Fundraising’s “Virtuous Circle”

I had the privilege of teaching at the South Sound AFP chapter a few nights ago. The group was made up of young professionals, several of whom had been fundraising for less than 6 months.

We walked through fundraising’s Virtuous Circle. A “virtuous circle” is a chain of events that reinforces itself through a feedback loop. Here’s what it looks like in fundraising:

1. Asking donors to solve a problem with their gift,
2. Thanking them promptly and emotionally,
3. Reporting back to them on how their gift made a difference.

Doing those three things well, one at a time, and in the correct order causes donors to trust your organization. This makes it more likely they’ll give to your next appeal, and stay donors for years and years.

I asked the group how many of their organizations Reported back to donors. **Only one person raised their hand.** Only one organization in the whole room was completing the circle.

I’ll do a longer post about fundraising’s virtuous circle later, but for now let’s focus on the incredible opportunity this presents for you and your organization. If your donor is giving to (on average) 7 to 10 different charities – but your organization is the only one does a great job showing her what her gifts have done, what do you think will happen? Here’s the short list:

• Your donors will stick with you for longer
• Your newsletters will raise money
• Your response rates to appeals will increase
• Even event income goes up

I think every fundraiser needs to learn (or be reminded of) this fundamental part of fundraising. Letting your donors’ know what their gifts have done is both honoring and a huge opportunity to raise more money to do more good.