What Is the Fundraising Cycle and How to Convert More Donors

James Martin
What Is the Fundraising Cycle and How to Convert More Donors

Fundraising isn't simply a matter of reaching out around Christmas time for donations. With so many nonprofits competing for attention, donors have their pick of whom to contribute to, and the organization with the closest alignment to their ideals is only part of their calculations.

What's equally important is their experience with the organization and the relationship they form with those involved. Moving from a loose affiliation to an engaged stakeholder – whether a donor or a volunteer, or a champion of the cause – is a matter of following a series of stages along a path.

This path forms a cycle: the fundraising cycle, and from year to year, and each stage is an opportunity for your organization to maximize conversions. Want to know how? Keep reading!

The Fundraising Process and Concept of the Donor Cycle

Donors come in many forms and from many backgrounds. Donations can come in the form of grants, projects, or individuals and can come from both local and international sources. As such, the fundraising process requires an ability to scout out and evaluate these diverse sources and ultimately lead them along a donor journey that involves numerous stages.

From here, each donor needs to be qualified by metrics that expose their capacity and intent to donate and allow organizations to reach out and cultivate mutually beneficial relationships accordingly.

Nonprofits require robust fundraising programs that take into account these different styles of relationships and preferred donation types, understand the pathway that each donor takes from awareness to their contribution, and then onto the continuous relationship cycle with the organization.

This path will ideally lead to a conversion, at which point money or gifts exchange hands, and there is a follow-up of gratitude. This is the goal, but it is far from the end. At least, if handled well! Each of these stages requires an intelligent approach to identify and guide prospects to becoming donors and then hold onto them for the next iteration of the cycle.

So, developing your fundraising process and strategy is greatly helped by understanding this donor or fundraising cycle and how each stage leads to the next. When you understand the stages of this cycle, you are better able to tailor your efforts to target each donor stage. Here's how it breaks down.

The Fundraising Cycle in Five Stages

By breaking down the roadmap that each donor takes to a conversion, you'll be able to identify distinct steps along the way that tend to repeat each year as part of a cycle. The stages are all transitional, and the entire journey is sometimes broken into four, six, or even eight stages, depending on who describes it. The names of each stage may vary, but their purpose and description are consistent in each.

Here, we have chosen and named five key stages to focus on:

Stage 1: Identification

This stage is the initial investigative process, in which the nonprofit identifies its stakeholders, what is known about them, and whom the board knows.

There are two primary categories of stakeholders in the fundraising process: those who are familiar with you and your mission and those who, while their interests align with yours, do not yet know that you exist!

The stakeholders who already know about you are categorized as engaged, and these will comprise your board members, volunteers, donors, former donors, members, and anyone else who contributes to your organization and mission.

Your engaged stakeholders know you well, and they're on board with what you're doing.

The second category encompasses affiliate stakeholders, and they're people who haven't discovered you or your project yet. These people are unfamiliar with what you're doing and are likely totally unaware of your existence. What makes them a stakeholder, however, is that they share a belief or an interest with you. These affiliates are prospective donors, so it's important to focus your attention on them and identify what you know.

The identifying stage is where you gather as much information about affiliates as you can. What do you already know? Do you have the contact details of any affiliates? What are their interests specifically? Most importantly, if you don't know these things, how do you learn them?

Getting the board or other engaged stakeholders involved here is a good place to start. These people may have friends or family that they can refer to your organization.

Once you've gathered a list of these prospects, you'll need to sort them. That's what stage 2 is for.

Stage 2: Qualification

Your goal for this stage is to qualify the prospects with the highest potential to become valuable donors. This doesn't mean simply finding the prospects with the most money but weighing their wealth against their intent to donate.

To do this, consider both capacity and inclination.

A donor's capacity can be determined by available wealth. While someone may have estates worth vast sums of money, if they have very little in the way of liquid assets or income, they may have low capacity, despite being technically wealthy.

