Understanding the Fundraising Cycle

Donor Acquisition and Retention

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To be the most effective fundraiser that you can, it’s important to know about the fundraising cycle. The fundraising cycle or donor cultivation cycle is the key to gaining, engaging, and retaining donors. It can help you cultivate strong relationships with your donors and increase your donor retention. In other words, it’s how you make and keep your donors happy. 

The fundraising cycle has six stages and is the key to your fundraising success. Throughout the fundraising cycle, your focus will be on engaging and building relationships with your prospects. Here are the six steps of the fundraising cycle that will help you turn potential supporters into lifelong donors. 

Building a recurring giving program that nurtures and expands donors'  relationships with your nonprofit will set you up for success now and for years  to come. Download the Radical Recurring Giving Guide to find out how!


The first step of the fundraising cycle involves finding the donors and potential donors you want to cultivate. If you’re not sure where to start, consider the people in your network who would be most likely to support your organization’s mission. Then, ask your team to do the same with their networks as well. 

Once you’ve exhausted your personal networks, start conducting prospect research. Collect data about your current donors and potential donors including information like their age, backgrounds, wealth indicators, giving histories, and motivators. You can then use that information to determine whether your potential donors are able and willing to give. 

A helpful tool that can aid you in organizing the data you collect is a CRM database. With a good nonprofit CRM platform, you can store and organize all of your data and use it to segment your donors with different filters. This is a cycle, so storing all of your data somewhere you can come back to and revisit will help you maximize your time and make the identification step easier. 


Once you’ve completed your list of potential donors, it’s time to start narrowing it down and prioritizing the donors you want to cultivate first. Look at factors like how invested your potential donors are in your mission, whether they’re likely to donate, if they’re able to donate, and how they’d like their donation to be used by your organization. 

During this step, don’t forget to consider what donation methods your potential donors prefer. Do any individuals prefer giving cash over making a credit card payment? Are digital wallets popular in your donor base? Is there a lot of interest in cryptocurrency? These are important things to consider and remember as you move forward through the fundraising cycle. 


Cultivation is one of the most important steps in the fundraising process. Once you’ve prioritized your list of donors, it’s time to start building a relationship with them. This is the step where you treat the donor as a whole person and cater to their interests.  

Engage your donors by sharing resources, articles, and stories with them. Invite donors to activities and events you’re hosting to give them an idea of how your nonprofit raises money. You can also invite your donors for a behind the scenes look at the work your organization does by extending volunteer opportunities or giving them special access.  

While you’re engaging donors, ask them to share their thoughts, opinions, and any feedback they have. Send out surveys or meet one-on-one with donors to get to know them better. Keep track of all your interactions with potential donors, and make sure you keep note of what they share with you. 

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Now that you’ve laid the groundwork and built a solid relationship with your potential donors, it’s time to ask for donations. With all of the information that you’ve gathered about your prospective donors in the first three steps, tailor your asks to their communication preferences, whether they prefer direct mail, email, text, social media, one-on-one meetings, or any combination of channels. 

Personalizing your ask is a very effective way of encouraging your donors to give. Rather than sending out communications en masse with general language, try to put your donors’ names on every piece of communication. You can also suggest appropriate gift amounts based on your prospects’ financial backgrounds, so they don’t feel pressured to give more than they’re able or comfortable with. 


Thanking your donors is integral to retaining your donors and continuing to build strong relationships with your donor base. Every time someone makes a donation of any size, make sure to send a thank you email or even a handwritten note or phone call. Recognize your donors by putting their names in a public place like your website and in your annual report. When you host events, make sure to invite your donors and recognize them in event programs. All of these actions make your donors feel valued by your organization and will strengthen your relationship with them! 

Another way to show your donors you value their support is by being authentic and transparent about how you’re using their donations. Demonstrate your donors’ impact by posting pictures, videos, and stories about how their gift is being put to work on your social media accounts and in nonprofit-wide newsletters. With this kind of transparency, your donors will trust you and will be more likely to continue donating in the future. 

Download these donor appreciation email templates to help you build stronger  relationships with all of your donors!


Now that you’ve created a relationship with your donors, it’s time to ensure your donors stay engaged and connected with your organization. Continue recognizing donors and showing your appreciation for their support regularly. Implement regular stewardship activities in your nonprofit like sending birthday wishes and holiday cards to your supporters every year and compiling reports for your donors on the work they’re helping to make possible.  

Just because you’re at the end of the cycle, that doesn’t mean that the work stops here. Even as you steward your donors, remember to put them back through the cycle so you can continue building strong relationships with your donors and give them opportunities to upgrade your support. 

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Final thoughts 

Not every nonprofit’s fundraising cycle will look the exact same, but just remember that the cycle is a never-ending process. While it does take time to run donors through the process, your outreach to potential donors and upgrades to existing donors should always be an ongoing effort. Ultimately, by focusing on the fundraising cycle, you’ll be able to cultivate lifelong supporters for your mission and continue growing as an organization. 

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