3 Misconceptions About the Donor Lifecycle
The concept of the donor lifecycle has been around for years. But the way many people view the lifecycle and integrate it into their fundraising and donor management leaves much to be desired.
Frankly speaking, the donor lifecycle hasn’t taken the position of importance that it should – largely because the way it’s been portrayed leaves gaps in the donor experience.
Let’s look at 3 of the ways the donor lifecycle has been misrepresented, and how it should be viewed instead.
Misconception – The Donor Lifecycle Is A Complete Loop
Many people view the donor lifecycle as a loop. The donor first gives, then is nurtured, retained, and their giving is increased. Then they recycle through the process.
I get it – it’s the donor life cycle. So a loop makes sense. But let’s think outside the box for a moment.
The problem with this train of thought is that it brings – whether consciously or subconsciously – this idea that a donor reaches a finish line. They’ve reached the end, and now you don’t need to engage with them anymore. Or, you need to engage with them like you did at the beginning, trying to get them to give again.
This point of view can be exemplified in this circular chart.
You see a clear entry point, then the donor goes through the various levels of giving and engagement, ending with “Ultimate giving”. And that’s just it – this ending creates a subconscious thought process that you’re finished developing this donor relationship for now, and you need to pick it back up when they re-enter the cycle.
Reality – The Donor Lifecycle Is Continuous
A more realistic way of looking at the donor lifecycle is in a continuous motion. You’re never finished developing a donor – at least you should hope to stay in touch with them continuously.
Donor engagement continues to ramp up from the moment the donor is first introduced to your organization. Your relationship with the donor should never reach a peak, only to be left alone at the top. As donors become more engaged with your organization, they continue to be upgraded, whether that’s in their giving, involvement, advocacy, fundraising, or volunteering.
This view of the donor lifecycle can best be display in this chart.
The continuous line shows how the contact is nurtured over time. And get this – there is never an end. When the donor has “reached the top”, they continue to advocate for your cause and support you – even if their financial giving has reached its capacity.
Misconception – Retention Is the Most Important Part of the Lifecycle
Donor retention has long be touted as the most important piece to fundraising.
Go ahead – enter “donor retention” into Google, and see how many thousands of pages show up about strategies, ideas, metrics, tips, tools, software, companies, conferences, podcasts, videos, articles, blogs, worksheets, PDFs – all centered around this concept of retention.
For clarity’s sake, I’m not proposing that retention isn’t important. It’s 100% important, and vital to any nonprofit’s success. But it can’t be everything. If retention is the only part of the donor lifecycle you focus on, eventually your donor base will age out, and you’ll be left trying to scrape together a new foundation of donors while hemorrhaging support.
Reality – Retention Is An Important Stage in the Donor Lifecycle
The reason why retention has been so publicly highlighted is its ability to be measured, and to directly correlate the success of your donor retention to the success of your fundraising.
Since the cost of nurturing a second gift from a donor is drastically less than the cost of a single gift, it only makes sense that retention should be focused on. However, if you’re just trying to keep donors from lapsing, or simply to give another gift, you’re missing out on the synchrony of the entire lifecycle.
Retention is influenced by everything you do in the donor acquisition stage. And vice versa. If you can find out what’s working well in your retention efforts, you can implement these successes earlier in the lifecycle to improve your acquisition.
If you focus on just one part of the lifecycle, your donor base will suffer. If you view the lifecycle holistically, you can begin optimizing your list of donors to become more involved and better supporters.
Misconception – Nonprofits Should Only Nurture Donors
It’s very common for organizations to overlook the importance of nurturing their entire database, not just their donors.
Yes – nurturing the relationship you have with your donors should be the #1 priority. But that shouldn’t be the only focus.
If you’re only relating to your donors, your acquisition will suffer. You’re missing out on tons of potential donors that could be converted to donors if nurtured well.
Reality – Nonprofits Should Nurture Segments of Their Database
With modern fundraising and donor management tools, there’s no reason why your nonprofit should be overlooking non-donor groups.
Your organization should actually have some content marketing initiatives that simply collect contact information. You can do this by inviting people to sign up for your email list on your website, or by collecting registration information at events that you host or partner with. Even events like galas, where you’re hoping to gain a donation from everyone that attends, should be followed up by communication with people that did donate and people that did not.
This segmentation of contacts and donors will help you create trust with these pre-donors, as you show them information about your nonprofit that is specific to their giving potential. You’re not trying to show them the impact their gift has made, but the impact their gift could make.
Should these pre-donors be given as much attention as your donors? Probably not, but it depends on the quality and health of your donor base. They should be given some attention, however, no matter how many healthy donors you have.
Finding and Solving More Donor Lifecycle Myths
There are plenty of other ways your organization may have been thinking about the donor lifecycle that is holding your fundraising back from growth. As you know, donor management is extremely hard – there’s always plenty to do, and it’s difficult to know where to start and how to spend your time.
We made a comprehensive donor lifecycle guide that walks you through very practical metrics and actions based on your nonprofit’s donor lifecycle. It doesn’t quite do the work for you, but it gets very close, providing actual steps to begin nurturing your entire donor lifecycle and increasing your donor engagement. (Plus, we’ll give you a free donor lifecycle worksheet to help you get started.)