So, to determine capacity, consider various wealth and philanthropic indicators, some of which we will go over in the next section. Qualifying these leads in terms of wealth is only one part of the equation, and their inclination can be estimated by previous giving experience and their desire to get involved.

What you're looking for in this stage are donors with both a high capacity and a high inclination, and these will be your highest-value donors from the list formed in the Identification stage. Someone with high capacity but low interest may be second on this list, as these people can be introduced and engaged by your project to improve their interest.

On the other hand, people with low capacity but high interest are also particularly valuable. They may not have significant wealth to donate, but they may form the bulk of your long-term donor base or fill volunteer roles. They'll also be great at promoting your cause and will help you find more donors.

Qualifying donors in this manner allows you to identify how they can best serve your nonprofit and allows you to use them to the best of their abilities. Once you have this information, you can begin cultivating relationships with them.

Stage 3: Cultivation

This is the more social stage of the fundraising cycle, and it's where you will start forming personal relationships with your stakeholders. Cultivation is an intentional construction of these relationships, and it involves a thoughtful and targeted approach to presenting your mission in an understandable way that makes them feel like they have a position in it.

Building these relationships takes time and can't be forced. The idea is to build trust and establish a connection, so cultivation cannot be a rushed process. The purpose of this stage is to set the tone for the upcoming solicitation, to create an environment from which asking for their contribution doesn't seem forced and comes naturally.

Cultivation depends on a unique and personalized approach to every donor. There's no set blueprint for forming relationships with people, so you'll have to go by feel here. We'll provide some suggestions for how to do this in the next section.

Stage 4. Solicitation

This is the moment of conversion! And with all the stages preceding it, you can see already how it represents only a small fraction of the donor cycle. Of course, this small part is what it's all about, so it's a critical focus of your fundraising strategy.

The key to a good solicitation is the skill of asking for the correct amount of money and asking for it at the right moment. Achieving this relies on the previous three stages of the cycle going smoothly. Each individual may have a different way of soliciting that resonates with them the most, and it's your job to find out which way that is.

Where possible, solicitations should be done in person, but as this isn't always realistic, they can be done by letter, email, or phone call, with varying degrees of personalization.

At the other end of the spectrum, there are donation boxes and cold calls, which would be considered impersonal. These have their own strengths but are generally reserved for specific cases, often in which the donor cycle isn't relevant.

Stage 5: Stewardship

Now you've finally received your donation, and the fruits of your efforts are realized. The follow-up to this conversion is just as important as any other stage of the fundraising cycle. The relationship that you have cultivated is now at a critical stage, and stewardship means that it's time to express genuine gratitude to your new donor.

There are several ways to do this, beginning with plain old thanks. But accountability also plays an important role in this stage. This means showing them how you've spent their money and how they have contributed to the cause.

If this stage is done right, it will renew the cycle, and you'll get a second return on the initial investment you put into this round. Your new donors are now on record, you have a strong relationship, and they will be immediately qualified for the next round of the donation cycle, so don't skip this stage!

Now that all the stages have been covered, what's the best way to approach each stage, to maximize your chances of conversion?

How to Leverage Each of the Stages of the Donor Cycle to Improve Conversions

Each of the stages of the donor cycle brings with it an opportunity to fine-tune your fundraising strategy. Now that you understand the role of each, let's break it down again, this time with some specific tips on how to maximize the effect of the stage itself and create a smooth transition to the next one.

Stage 1 – Identification

Begin this stage, as we mentioned, by looking internally. Your engaged stakeholders may hold the key to finding your affiliates and converting them. In terms of outreach, use surveys and conversations to ascertain useful information relating to their values and capabilities that will come in handy in the next stage.

For the people on board already, you'll still have to put some attention into this stage. Values change, as does capacity, so it's important to keep your information fresh, even if the donors have been in the cycle for many years.

Stage 2: Qualification

To qualify your leads, consider the two major components of a high-value donor separately. Capacity is measured by wealth indicators, and inclination will be assessed using metrics of philanthropy. Here's how some of these might look.

