One may think that there are only a limited number of donors to go around, but think again.
In my work, I assist small to mid-sized organizations in running their first capital campaigns. Many do not have established donor bases to tap into for an already existing pool of major donors. So, I assist. And, I am here to say that yes, you too can, even in your small nonprofit, develop a list of 25 or more possible major donors to your organization.
I am going to take you step by step on how to begin establishing that prospect list for your nonprofit organization and then share with you some next steps on how to prioritize that list.
Here are the steps you can take to develop your prospect master list:
Use informal organizational networks including organizational friends and family members i.e. Board members, staff, volunteers, etc. to identify prospects within their respective networks who have both wealth and affinity for the cause.
Ask your current donors when meeting with them if they know of anyone else who may support the cause.
Research prominent donors to other similar organizations who may be making small gifts to your organizations. It is helpful to obtain copies of their annual reports, newsletters, and even event programs to see the giving levels of the prospective donors. Annual reports may be found online or hard copy by request.
Research who has been attending your events. There are folks here who already know of your mission and may be willing to deepen their relationship with you.
Research others who live in your community who might give to you using voter, property (Grand), the local chamber of commerce, houses of worship, and other lists.
So now what do you do when you have all this information?
Here is what I recommend:
Cull through all these lists to create a Master List of prospects whom you think “make the cut” regarding any possibility of capacity, affinity, or connection.r
Let me define these for you.
Capacity – ability to give
Affinity – philanthropic to a similar cause or interest
Connection – involvement in your organization
Once you have this Master List developed then work with the fundraising/development committee, Board of Directors, or other volunteers (they should know folks in the community) to rate and rank each donor during a rating session to determine potential giving capacity, interest, and affinity.
And, from there you have a Master List of the top 20-25 prospective donors to your organization. Even the smallest of non-profit organizations should be able to come up with a Master List of at least 25 potential donors after following these steps.
I often get asked from my clients, how many touchpoints do you need to give to a donor at a certain level?
And, my answer – it varies.
There is some science to the whole matter. In fact, after I conduct a rating and ranking session, I will combine all of the numbers and come up with a formulaic cultivation quotient. The number of touches estimated for a particular donor’s rating score and ranking.
To me, that is a guide. What we must remember is that each donor is an individual. They have different motivations for giving, different ways that they would like to be recognized, and different things that they are interested in giving to support. And, that means that they all have different cultivation and stewardship needs as well. So, while I could say that the cultivation quotient for Mrs. Smith came out to 20 touches per year, she may not want to be contacted or that involved with the organization.
I advocate that each necessitates a thorough review and a particular strategy custom and unique for them. And, often, it takes a wise fundraiser who has been in conversation with the donor to recognize what is or is not important to them.
Now, I am not advocating that we throw the “moves management” system of relationship-building out. However, what I am recommending instead is that we seriously advocate instead for a very donor-centered process that takes in the uniqueness of each donor into the “moves management” equation when developing strategies for cultivation and stewardship. Let’s not reduce our donors down to formulas, quotients, or tactics. They are people – unique and compassionate!
Development Consulting Solutions is announcing NEW interim and project-based service offerings:
Who is “DCS”? There are limited Certified Fund-Raising Executives (CFRE) providing outsourced fund development services and serving as interim fund development staffing. What most organizations need is someone who can do the work for them!
“DCS” recognizes this need and has provided this service to a variety of small to mid-sized nonprofits throughout the New England region. Some of these nonprofits have included Malta House of Norwalk, CT, Friends of Buttonwood Park of New Bedford, MA, and United Methodist Elder Care of East Providence, RI.
“DCS’s mission” “DCS” does not engage with everyone! We have a rigorous eligibility requirement and screening process and only work with four select clients at a time.
What are our requirements? We only work with small to mid-sized organizations that are ready, receptive, and willing to take their development program to the next level through outsourced assistance. These organizations have an engaged Board of Directors, an open-minded and willing staff, and leadership ready to support the organization.
We only work with organizations that are willing to invest in their development function, value established service costs, heed professional advice, and strategy, and act respectfully in the client and consultant relationship.
By selecting those clients most ready to embark on taking their organization to the next level, “DCS” provides you with the tools and staffing to raise more money in support of mission!
To provide outsourced development expertise to organizations that do not want to hire someone in-house.
To assist busy executive directors with taking a few things off their plates.
