Donor Cultivation and the Donor Lifecycle Map: A New Framework for Fundraising

By Deborah Kaplan Polivy

A fresh look at fundraising that depends upon the donor lifecycle, resulting in increased financial resources over time and a more stable bottom line for nonprofits

A guide to better and more strategic fundraising, Donor Cultivation and the Donor Life Cycle Map presents the donor lifecycle map, which is circular in form, revealing how the convergence of the two subject matters—cultivation and the lifecycle map—can lead to better and more strategic fundraising. Author Deborah Kaplan Polivy specifically addresses the topic of cultivation and how, when focused over the donor lifecycle, it can become a logical and focused activity for obtaining increasingly large gifts.

• Step-by-step guidance and practical tools for understanding and making the most of the donor lifecycle
• Coverage includes Introduction to Donor Cultivation, Defining Donor Cultivation, Donor Cultivation Tools and the Donor Lifecycle: How and Where They Intersect, and Impediments to the Implementation Process
• Features a companion website with a variety of online tools to help readers implement key concepts
• Part of the Wiley Nonprofit Authority Series

Donor Cultivation and the Donor Life Cycle Map seeks to change the perspective from transactional fundraising to recurring fundraising, beginning with the first donation and extending to the very last—an endowment that keeps on giving even after death.

• Language: English
• Publisher: Wiley
• Release date: Oct 16, 2013
• ISBN: 9781118603789

Book preview

Foreword

I was both pleased and surprised to be asked to write a foreword for this very helpful and thoughtful book on donor cultivation. I personally began raising money for nonprofit organizations in 1984. With almost 30 years of experience and having been involved in raising hundreds of millions of dollars, I find it odd that I don't think of myself as a fundraiser or a development professional. Virtually every senior position I have had for over a quarter of a century had a fundraising component. So why don't I see myself as a fundraiser and how can this book help you identify more intimately with the work that you do?

The relationship we have with donors is complicated. It is both strange and wonderful. That is why I find the term relationship-based fundraising problematic. Relationships are relationship-based. If I try to develop a relationship with you only for the purpose of getting money from you, we don't have much of a relationship, particularly if I do so under the false pretense of friendship. Fundraising is not a goal in and of itself; it is a manifestation and expression of the support people give you because of your credibility and trust and because they care about the mission of the organization you represent.

In this respect fundraising, or even financial resource development, is a necessary but insufficient description of the work of any fundraiser of worth. I don't see myself as a fundraiser because that is only a piece of what I do, even if it is an important and significant aspect of my work. Money facilitates the fulfillment of a vision; it is not its own goal. That is why it is critical to understand the role of money in the work that we do as nonprofit change agents. That is why it is critical to invest in people for the totality of who they are. That is why it is critical to read this book.

People may deride the role of self-help books in forming relationships. Why does anyone need a manual on how to have a good marriage, for example, when the ingredients of good marriage should come naturally between good people? It's a fair question, but it also has an uncomfortable answer. We read guides because although the do's and don'ts of any relationship should be obvious to us, they aren't. We are often in need of outside counsel and advice, particularly from those who have been successful in the trenches. If raising money required obvious skills, we'd all be a lot better at it than we are.

I found the following pages both comprehensive and an excellent framework for beginning a deeper conversation about the art and science of raising money. This volume is the first attempt that I have seen to describe the use of specific tools that should help in building genuine and meaningful relationships with donors as donors, regardless of the level or potential for giving you begin with. I have always been inspired by the Jewish tradition that tells us that someone who solicits charity has a greater share of divine reward than the one who merely gives charity. The solicitor doubles the contribution through his or her sacred work. Effective fundraisers understand that raising money to match our passions and even out the playing field of social justice is holy work and is a privilege.

Few people regard fundraising as a privilege. It's time to change that.

Dr. Misha Galperin

President and CEO

Jewish Agency for Israel

Preface

There are many different types of fundraising offices in many different types of organizations all over the world. There are those, as Dr. Polivy describes in her introduction, with names of donors on Rolodex cards somewhere in a back office. And on the other end of the spectrum are organizations with large and sophisticated philanthropy departments with full-time staff responsible for the proper and continued engagement of each different type of donor. This book is written for the leaders of both.

