must implement the right tools before launching your donor cultivation plan. The right tools support your cultivation efforts by streamlining essential processes.
However, not all technology automates tasks critical to deepening donor relationships. For example, Google Alerts allows nonprofits to manually track keywords relevant to donor information, but only a donor news alert service provides automated, real-time notifications about specific individuals.
Turn donor data into deeper relationships.
See how Insightful’s comprehensive news alert service helps nonprofits connect with prospective donors.
2. Segment Prospective Donors
While the indicators revealed through prospect research and qualification can reveal promising candidates, you won’t build relationships with donors by reducing their identities to a few broad characteristics. Personalization is the key to humanizing your outreach efforts, and it starts with grouping similar prospects together.
Use data from your CRM or donor database to create segments of potential donors based on shared characteristics, such as:
- Demographics
- Interests
- Engagement history
Identifying these groups allows you to create tailored messages based on a clear understanding of who your prospects are and how to engage them effectively.
3. Create A Donor Cultivation Plan
Next, outline how you plan to engage with prospects in a formalized cultivation plan. This plan should be a well-defined roadmap that helps your team prioritize the activities that yield the best results. However, it should also be flexible so that your plan adapts to changing circumstances, like communication timelines or donor interests.
A donor cultivation plan has three main components: timing, language, and audience. Here’s an example plan to help you get started:
Timing. The cadence your cultivation efforts should follow
- Month 1
- Month 2
- Month 3
Activity. A diverse range of tactics planned to engage prospects
- Send a personalized welcome email or letter that introduces recipients to your nonprofit’s mission
- Share an impact report or success story via email
- Invite prospects to an event showcasing your organization’s programs and available volunteer opportunities
Audience. The group of recipients your message will target
- New prospective donors
- High-capacity prospects
- Engaged mid-level prospects
In addition to mapping out your cultivation plan, set goals for each planned interaction. For example, perhaps you hope to move a prospect to a new stage of the cultivation cycle after a series of actions. Or, maybe you’ll aim to secure an initial gift after a predetermined timeframe. Setting specific goals enables you to measure the effectiveness of your efforts and adjust your approach as needed.
4. Delegate Cultivation Tasks
Effective cultivation is a team effort. Your nonprofit must distribute responsibilities to appropriate team members to ensure no engagement opportunities are overlooked.
Evaluate the tasks in your cultivation plan and determine who on your team would be best suited for the role. Here are some examples:
- Prospect researchers: Identify new potential donors and analyze their behavior to inform segmentation and personalization strategies.
- Marketing and communications team: Draft, automate, and send welcome emails to new prospective donors with educational information about the organization’s mission.
- Record managers or gift officers: Monitor donor news alerts for relevant events and contact donors accordingly. For example, offer condolences or support upon receiving obituary notifications.
- Development director: Provide updates about the impact of donors’ contributions through dedicated impact reports or success stories.
- Executive leadership (CEO or executive director): Host exclusive donor appreciation events and send hand-written thank-you notes to top-tier supporters.
Keep in mind that the technology you implemented in step one is critical to ensuring team members can execute these roles. For example, you’ll need a donor news alert service with obituary alert capabilities to receive timely notifications and respectfully offer your condolences. Better yet, this technology should allow you to filter alerts so that you’re only notified upon someone’s passing. This way, your team can remove the noise of other news.
5. Review And Revise Over Time
As donor preferences and your nonprofit’s goals evolve, so should your cultivation plan. Periodically evaluate your cultivation efforts over time to ensure they’re as effective as possible. This may involve:
- Conducting team reviews of your plans and progress.
- Gathering feedback from donors to understand their experiences.
- Experimenting with new, creative approaches.
Use this data to track prospects’ responses to your efforts and determine which donor cultivation strategies are most effective.
This is also where having the right tech can make or break your efforts to build strong donor relationships. Tools that automate prospect research for your team can continuously monitor donor data to flag relevant changes that may impact your cultivation efforts.
For example, Insightful’s donor news alert service delivers real-time donor intelligence from often overlooked sources, such as SEC filings and obituaries. By flagging critical changes to donor data, nonprofits can more appropriately tailor their cultivation efforts. A prospect whose cousin recently passed away, for example, may want to donate in their honor.
Expert Insight: Your Nonprofit’s Support Network Hinges On Donor Cultivation
At Insightful Philanthropy, our motto is “Know More. Raise More.” That’s because fundraising isn’t simply about the dollar amount—it’s about building strong relationships with others who are passionate about your cause. The more you know about your donors, the stronger your relationships will be. With stronger relationships comes more willingness to give and to be involved.
Get started with prospect research software today so you can begin to learn about your nonprofit’s supporters.
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