To reassure donors during a transition or vacancy in your development office that your fundraising efforts will continue
If time is needed to do a search for a permanent development director, and you do not want to be rushed to make a selection
When you are seeking a new executive director and you want to be sure that this leader has an opportunity to select the permanent development director
Because as interim development director, I can have more candid conversations with the executive director, board, and other leaders about why there are problems with keeping development staff or staff is underperforming
When your organization has never had a development director and needs an experienced professional with a proven track record to start up the development office and pave the way for a more junior development officer to be successful.
Here is what “DCS” can do for you:
Assess current fundraising activities and make recommendations to improve strategy
Improve your fundraising efforts
Model what a good development officer does
Enhance systems and processes within the development office
Troubleshoot development problems
Coach the Executive Director and Board in fundraising to boost confidence and skill
Help with the hire of a permanent development director
“DCS” helps with:
Direct Mail Appeals
Development print publications – your newsletter, annual report, brochures, etc.
“I never have enough money!”
“Money goes out faster than it comes in!”
“Money doesn’t grow on trees!”
How often have we heard these phrases growing up? Well, if you were like me, probably a lot. As a child, these were the messages that I subconsciously learned about money, and they helped to develop my now adult relationship with it.
Just this week, I led a workshop on asking for money. As part of the icebreaker exercise, I asked attendees to share with me some of their greatest fears about fundraising. And, fear after fear centered around scarcity. In fact, many participants commented that they grew up hearing the very same phrases above.
Stop and think about what you believe about money. Are your beliefs limiting you in your work? Do you have a scarcity mindset?
Have you ever found yourself saying these types of things?
“There are only so many donors to go around!”
“Donors only have so much money to give!”
“We already asked our donors once this year; we can’t ask again!”
Are we placing our beliefs on our donors? Are we making assumptions for our donors? Are we self-sabotaging our work? Are we limiting our role in the work that we do? Are we focusing our efforts and time on things such as events that will take us out of the context of asking?
To be truly effective fundraisers, we all need to dig deep and look at our views and those beliefs of scarcity that may be holding you back. Are they self-limiting and if so how can you work to create an abundance mindset? We don’t want scarcity from preventing our life-changing work from happening both for our donors and for our missions. So, it is critical that you identify your mindset and work to change it. Major gifts start with you. Get that part of the relationship right first.
Break the scarcity mindset before you ask for a major gift.
The fundraising audit is a major step in fundraising planning. When you think about planning, you think about where are we, where do we want to be, and how are we going to get there?
The fundraising audit helps you to determine, where are you. And, it is probably the most important step of the entire planning process. If you don’t know where you are today, how can you even plan for tomorrow? And, it is important to not only look at internal things that will impact your fundraising success i.e. Board of Directors, etc., but it is also critical to examine external factors as well. Some external things that may affect the success of fundraising include political factors (i.e. election time), economic (a down economy), sociocultural (changing demographics), and technology (changes in the web, social media, etc.). Development audits also tend to examine others in the industry including nonprofits serving the same type of causes, similar sizes, potential collaborators, and other market factors).
Also, one can examine the feasibility of conducting a future large-scale campaign. Currently, I am conducting a development audit for a nonprofit organization, and as part of that review, I am asking initial capital campaign feasibility questions to determine if a proposed future capital campaign would be a success.
An audit is just that, a systematic attempt to gather tons of data, and then analyzing and synthesizing this data against professional best practices. While it is best that an objective third party person conducts this process, it can also be accomplished by a new in-house development staff member who still has an objective “eye.” It is also helpful to have someone who has their finger on the pulse regarding what is shifting and changing in the philanthropic landscape.
A development audit is also a great way to engage key stakeholders i.e. Board members, donors, etc. who may need more cultivation. It is just as much about the product as it is about the process.
Yes, every grant you write will not be funded. That is a reality. I know, you and I both wish that they were, but that’s not always the case.
According to The Fund Raising School at the Indiana University Center on Philanthropy, these are some concrete reasons why foundations decline funding applications:
Failure of the applicant to follow foundation guidelines.
The project does not strike the reviewer as significant; statement of the project does not interest him or her.statement of the project does not interest him or her.
The applicant failed to include other prospective client groups in the planning of project goals.
The proposal is poorly written and hard to understand.
Proposal objectives do not meet goals of funding source.
Proposal budget is not within the range of funding available.