In these pages, the development director of a small team or even a one-person office will read a number of anecdotes presented in sidebars from Dr. Polivy's professional experience that will help answer some of the fundamental questions not only about how to get started in fundraising, but also about the building blocks essential to a long-term, sustainable donor base. And the answers you, the reader with a small development program, will find in this book are not difficult to implement. You won't need massive startup funds or tools or even a staff to put into practice the framework that is presented. You will need a passion for the mission that you serve and a genuine desire to engage your fellow citizens in helping to realize the future that your organization envisions.

For fundraising leadership at larger programs, this book issues a challenge to remember what donor engagement really means. Like many other fundraising thinkers, Dr. Polivy begins with the premise that a charitable relationship between donor, service provider, and beneficiary is a complicated and very human one—ever changing and evolving—between people. While our daily professional lives may seem to be focused around getting enough money in the door, thinking more about how we can increase opportunities to involve donors in our mission and work will ultimately lead to a more effective result.

While this book poses a logical framework for managing a development office, it ultimately calls on each reader, whether fundraiser, executive director, board member, or volunteer, to think differently about the role and value of every single donor.

In Chapter 1, Dr. Polivy begins with the concept of donor cultivation —an often-used and perhaps poorly understood term in philanthropy—and proposes three elements that need to be included in a cultivation plan: the growth in the number of donors, the growth in the size of contributions, and the growth in the number of opportunities for giving over a donor's lifetime. This third element is an important one, as it forces the reader to think more broadly than just the current campaign or mailing. A case is made that the Donor Lifecycle Map helps to shift the fundraiser's thinking from activity oriented to relationship oriented. The importance of not just bringing in new donors into an organization but better planning the engagement of existing ones will become self-evident when mapping out the steps that each donor takes in his or her hopefully increasing commitment to the recipient organization.

Chapter 2 looks at the essential need for funding diversification in any organization. It examines through actual examples the very real risk to an institution with too few donors as well as types of donors.

Chapter 3 examines basic elements that are precursors to any successful fundraising program. These include a strong case for giving, a strategic plan that sets a clear roadmap for the organization's development, and a well-run back office. As Dr. Polivy again illustrates with poignant examples, no fundraising program will succeed in the long run without these elements firmly in place.

An outline of the methodology proposed in this book begins in Chapter 4, wherein personal cultivation tools are introduced. These are tools or channels that involve one-to-one communication with donors and are applied to each segment of the Donor Lifecycle Map based on what is most appropriate and effective for building the donor–organization relationship. The suggestions proposed in this chapter are truly donor centered, encouraging the reader to learn about each donor through personal contact in discussions not about money, but about the donor's beliefs, passions, and connection to the work that he or she makes possible; and ensuring that each donor is given the opportunity to participate—not merely financially but also with time, input, or leadership—in the successful delivery of the charity's services to the community or in the achievement of its objectives.

Chapter 5 introduces nonpersonal tools, or those that are applied to groups of donors to keep them updated and engaged in the work of the organization. The reader will note that these are not solicitation devices. They are means of informing, recognizing, thanking, and involving. And while these mechanisms are all very important, the chapter focuses on how to apply them strategically and cost-effectively.

Chapter 6 combines the concepts introduced thus far to address the strategic planning process. Using the Donor Lifecycle Map as a basis, a team is advised to look at how the tools discussed in Chapters 4 and 5 can and should be applied to each stage of the donor journey. In recruiting new donors, the focus is placed on those individuals with a connection to the organization's work or mission, and the essential process of securing a second gift from one-off cash contributors—the goal being to usher them into the second-year active segment. An important and yet egregiously overlooked segment, multiyear active donors, is then examined. The cultivation to major giving (or stretch as the case may be for some donors) is then explored, and in particular the approach that is necessary to move donors' giving to the maximum of their relative capacity. The last segment of the Map, ultimate giving, is then outlined in the context both of an endowment program and also deferred giving, which are used to fund annual operating budgets, restricted for specific programs or capital investments, or used to establish permanent funds.

The traditional donor pyramid is introduced in Chapter 7. Dr. Polivy describes the pyramid as a snapshot in time and the Donor Lifecycle Map as showing movement over time. Variables within a donor file are also introduced in this chapter, with a focus primarily on the implications of age and gender on a cultivation strategy, and in particular for major gifts and ultimate gift fundraising.

