By Sarah Tedesco, Executive Vice President, DonorSearch
Major gift fundraising is an important part of any nonprofit’s long-term strategy. We all know the 80/20 rule: 80% of your nonprofit’s donations come from 20% of its supporters. For many organizations, this has now become the 90/20 rule. But, finding enough people with the capacity to give major gifts and a connection to your organization can complicate this ratio.
With smarter prospect research, your major gifts officer has a better chance of securing those all-important donations with maximum efficiency.
Prospect research is looking at publicly available information to determine who in your community might be willing and able to give major gifts to your nonprofit. Some commonly considered data points include both wealth indicators and previous philanthropic behavior.
So how can your team best combine the insights of prospect research with your major gifts fundraising strategy? Our five best tips are:
- Let your major gifts officer lead the charge.
- Use your research to create an RFM score.
- Cultivate prospects with both affinity and capacity.
- Supplement wealth/philanthropic indicators with personal information.
- Leverage business connections for corporate matching gifts.
To learn more about how each of these tips can make prospect research improve your major gifts strategy, read on!
1. Let your major gifts officer lead the charge.
Soliciting major gifts requires a delicate hand, because you’re truly building a relationship between your potential major donor and your organization. So when it comes to handling your major gift asks, let your officer or designated team member take the reins.
Depending on the size of your organization, you may or may not have an official major gifts officer. If you don’t, we recommend you still declare one of your team members the head of your major gifts strategy.
Allowing one person to lead the efforts to cultivate major donors ensures that every interaction is planned and documented, so donors don’t get repeated asks or feel like your nonprofit doesn’t really care about them or their gift.
No matter who in your team conducts the prospect research, all the data should be reported in your nonprofit’s CRM and given to the major gifts officer. The major gifts officer, as the team member in charge of building your major gift strategy, will then determine:
- When the first contact should be made;
- What level of giving is appropriate to solicit; and
- What the strategy for asking should be.
Your major gifts officer is in charge of tracking and analyzing your nonprofit’s major gifts metrics, so they know what strategies work best for your needs. By allowing one person to take the reins of this important project and oversee everything, you can rest assured that your prospect research efforts will be put to the best possible use.
2. Use your research to determine an RFM score.
Using prospect research to guide your major gift fundraising strategy can also help your nonprofit by allowing your major gifts officer to identify the most promising prospects for solicitation.
A common and useful way to consolidate your prospect research into a comparable and quantifiable metric is to create an RFM score for every prospect you researched.
What’s an RFM score?
- Recency of last donation;
- Frequency of donations; and
- Monetary contribution of donations.
Recency of donation determines how active a person is in philanthropy and how close giving is to the front of their mind. Recent giving activity indicates that someone is currently in a position to give and has the motivation to do so.
Frequency of donations indicates a long-term investment in certain causes. If someone gives frequently, then you know that their philanthropic behavior is a long-embedded part of their life and that they have the capacity to give again and again.
Monetary contribution of donations is another way of indicating wealth as well as engagement with and commitment to a cause.
Two people may have the same frequency of giving, but their monetary contribution might indicate one would be a great low- to mid-level recurring giver and the other a potential major giver.
By determining the RFM score of everyone you conducted prospect research on, you can rank them by order of potential to become a major donor.
Someone who has donated recently, frequently, and at high levels is a more promising potential donor than someone who hasn’t donated recently, with no amount of frequency, or in amounts that indicate no major gift potential.
For more information on how to determine someone’s RFM score as well as a more in-depth look at the process behind prospect research, check out this ultimate guide to prospect research from DonorSearch.
3. Cultivate prospects with both an affinity and capacity for giving.
Prospect research tells your nonprofit about a potential donor’s philanthropic behavior and capacity for giving. But how does it actually know?
Philanthropic behavior, which indicates affinity for giving, is measured through:
- Previous donations to other nonprofits;
- Previous donations to your nonprofit;
- Previous donations to political campaigns or advocacy groups; and
- Volunteer history with nonprofits or campaigns, if available.