The funding source does not have confidence that the organization submitting the proposal can carry out proposed application activities.
Project objectives are too ambitious in scope
Proposal writer did not follow guidelines provided by the funding agency.
Evidence that the project can sustain itself beyond the life of the grant is insufficient.
Evaluation procedure is inadequate.
While it seems like this is enough to say it is not worth preparing proposals, it is. Your organization must put in the time to research and adhere to the guidelines of each funding source. Doing so will result in a much higher funding rate. It behooves those who cannot do the proper research, or is unable to craft a detailed proposal, to outsource a particular proposal, or all of their grant writing needs to a professional.
A professional has the expertise to understand foundation priority areas, and can craft funding applications meeting the foundation’s requirements. Also, professionals can propose collaborative partnerships that build confidence with funding sources increasing the rate of foundation success.
Younger donors don’t give as much. You can chase the Millennials and the generation whatever’s, but if you don’t take into consideration the family life cycle, then you are misdirecting your energies.
What is the family life cycle I hear you ask?
Wills and Gubar (1966) identified nine distinct life cycle stages of a family. 1966 – and this information is still relevant! They believed that that the age and composition of the family unit has a direct impact on the buying patterns of families. And, as the family moves through the life cycles, these stages change as well.
For instance, at certain points, giving decisions are made jointly with spouses, starting a new family impacts discretionary spending patterns, and levels of disposable income vary over the lifetime of a family. That is why you see younger people not giving as much – while raising a family, they have less disposable income to give away, saving for their child’s education, and their retirement. As folks age and their children grow up, these same folks have an improved financial position with more disposable income and fewer demands on the future and tend to give more.
Since 1966, there have been changes in the family unit that bring to mind some questions – what about single parent households, families having children later in life, and other family units? How do those impact philanthropic giving patterns?
However, overall, I think it is fair to say that looking at where a family is in their particular life cycle stage is an important indicator of their propensity to give, and why I believe that younger folks, while wanting to be, just cannot be as generous as their parents.
There are two things that you need to consider when developing a major gift strategy. The first is deciding on what level of gift you want to solicit in person, and the second is prioritizing the list of prospects from the screening process to ensure that there are enough prospects for each level of gifts needed.
What is the goal of your campaign? Once you have that in place, you can develop a gift chart that will demonstrate the number of gifts needed at each gift level and the corresponding number of prospects needed to obtain one gift at each level. As one moves down the gift chart, the ratio of prospects to gifts drops. Naturally, it becomes much easier to solicit at the lower gift levels.
This gift range chart allows you to ensure that you have an adequate number of prospects to reach your ultimate goal. Not ensuring an adequate base of prospects is the number one cause of campaign failure. You can take the information gained through the screening process to determine if the gift levels are realistic and if enough prospects are available at each gift range level.
For your free e-course on establishing a major gifts effort in a small fundraising shop, sign up here!
The world is full of prospects. Now who to see first. Well, those that are most likely to make an individual donation.
Without a crystal ball, how do you even begin to determine those most likely to make a donation?
Well, first you look at linkage. Is there a strong connection between your organization and the prospect? Are they active in the organization? Do they know someone actively involved in the organization? These linkages are what matters. A genuine link to the organization.
The next thing to look at is their ability. Do they have the financial ability to make a sizable gift? There are ways both formal and informal that can help you determine if someone can make a gift.
The last thing one needs to determine is if the prospect has any interest in your organization. And, by interest, I mean belief in and passion for the mission. Again, some of this information is available online.
I would also recommend that you conduct a silent prospecting rating session with your closest board, staff, and volunteers. Prepare lists of the top one hundred prospects and have them review the lists for linkage, ability, and interest.
Then you take this prioritized list of prospects and determine initial cultivation and strategies for each. You can then segment each category of prospects into tiers. Tier 1 prospects are your major donors already close to the organization and have been supporting it for quite some time. Tier 2 donors are those with the capacity and interest to make a gift but lack connection. Further cultivation may be necessary for these individuals. And, Tier 3 donors are potential donors who very little is know of them. They folks would require additional prospect research and more in-depth cultivation.
So there you have my primer on major donor qualification. While, I know that asking is critical, I would hesitate to skip this careful planning step. In doing this step, you are determining who is more likely to support the organization immediately, and that will make for a much more effective and efficient solicitation process.
For your free e-course on establishing a major gifts effort in a small fundraising shop, sign up here!