BlogFundraising Mastering Donor Development: Essential Strategies for Sustainable Fundraising Fundraising Mastering Donor Development: Essential Strategies for Sustainable Fundraising Author: Marlena Moore November 29, 2024 Contents 🕑 11 min read Nonprofit fundraising is so much more than just asking a potential donor for money; it’s about creating a relationship centered around your mission. Think about it: if a stranger asked you for money, saying it’s for a good cause but didn’t explain the cause or introduce themselves, would you give? What if this person was a friend or gave a background on why the money is needed and the difference it would make? Chances are you’d give to someone you know or a cause you’re familiar with. This is why the most effective fundraising strategies will start with donor development; nurturing donors into loyal supporters of your organization. Want to know how you can build these relationships with your own donor base? Keep reading, and we’ll explore the essential strategies and best practices for mastering donor development, creating sustainable growth and long-term success for your organization. Before We Begin Let’s take a moment to think about how things are for you now. Ask yourself the following about your nonprofit: Where are you now? What are your current fundraising strategies? Where do you want to be? What are your goals? Once you’ve finished this article, consider preparing a nonprofit fundraising plan to make everything go more smoothly. Don’t forget to incorporate the ideas in this blog so you can develop a diversified fundraising strategy. Let’s get started! What Is Donor Development? Donor development is the process of building long-term relationships with your donors. To do this, you must understand their motives, engage with them regularly and foster a sense of community and partnership. You mustn’t just ask for money; proper donor development empowers your supporters to become true advocates for your nonprofit and its mission. The Four Most Common Types of Donors Every fundraising organization should take the time to learn about the different types of donors. You have individual donors (most common nonprofit donors), major donors, corporate donors and foundations. Use our tips about creating a donor development strategy for each type, as a relationship can be built with all. Understanding the Donor Cycle Understanding the donor cycle will help you build your donor development strategy. It will give you an outline of how to find, engage and keep new donors. Step One: Donor Identification Build a list of potential donors for your fundraising organization. You can find a lot of potential donors, look at: Individuals from your existing donor base (current and lapsed) Those who interact with your organization’s social media accounts Referrals from current donors or board members Attendees from fundraising events Those visiting your website, subscribing to newsletters and checking out your resources Step Two: Donor Qualification Take your list of potential donors and turn it into a shortlist. Look at each of a potential donor’s Capacity: measures a prospect’s ability to give financially Affinity: gauges how closely a prospect’s interests align with your cause Propensity: the chance a prospect will give to your organization This will help you determine which type of donor they might become. Step Three: Donor Cultivation Take the time to build a relationship with your potential donors. The best way is to communicate with them regularly and genuinely to persuade them to give to your nonprofit organization. Use personalization in your communication Storytelling in newsletters, social media posts, or events that show the tangible impact of donors’ contributions Invite them to volunteer with you at an event, for a project, etc. Educate about your organization, your mission and how donations are used Host kick-off and wrap-up events for your fundraisers Want to dive deeper? How to Step Up Your Donor Cultivation Strategy: 14 Useful Ideas Step Four: Donor Solicitation Move your efforts from prospective donors to active donors by soliciting them directly. You can do this by being direct and specific, expressing a sense of urgency. Donor solicitation can come in many forms, the most popular being an email, but direct mail can be just as effective. Remember the 4 types of donors when asking for a donation – your appeal strategy may differ depending on who you’re asking. Regardless of your audience, donor solicitation should include: Friendly introduction Make your appeal Include your goals and impact Clear CTA to make a donation We highly recommend looking at these resources if you’re struggling when asking for donations: Effective Nonprofit Fundraising: How to Ask for Donations Like a Pro How to Write A Donation Letter (+ Examples & Template) What Is a Solicitation Email and How To Write One + Examples! Step Five: Donor Stewardship The stewardship step is acknowledging and thanking donors for their contributions, both big and small. This is done through thank-you letters, donor recognition in reports, newsletters, social media and donor events. A successful donor stewardship plan might look a bit like this: First 24 hours: Call the donor or send them a quick email to thank them for their gift First 48 hours: Send the donor an official thank you letter in the mail, including a tax receipt First month: Deliver a welcome package with everything the supporter needs to know about being a part of your donor community Donor stewardship aims to keep your donors engaged and invested in your organization. Nurturing them to become recurring donors and hopefully giving another more significant donation next time. Read more: How To Create an Effective Donor Stewardship Program in 8 Simple Steps Benefits of a Donor Development Strategy Now that you understand the donor cycle let’s