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Home Fundraising Understanding The Donor Lifecycle

Understanding The Donor Lifecycle

by Bryan Halverson
Header graphic for article explaining the lifecycle of a nonprofit donor

Having a plan for donor acquisition, retention, and upgrade is essential for fundraising campaigns and any nonprofit organization. The donor lifecycle is a multiphase process that helps nonprofits identify and track individuals from the moment they express interest in your cause to the moment they become long-term supporters.

The donor cycle typically consists of three stages: acquisition, retention, and upgrade. Each stage presents different challenges and opportunities for engagement. By understanding the donor lifecycle, you can create a plan for how to best communicate with individuals at each stage.

By understanding the three stages of the donor lifecycle, nonprofits and fundraisers can design strategic communications and fundraising efforts that will be successful in engaging potential donors and keeping them involved with your mission.

Acquisition

The acquisition phase is the most expensive and difficult stage of the donor lifecycle. This is when nonprofits must work to identify the right donors and cultivate a donor relationship. The goal of the acquisition phase is to turn those who have expressed interest in your organization into first-time donors.

Not all methods of donor acquisition will be equally effective, and they will vary in cost. The most important thing in this part of the lifecycle is to identify the prospects that have the best chance of reaching your target audience. Once you have identified your audience, you can begin to develop a strategy for acquiring the first gift.

After you’ve acquired a new donor, it is important to move them into the next stage of the donor lifecycle as quickly as possible. Donors who do not receive timely and relevant communications after their initial gift are more likely to become lapsed donors.

Retention

The retention phase of the donor lifecycle is when nonprofit organizations work to keep donors who are giving money engaged with their mission so that they will continue to support the organization over time. Retained donors give more frequently and at a higher level than lapsing donors, so retaining donors is essential.

It is cheaper and easier for nonprofits to use donor information to retain a donor than it is to acquire a new one, so it is important to focus on building relationships with donors during this stage. Donors should feel like they are part of your mission and that their support is making an impact.

Retention efforts will vary depending on the type of donor. Some common retention strategies include sending thank you letters, hosting events, and sending updates on the impact of their donations. Donors should also be given opportunities to increase their level of support so they can continue to feel invested in your mission and organization, which brings us to the next phase.

Upgrade

The upgrade phase is when current donors are encouraged to increase their level of support for your organization. Donors who are upgraded would then give more frequently or at a higher level, or both, so it is important for nonprofits to invest in a relationship with the donor.

There are many ways for nonprofits to engage donors to upgrade their level of support and planned giving, but the most important thing is to make sure donors feel like their additional donation will make a difference. Donors need to see that their increased donation will have a tangible impact on your mission.

Some common upgrade example strategies include sending impact reports, hosting special events on social media, and involving donors in your planning process. Donors should also be given opportunities to designate their gifts to specific programs or areas of need.

The donor lifecycle works the same way no matter what type of organization is doing the fundraising. It’s an essential concept for any nonprofit organization to use in creating a strategy for donor engagement. By understanding the donor lifecycle, nonprofit organizations can create a plan to best communicate with individuals at each stage. This will help you to acquire new donors, retain existing donors, and upgrade donors who are able to give more.

Tools To Help Your Nonprofit Acquire, Retain And Upgrade Donors

The long-term health and success of your nonprofit rely heavily on the ability of the organization to solicit donations and keep them coming for the foreseeable future. In order to acquire these valuable donors and establish the rapport necessary to help them engage, many successful nonprofits utilize donor management tools that can drastically improve efficiency while accelerating the growth of your organization.

Aplos has created a solution that is specifically designed to address the fundraising needs of nonprofits. With Aplos, you can:

  • Improve donor engagement
  • Retain more donors
  • Easily track donations
  • Optimize your fundraising efforts

See why over 40k nonprofits trust Aplos for their fundraising and accounting needs.

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