Chapter 8 covers possible impediments to change. Those of us working in development have all experienced the frustration of a CEO with a short-term perspective on income generation or a board that considers fundraising the sole purview of the development staff, and something that they want no part of (except, of course, to see that the money is coming in). The chapter also includes excellent advice for removing some of these impediments, referring to a selection of ideas by top thinkers in the field of nonprofit management and leadership.

Chapter 9, essentially a case study, reflects on a major transformative fund development initiative by the Corporation for Public Broadcasting (CPB), and how the lessons learned from that program were subsequently applied to a local public radio and television station. For this chapter, Dr. Polivy interviewed Robert Altman, who directed the CPB Major Giving Initiative and now works as CEO of one of the participating stations.

In collaborating on this book, I was delighted to be able to add a section on applying the Donor Lifecycle Map to reactivating lapsed donors, Chapter 10. Here I examine the major drivers of donor loyalty and, in contrast, the reasons why individuals stop giving. There are also suggestions included for tools that can be used to reactivate donors, for how to apply them, and for whom they are likely to be effective (or not, as they case may be for certain types of donors).

In summarizing the ideas in this book, Chapter 11 looks at the possibilities for applying the framework in a development model. Is it feasible to put this paradigm into practice in a development program with limited resources? What are the changes that may need to be made in order to begin using the Donor Lifecycle Map? Dr. Polivy uses the phrase total financial resource development to highlight the fact that the framework discussed in this book is not merely a question of changing a particular campaign or activity, but fundamentally rethinking the way that donors are viewed and relationships are managed organization-wide. In closing, she advocates a sound process of strategic planning, research and development, testing, and evidence-based decision making. This is excellent advice that, if followed, will almost certainly improve the fundraising results of each and every reader.

Sarah Clifton

June 2013

Amsterdam, Netherlands

Acknowledgments

Sarah Clifton, social change fundraiser and 101fundraising.org blogger, stimulated my thinking for this book with her concept of the Donor Lifecycle Map and the graphic illustrating it. It was delightful working with her. She was generous with her ideas and pleased that someone was taking advantage of them. She was a partner in this effort. Sarah also wrote the preface to the book as well as Chapter 10, (Re)engaging Lapsed Donors. Thank you so much, Sarah.

Dr. Misha Galperin, president and CEO of the Jewish Agency for Israel, spent substantive time with me critiquing the manuscript. His insights were excellent and I have done my best to incorporate them. I was also pleased and flattered that he accepted my invitation to write the foreword to this book.

I am indebted to Lisa Gurwitch, a longtime colleague and now senior vice president, Institutional Advancement and External Relations of World Learning, who did a terrific job in editing the manuscript. She was incisive in her comments and strict about not accepting some of my wording. Barbara Maduell, senior consultant, Collins Group, reviewed a portion of the manuscript and made helpful observations, too.

My years at the Florence Heller Graduate School for Social Policy and Management at Brandeis University taught me to think critically about social policy and effectively creating change. I am particularly indebted to professors Arnold Gurin, Roland Warren, and Robert Morris, of blessed memories, who always pushed me to my furthest intellectual capacity.

Robert Altman, president and CEO of WMHT, public television and radio in the Albany, New York area, was also generous with his time. I was anxious to use his experience as a case study for the book and he willingly allowed me.

Doug Sundheim, author of several books on management, assisted me at the beginning stages of this project. His advice was indispensable to making this book happen.

I am indebted to the staff at John Wiley & Sons, Inc. for their help and I especially want to thank Susan McDermott, senior editor, who supported this project from the very beginning, and Jennifer MacDonald, senior development editor, who did an impressive job in editing the manuscript.

I originally learned about philanthropy from my parents, Sidney Abraham Kaplan and Frances Shapiro Kaplan. They were generous with few resources; they gave to their capacity. They would have been extraordinarily proud of me and this publication. I wish they could have seen it.

I learned so much from the men and women with whom I worked over the years, both professional colleagues and volunteers. I am especially grateful to attorneys Richard Gaberman and Edward Winnick. They believed in me and kept me on course.

I want to thank my husband, Richard, who really has very little interest in the not-for-profit sector but read several drafts of this book and made some excellent comments. He has always encouraged my professional pursuits notwithstanding he has believed in few of them. My children, David and Rebecca, and their spouses, Pam and Omer, enthusiastically supported this effort, and Adina and Amir were helpful, too, in their own particular ways. My friends, Ellen Morgenstein and Michele Kostin, encouraged me throughout this project. They are very dear to me and I thank them, too.