go over the benefits your organization will see with a strong donor development strategy. There are more benefits of fundraising than just raising money. Just the act of fundraising itself provides you with the opportunity to incorporate gratitude and stewardship and bring together a group of people for the greater good. But that’s not all; there’s more. Networking Opportunities Networking is the act of collaborating with other like-minded entities, such as nonprofits, businesses and organizations, to build new donor connections, additional collaborations and gain access to a broader donor base. Positive Public Exposure Fundraising is an excellent way for your organization to generate positive media coverage and publicity, not just for you but also for your causes. This, in turn, builds trust within the community and helps improve your organization’s reputation. Demonstrates Corporate Social Responsibility Fundraising highlights your organization’s commitment to corporate social responsibility and dedication to making a difference in the community beyond just generating profits. Creating a Sense of Purpose Fundraising for worthy causes helps encourage and engage your employees and volunteers and gives them a sense of purpose. It also builds a sense of camaraderie with everyone involved, including your employees, volunteers, the community and everyone who is helped by your efforts. Everyone comes together for the greater good. How to Build a Donor Development Strategy Now, let’s get down to the nitty-gritty of building a donor development strategy. The following will provide you with some great tactics and techniques. You can use these step-by-step or in any combination that ultimately gives you the best results for your specific organization. Identify Donors Identifying potential donors requires a combination of research, outreach and engagement tactics. You must also be persistent and creative in identifying and nurturing relationships with potential donors. Conducting some research is the best way to identify potential donors. Look for those with a history of giving to similar causes. Check donor databases and use prospect research services to help identify potential donors. You can also engage with your current donors to ask for recommendations and referrals. Ask them if they know anyone who would be interested in donating. Use social media to identify potential donors who are currently interested in causes that are similar to yours. You can also search relevant hashtags and keywords to find people who are talking about similar issues and solicit them. Segment Donors Once you’ve secured your donors, provide them with a donor welcome package. Then, consider segmenting (categorizing) your donors by similarity to help hyper-target your fundraising messages. Doing so will enable you to focus your fundraising message on things each individual group would be most interested in and, in turn, will be more likely to respond to. Donor Segmentation by Similarity Here are some example segments to consider. By gift amount. By donor age. By donor frequency. By donor recency. By donor type. By length of relationship. By preferred type of communication. By volunteering activity. Segmenting your donors will help you maximize your impact because you’ve tailored your fundraising strategies and communications to different donor types. Segmenting your donors will also help improve your donor retention rates. Read more: 4 Ways to Make the Most Out of Your Donor Data Communicate Regularly: Donor Stewardship Donor stewardship is all about consistently engaging with your donors. It’s important to build strong relationships by sincerely thanking them for their gifts and sharing a clear picture of how that gift positively impacted the cause. It’s also imperative to ask for their feedback. Asking for their feedback will make them feel valued and connected and let them know they are an essential part of your organization and its causes. Read more: How To Create an Effective Donor Stewardship Program in 8 Simple Steps Recognize and Appreciate Every Donation You know the old saying, “Recognize what you want repeated.” Well, the same thing goes for your donors. Find as many ways as you possibly can to recognize them. You can recognize your donors through social media shoutouts, highlight them on your website, in your newsletters, send them thank you letters, etc. Read more: Donation Acknowledgement Letters 101: How to Write One + Template Challenge your team to come up with new ideas and ways to recognize your donors and reward those team members for their contributions. The more unique the ideas, the better because the uniqueness will help make your organization memorable and remain top of mind regarding future donations. Personalized Outreach It’s crucial to personalize your outreach efforts. Yes, this takes a little more time, but it’s well worth the extra effort. Always use the person or contact person’s name when making phone calls. Sending handwritten thank-you letters is another great way to add a personal touch. Set up an important dates calendar so you can contact each donor on their birthday, anniversary, retirement, graduation, etc. You can call, message, send a card, gift, or other means of wishing them well. This will show that you care about them personally and not just their donations. Share Impact Reports Sharing impact reports with donors provides transparency, builds trust, and shows appreciation. It also engages donors and makes them feel like they are part of something special while motivating them to continue supporting your organization. Sharing donor impact reports also gives you and your donors a chance to celebrate the success you’ve both achieved. VIP Treatment at Fundraising Events There’s no better way to make your donors feel appreciated than to give them VIP treatment at events. Here’s how: Give them