If you’re not raising as much as you think you could at your non-profit, chances are that you need to strengthen your donor funnel. The donor funnel is a key concept to understand – and use – for all non-profit organizations.
What is the Donor Funnel?
The donor funnel is a simple, 4-step process that organizations use to turn prospects into long-term donors. The funnel has four components:
This is the process of identifying new potential donors to the organization and approaching them for the first time to introduce them to your non-profit. Your prospect list can be generated from any number of different strategies, including seeking referrals from board members and donors, engaging in direct mail prospecting, seeking “warm” introductions to local business leaders, attending networking events, etc.
The cultivation step includes all of the communication you do with the prospect after that first meeting, and all of the tactics you use to build a relationship with your potential donors. Your cultivation strategy can include different types of donor communications, including face-to-face meetings, phone calls, newsletters, e-mails, non-ask events, etc.
This step is where the rubber hits the road. You’ve built a relationship with your prospect, now it is time to ask the prospect to make a gift to your non-profit. For larger donors, your asks will probably be face-to-face or over the phone. Other donors can be asked through letters, e-mail, or by being invited to a fundraising event.
If the prospect said, “yes” and made a gift, you move into the stewardship phase. This step is very similar to the cultivation stage, in that you are seeking to continue building a stronger relationship with the donor. The first part of stewardship involves thanking the donor and recognizing them for their gift. You will then want to continue communicating with them and building the relationship. Your goals for the stewardship phase are to ensure that the donor (a) continues to give, (b) upgrades by giving more next year, if possible, and (c) refers their friends and colleagues to become new prospects for your organization.
The Science Behind the System
The 4 step donor funnel is based on the past century of professional non-profit fundraising. It has become clear, during that time, that non-profits omit steps at their own peril. Every organization is different and will use different tactics as part of their funnel (e.g. some non-profits may eschew events, while other will find great success with them). That being said, all 4 steps are important. Don’t try to move directly from prospecting to asking, and don’t try to skip stewardship by making ask after ask without any additional relationship building.
Many non-profits have found it useful to build numerous, defined donor funnels to systematize their fundraising efforts. These organization build different funnels for various donor groups, such as high-dollar donors, mid-level donors, low-dollar donors, corporate donors, etc. This way, when the non-profit identifies a new prospective donor, they can simply move the prospect into one of the pre-defined donor funnels, and not have to reinvent the wheel by creating custom funnels for each new donor.
This year, take a look at your non-profit’s fundraising strategies and tactics, and see how well your donor funnel is performing in its ultimate goal, which is to provide the funding your organization needs to thrive.
Photo Credit: muffinn