Recently, in “New Year’s Resolution: Prioritize Major Gifts, Beginning in the Donor Database,” I wrote about why you need to focus your resources on major gift fundraising this year. Not so much from businesses and foundations. But from individuals.
Because that’s where the lion’s share of all philanthropy comes from.
- 88% of gifts come from 12% of donors
- 76% of gifts come from 3% of donors
As Bill Levis, Project Manager of the Fundraising Effectiveness Project so aptly puts it:
“When so much in the way of revenue can be derived from either 3% or 12% of any donor database, extra focus on identifying and building relationships with both groups is time well spent.”
First… you have to identify the best major donor prospects with whom to build relationships!
Not the best prospects for other nonprofits, but the best ones for you.
Lest you think you’re an exception, you’re most likely not. So, please… read on.
Increasingly, nonprofits of all sizes and shapes need major donors.
Because there are fewer and fewer donors generally, and less small donors specifically.
Per the Fundraising Effectiveness Project, the total number of donors dropped by 4.5%.
Increasingly, folks are giving to fewer charities and making larger gifts to those they choose to support.
Today’s donors want to make an impact.
More of Today’s Donors Go Narrow and Deep, Not Broad and Shallow
Please allow this reality to sink in a minute.
It works like this:
- My parents gave to just about every charity whose appeal crossed their threshold. This meant they gave small gifts to lots of charities. If you resided in their community, or fell within their area of interest, they likely were your donor. Easy peasy.
- I give to maybe a dozen charities. Major gifts to just two or three. I prefer not to spread my philanthropy too thinly. If you want to count me as your donor, you’re going to have to be proactive. Not so easy.
- My kids give to very few charities. And when they do, they’re likely to be actively engaged in some hands-on way. You truly need to get up close and personal with them. Not so easy.
- And the trend towards larger investments to fewer charities continues apace.
Stop worrying you’re doomed because there’s more competition for fewer donors.
While this may be true, when you do win over a donor you win much bigger than you might have in the past.
It’s just silly not to actively embrace your biggest fundraising opportunity.
If you want to become one of a donor’s ‘narrow and deep’ choices, you must actively look for the folks who make these decisions.
Let’s take a closer look at how to identify major donor prospects for your organization.
Making a List of the Richest People in Your Community Won’t Cut It
Everybody does that. And very, very few of them actually receive gifts from these folks. In fact, most of these organizations don’t even get as far as identifying a contact who makes an overture on their behalf. The names simply languish on lists. For years. Meanwhile, the organization thinks they have a ‘get rich quick plan’ – they’re just waiting to recruit a board member who knows this person.
Does this perhaps strike a chord (or, rather, a discord)?
Resolve yourself this year: No more of this passive, sit-around-and-wait nonsense!
Let’s look at how to get active when you identify major donor prospects.
Find Your Best Narrow, Deep Donor Prospects
For sure, the best place to begin to identify major donor prospects for your nonprofit is in your own database. Go back to my recent article for more on that topic.
But what if you don’t have much of a donor database?
Or what if you’ve already mined your database for all it’s worth?
NOTE: I find very few nonprofits who’ve really squeezed the last drops from their current donors, so don’t be too quick to assume you’ve done so either. Your mid-level donors have already demonstrated (1) they’re philanthropic, (2) they’re interested in what you do, and (3) they’ve taken an active step to connect their expression of values to yours. The only thing you don’t know about them is their capacity to make a larger gift. But… you’ve got a lot more to work with than you do with most non-donors. So… perhaps you should revisit your database before you start looking farther afield. I’m just saying…
Let’s move outside your donor database for a while.
In fact, let’s begin with what NOT to do.
Don’t Hire a Fundraiser to Bring You Their Rolodex
If you think you’ll hire a fundraiser who will walk in the door with their rolodex and begin dialing for major donor dollars, think again. Not only does it not work that way, but it’s actually unethical for a fundraiser to steal donor relationships and take them from one organization to another.
Fundraisers work for the organizations that hire them, not for themselves.
Hence the relationships they build on the job are the organization’s relationships. The fundraiser doesn’t “own” them. Yes, the fundraiser may consider these donors friends. And they may continue to see these folks after leaving their job. But that’s different than assuming just because the donor gave to Organization A they’ll necessarily be expected to support Organization B.
Understand your best donors will come from your most natural current constituencies.
These are your insiders. They may not yet be donors, but they’re affiliated with you in some way. In other words, they’re not strangers.
Do Consider People with LIA
What’s ‘LIA’ you ask?
This is an acronym I learned many moons ago, when I had the great fortune of attending The Fundraising School taught by its founder, the great fundraising guru Hank Rosso
Your best major donor-investor prospects are those with:
- Linkage to your cause (e.g., they’ve given before; they’ve been a client or patron; they know one of your board members, etc.);
- Interest in your cause (just because a family member was treated at your hospital does not mean the prospect wants to build you a new wing; linkage alone, without interest, does not suffice), and
- Ability to give (yes, though we hate to talk about money, it is important the prospect have the capacity to make a major gift if you’re going to put them on a major donor cultivation track; if not, you’re just wasting your time).
Do Consider Your Most Natural Donor Constituencies
Your best major donor prospects won’t be mysteries and they won’t come from a list you make from scratch. Again, they’ll be folks who already have linkage to you, interest in what you do, and, if you’re lucky, ability to give.
Before you get to giving capacity, begin with linkage and interest.
- Board members
- Current donors
- Lapsed donors
- Active volunteers
- Constituents on your various mailing lists – former board and staff, program attendees, clients and their families, former clients, affiliated community leaders, vendors
- Friends, family and colleagues of your insiders – i.e., parents, grandparents, adult children, co-workers, giving circles, book group, congregation, service club and classroom members
- Donors to similar organizations – e.g., within the same field or community
To help you visualize this, think of your constituencies as concentric circles, with your board and staff at the core ‘inner circle.’
These folks are then surrounded by your current donors, lapsed donors, volunteers (governance and direct service), clients and other users of services, friends and associates of the aforementioned (including your vendors), folks with a demonstrated philanthropic interest in similar causes, your advocates and influencers and then the rest of the universe.
Sadly, too many nonprofits start with the outer circles rather than the inner ones. Don’t do that!
Actively review the folks in the inner circles. Be prepared to share these names with your fundraising staff, development committee and board so they can identify who they know, research them, meet them and put in place a plan to cultivate and solicit them.
All those steps are for another day. But you’ve got to begin at the beginning. And identifying your most likely major donor prospects is an essential first step.
Could you use a little guidance strengthening your major gifts program?
Enroll yourself and your team (up to six people per organization) in my 8-week Winning Major Gifts Strategies for the small and medium-size shop e-Course. I offer it just once or twice a year, and the 2020 course begins January 21st. Grab your spot NOW — before the course fills up. Please take a minute to review the curriculum and see what your peers had to say about the course. Or contact me directly with any questions.
Download our free guide of 42 Questions to Ask Major Donor Prospects Before You Ask for a Gift to inform what questions you should ask to get to know and identify major donor prospects before you make the ask.