exclusive early access to the event. Designate a special seating area for them. Host a pre-event VIP happy hour. Provide them with gourmet foods and drinks. Give them backstage tours and access. Provide special perks like gifts, thank you cards, etc. Offer an exclusive concierge service. Give them VIP event badges. Highlight them on a donor wall and in your print and digital materials. Offer Engagement Opportunities Engaging your donors is a great way to keep them vested in your organization. You can keep them involved by giving them the opportunity to volunteer, plan and attend events, and ask them for their opinions, feedback and new fundraising ideas. Offer to put them in charge of certain aspects of your event, include them in community outreach and anything else you think would work for your fundraisers. Host Donor Events Host events to honor your donors. You can do a meet and greet with beneficiaries. Conduct donor stewardship through events like Happy hours Mixers Luncheons Benefit dinner Cooking class or wine-tasting “Coffee with the CEO” or Executive Roundtable Ask for Their Opinions Conduct regular check-ins with your donors. It’s important to ask them for their opinions and feedback about each event. Then, ask for suggestions on what they think could be built on and improved for the next event. Reach Out to Lapsed Donors Lapsed donors are much easier to approach because they are already familiar with your organization and have a connection with you. But for whatever reason, they haven’t donated in a long time. So, all they need is a little reminder in the form of an upbeat, friendly lapsed donor letter. Tell them you miss them and make your letter as personal as possible. Then, provide them with a clear next step they can follow to donate. Incorporate Legacy Gifting Legacy gifting, also known as a bequest or a planned gift, is when individuals donate to a charitable organization as part of their estate plan or will. The legacy gift could be an annuity, a trust, a retirement fund, or even proceeds from their life insurance. Legacy gifts enable individuals to leave a final donation to a cause they care deeply about after their passing. You can start by creating a legacy gift strategy. Then, build a legacy gift page on your website. Promote your legacy gift program and track your progress. If you want to make things easier, utilize the right software, such as WildApricot. Doing so will help you keep track of your donors’ interests, communication preferences, contact information, donor history, gift dates and amounts and more. Not to mention automating a variety of administrative tasks like issuing tax receipts, etc. Learn everything you can about legacy gifting so you can achieve the best possible results from your efforts. Offer Positions on Your Team Offering your donors permanent positions on your team will ensure you maintain that donor relationship for years to come. You might suggest an ambassador, advisor, board member or any other high-profile role that makes sense for your organization. And, if you don’t have a suitable position available, consider creating an honorary position specific to their interests, strengths and donor involvement. What’s Next? These are just a few ways to build your donor development strategy. Think outside the box to come up with a few ideas of your own. You can do that by looking at other industries. What tactics and techniques do they use to sell their products? How do they get people to act on their offers? Then, ask yourself why that particular tactic or technique works and how to use it for your nonprofit’s fundraising goals. You will be surprised at what you come up with. Additionally, if you do that, you will be using a new tactic that no other fundraising organization uses. That will help you grab a donor’s attention because they haven’t seen or heard that tactic before. It also makes you memorable and gives you an advantage because it’s unique. Your donors will appreciate your efforts and generally find new approaches refreshing. Resources to Help Your Donor Development Here are some resources that will help with donor development. These are invaluable resources you don’t want to miss! So, please take a few extra minutes to review them and consider adding them to your donor development strategy. How to Create an Effective Donor Stewardship Program in 8 Simple Steps 3 Ways a Welcome Package Can Affect Your Donor Relationships How to Prepare a Nonprofit Fundraising Plan + Template How to Step Up Your Donor Cultivation Strategy: 14 Useful Ideas 4 Steps to Writing the Perfect Lapsed Donor Letter + Template Simplify and Automate Processes with WildApricot Would you like to simplify and automate your fundraising, donor development and donor cultivation efforts? WildApricot can help! What Is WildApricot? WildApricot is an extremely powerful cloud software that will help automate and simplify your membership tasks and data all in one place. It also allows you to easily search, update and share your database with your entire team from any device! Check out all our features here. Who Does WildApricot Serve? WildApricot serves the following organizations. Associations (Association Management Software) Nonprofits (Nonprofit Management Software) Clubs (Club Management Software) Chambers of Commerce (Chamber Management Software) Charities (Charity Management Software) WildApricot is trusted by 15,000+ organizations, and we’d like to earn your trust, too! Reach out today! Start a FREE 60-Day Trial Now Related Fundraising Articles Fundraising 🕑 8 Min Read Donation Acknowledgement Letters 101: How to Write One + Template Fundraising 🕑 10 Min Read Prospect Research Guide for Nonprofits Fundraising 🕑 15 Min Read The 20 Best Holiday Fundraising Ideas for 2024 The Membership Growth Report: Benchmarks & Insights for Growing Revenue and Constituents Get the report now!