Individuals. Institutions. Donor Cycle.
Depending on the revenue sources of a nonprofit there will be variations on these primary themes. Within these categories donors may opt to give to the general operations in an unrestricted manner or make a restricted gift to be used solely for a specific project or program.
Annual fund gifts are often made out of the donor’s check book and require little or no direct contact with the nonprofit’s staff or volunteers.
Major or Principal Gifts are often made from a special account such as a Donor Advised Fund or assets other than cash and often require direct interaction with the nonprofit’s staff and volunteers.
Planned Gifts or Structured Gifts are made most often using assets other than cash and often involve an element related to the donor’s estate or long-term personal financial planning. These gifts run the gambit from low/no interaction to very high involvement with the nonprofit staff, volunteers, donor and their advisors.
Foundations range in complexity and process. There is almost always a formal written request for support from the nonprofit required to secure funds. For many gifts or grants a predetermined process for reporting back is in place before the gift is made. More mature foundations use a theory of change model and framework for determining which nonprofits and projects to fund.
Corporations often use their giving to nonprofits as a compliment to their core business. The metrics corporations demand often include publicity for the gift as well as impact. A common misconception is that philanthropy is driven by corporate money, in fact corporations account for 5% of total giving.
No matter the type of gift, every gift goes through these phases.
- Identify – donor shares their interest in learning more about the mission of the nonprofit
- Cultivate – donor has a conversation with the nonprofit about the impact
- Ask – nonprofit asks the donor for support
- Steward – nonprofit shares the donor’s impact and thanks the donor for their gift
The cycle begins again after a gift is stewarded, for loyal donors the lines of cultivation and stewardship are often blurred.