These all demonstrate a measurable interest in the work of philanthropies and enacting or enabling change of some sort.
Wealth indicators dictate that someone has a high income or net worth through things such as:
- Property and house ownership;
- Vehicle, boat, or plane ownership; and
- SEC holdings.
These indicators suggest that someone has disposable income and a tendency to invest in things that bring value to their life.
An understanding of these specific data points gives nuance to your RFM score and allows your team to better determine who are among the most valuable prospects for your major giving strategy.
For example: two potential donors have the same RFM. But upon looking at which nonprofits they donate to, you learn that one has a history of donating to nonprofits like yours, and the other donates to nonprofits or political campaigns that are opposed or indifferent to your cause.
Which do you think is the more valuable prospect?
By breaking down your prospect research discoveries beyond checking yes or no for affinity and capacity, you can better understand the prospects with which you wish to build relationships.
4. Supplement wealth and philanthropic indicators with personal information.
While prospect research is an invaluable way to learn more about your current donors as well as potential donors from your community, don’t forget that building a relationship between them and your organization will take more than knowing their capacity and affinity.
Once your major gifts officer has determined who amongst your prospects is the most valuable or promising, ramp up your outreach and engagement efforts to start to get to know them.
Giving at any level is an intensely personal process driven by a host of different factors, so when you start to get to know your prospects, try learning more about what drives them to give. Some factors include:
- Previous first- or second-hand experience with the issue of focus for your nonprofit;
- A personal connection to your nonprofit through life experience or loved ones;
- A love for whatever cause your nonprofit champions: art, music, animals, etc.
These are only a few of the things that drive people to give, so take the time to learn about the passions and values of your prospects in order to improve your ask strategy and strengthen their connection to your nonprofit.
Don’t forget about keeping track of things like birthdays, spouses, children, hobbies, and other personal details that are important to your prospects.
Cultivating a donor takes time, so building a strong relational foundation is key to maintaining strong bonds and achieving fundraising success.
For example, a prospect is going to be far more impressed and happy with a nonprofit whose staff wishes her or her husband a happy birthday than one who asks if she’s married every time she attends an event.
Supplementing the numeric data you learned from prospect research with personal anecdotes and information will help your nonprofit build stronger bonds and increase the effectiveness of your fundraising strategy.
5. Leverage business connections for corporate matching gifts.
When considering someone’s publicly available data during prospect research, don’t forget to take into account their employer, as well as their position within the company.
Corporate philanthropy is a tragically underutilized method for nonprofits to reach their fundraising goals. Companies with corporate philanthropy programs usually have matching gifts programs, volunteer grant programs, or both.
Volunteer grants programs are policies through which a company donates money (the ‘grant’) to a nonprofit after one of their employees volunteers for a certain number of hours with that nonprofit.
Matching gifts programs are processes through which companies will match their employees’ donations to a nonprofit organization in different ratios.
Some companies will donate $.50 for every $1 that an employee donates, and some will even donate $4 for every $1 that an employee donates. Every company has different minimums and maximums, but maximums can range from $100 to $25,000.
Depending on what your nonprofit considers a major gift, a mid-level donor could become a major giver, or a major giver could become one twice over, just by taking advantage of their employers’ matching gifts program.
Segment your donors and prospects by their employer, and then research the companies that employ your supporters. You never know who might turn out to have massive matching gift potential.
Some of the top matching gifts companies are:
- General Electric
- Johnson & Johnson
- Choice Hotels
And there are many others. Submitting a matching gift request takes less than five minutes, so don’t be afraid to market these programs to donors or prospects who may not know about them. You could actually double your major gift success with the same amount of effort.
When planning your major gifts strategy, don’t hesitate to look at where someone works when considering their RFM, affinity, and capacity.
Prospect research may seem like extra work, but it offers many benefits that can enhance your major gift fundraising strategy and could help you uncover potential major donors that could make a huge difference for your nonprofit.