The measure of how philanthropic someone is can be estimated by looking at past giving. If they're a previous donor, then you already know that they are happy to give, and you need to assess whether they will still be inclined; whether their values still align with yours.

If they haven't donated to your nonprofit yet, find out if they have donated anywhere else. Political giving and other nonprofit engagement history assessments can establish whether your prospects are likely to donate to your cause once they know enough about it.

For wealth indicators, take a look at some of the business affiliations they have or whether they own stock. Remember that stock can be given as a gift too!

While fixed assets might not be a sign of capacity, there is some indication that property value of a donor of greater than $2 million correlates with a 17x increase in the chances of a charitable donation.

Age, marital status, and education can also be indicators of both wealth and inclination, so keep these in mind too.

Remember to partition your prospects based on their scores to best allow you to make use of their strengths.

Stage 3: Cultivation

There are so many ways in which you can cultivate a relationship with your donors. The key features of this stage are trust-building and engagement, both of which are linked to one another and will enhance the donor experience, translating to greater donor retention and, therefore, more conversions over time.

Some of the key means to cultivate these relationships are by:

  • Informing them of your plans and upcoming events,
  • Inviting them to come and take part in the project or visit 'behind the scenes',
  • Involve them in your decision making
  • Asking for their thoughts

Using platforms for communication and automating various elements of this communication is a great way to keep up with a growing donor list and create enough space in your day to put the personal touches into your cultivation stage.

Rally Corp makes mobile communication with your stakeholders a breeze, allowing you to send tailored messages and updates to different partitions of your donors, engage and mobilize your supports via text, and use shortcuts like QR codes to connect, donate or sign up for information.

Keep in mind that if you are not sure what a donor thinks or how they want you to communicate with them, just ask. Rally Corp has pre-built surveys and forms you can use, so getting to this insight shouldn't be hard. Donor communication preferences need not be left to chance.

Stage 4: Solicitation

When it comes to tailoring your approach to the donors, there are no hard and fast rules, but there are some general guidelines. Each donor is unique; however, it's typically best to approach the highest-value donors face to face.

Face-to-face provides the highest chance of conversion across the board, but when there is a need to prioritize, spend this effort on the prospects with the highest capacity and intent.

For donors with a low capacity, you may benefit from soliciting with a less-personal approach. Phone calls, where appropriate, are the next best thing to face-to-face, but they're not always appropriate.

Your low-capacity, annual donors may respond well to a thank-you letter that will prompt them to renew. These approaches are manageable on a larger scale and still create value for those donors on the receiving end by offering an opportunity for recognition.

Again, consider using mobile message services like Rally Corp to streamline this process and use their professional fundraising message templates as a starting point. You can also give live updates in the form of a fundraising thermometer to show the immediate impact of the donation.

Stage 5: Stewardship

There's an overlap here between this and the previous section, and that's because of the repetitive nature of donations in the donor lifecycle. Essentially what this means is that the gratitude in the stewardship stage can be used as a function of the solicitation stage for repeat donors.

Leading donors through a feedback session is a great way to identify them as donors for the following cycle, so maximize the efficiency of this stage by offering a debriefing, during which you can discuss what went well and what could have been improved upon.

Continued communication is also valuable here so that the cultivated relationship you formed in stage three doesn't go cold. Keeping the relationship alive will keep the door for solicitation open to you when you need it next.

It is, after all, always about relationship.


The fundraising cycle is roughly broken down into five stages for attention. Each stage represents a slightly different discipline, designed to transition prospects or donors from the previous one to the next for the cycle to complete and restart.

Understanding these stages is the first step to using them to your advantage as a nonprofit, and by focusing on each one as a discipline, you'll be able to create value for your stakeholders at each stage of the journey; making conversion not only more likely, but more comfortable for both sides.

We hope you have found this article helpful. If we can help you, please don't hesitate to reach out.