Introduction

Why I Am Interested in Donor Cultivation

When I was employed in development departments of not-for-profit organizations, I just did cultivation—it wasn't something that I thought about in any strategic fashion. I planned the next year's activities and constructed budgets thinking about what tools (e.g., events, newsletters, personal visits, brochures, etc.) I would use to effectively connect with and inform current donors and prospects about the organization so that they would begin or continue to make contributions. In terms of ongoing supporters, my goal was to obtain increases in the size of their respective gifts. I didn't think about the process in terms of the word cultivation.

When I began consulting, however, my outlook changed. I began to see patterns in the nature of inquiries I received from prospective clients. While some asked for help in relation to particular projects such as building an endowment program or conducting a feasibility study to determine support for a capital campaign, many called when they were in financial difficulty. They recognized that they needed to raise money quickly but didn't know how. They contacted me thinking that I was a professional fundraiser and could succeed where they could not. They assumed that I had a large Rolodex and that my contacts would save their organization.

Nothing was further from the truth. If the organization hadn't developed its own supporters over time, no Rolodex of mine or any other consultant would come to the rescue. I always asked these callers what they had done to cultivate donors. They usually hesitated before responding and really had no cogent answer. One stated that he had names of donors on index cards filed in a basket somewhere in the back office.

I began to think about the question, What makes a good cultivation program? when, at the beginning of the recession in October 2008, I received the following e-mail from a colleague. I have a professional judgment question for you, she began…

Several of my overseas clients are considering trips here over the next few weeks. With the economy the way it is in the United States, donors are unlikely to consider new commitments and may have problems meeting their [existing] 2007 pledges (even some foundations who have not earned what they did in the past few years). In one sense I feel clients should come anyway for face time—eventually this disaster will turn around. That said, I fear donors may think it irresponsible to spend money on travel when the likelihood of scoring major gifts is very remote. Plus, getting appointments, especially with new prospects in this climate, will not be easy.

What do you suggest? I was thinking, perhaps December is a better time when people will have a greater indication of what their end of the year books will look like; the election will be over and there will perhaps be a Wall Street rally.

I suggested that she advise her clients to come to the United States in order to stay in front of potential donors. I have always operated on the assumption that it's easy for a contributor to find a reason not to give and that any program or organization could soon be forgotten.

My colleague chose the opposite, recommending that clients not travel to the States. Her advice caused me to think further about the cultivation process.

Another e-mail also prompted me to consider the subject. This one was from the president of an organization to board members. She described how the development office should operate and her proposal was for the short term and concentrated on transactions (e.g., send the annual holiday letter) and contained no long-term approach to fundraising.

No one on the board would challenge her because the institution was dependent on her contributions for its survival. I was always anxious about the organization's reliance on this individual, and frequently asked myself and others, What if she didn't like something that happened? Would she take her money and leave? What if she found a new charitable interest? There was no plan to protect the organization from such an occurrence.

These incidents, plus many years of experience in the development field, served as the precipitants to my deliberative thinking about the process of donor cultivation. When I saw Sarah Clifton's graphic of the Donor Lifecycle Map on the 101fundraising website¹ and read her description of its application to fundraising, I realized that her illustration combined with my ideas about well-thought-out cultivation made sense in terms of creating a conceptual framework for donor development. The two notions seemed to logically work together and helped explain my thoughts about how to interact with donors at various times in their respective phases of giving to or discontinuing support for a not-for-profit organization. Something else happened, too. I began to differentiate between fundraising—an annual effort to obtain financial support—and development—an ongoing enterprise to create deeper commitment by donors to an organization over time.

And so This Book

I wrote this book for several reasons. The first was to introduce a conceptual and useful framework for thinking about donor cultivation. The second was to demonstrate that donor cultivation is a deliberative process that needs to be carefully considered and purposefully included in a development plan if for no other reason than a budget is required to implement it. I also wanted to make it clear that while it is the staff's job to create a budget, a board has to understand that development is not a year-by-year activity but an ongoing course of action that will take investment of resources in order to produce results. Finally, no matter how well-designed the donor cultivation strategy may be, I wanted to identify obstacles to its implementation in order to forewarn readers that these have to be addressed in advance.

This book is directed to those individuals who choose development