Helping Your High-dollar Donors to Stand Out

The wonders of online marketing give nonprofits the ability to reach out to millions of potential donors. But organizations seeking major and planned gifts often struggle with prioritizing the large amounts of data that result. It’s no great surprise that, after a while, all that data starts to run together and all those donors start to look alike.

The solution is to effectively prioritize the donors most likely to make a major gift — and reach them with the right message, through the right channel, at the right time.

Many of the traditional measures used in nonprofit targeting efforts — gross household income, tangible assets (home and car value), spending habits, and traditional recency-frequency-monetary segmentation based on past contributions — have proven to be unreliable indicators of a person’s true capacity to contribute a major gift to a cause.

To effectively identify and target potential major donors, nonprofit organizations must focus on prospects who meet these three criteria:

• Financial ability to make a major gift.

• High degree of attachment to your organization.

• High degree of affinity for your organization or mission.

The tips outlined below explain how to find the best prospects for major-gift fundraising efforts using these three important criteria.

1. Focus on assets and discretionary income — not gross household income: It all starts with an understanding of the potential donor’s true ability to give. Unless a prospect has the capacity to make the gift, no amount of research and cultivation will be fruitful. Typical gross household income measures tend to be unreliable and don’t effectively discriminate consumers. Understanding what discretionary dollars remain after essentials such as food, clothing and shelter provides better insight into how a donor might give. Nonprofits vie for the discretionary funds.

2. Use screening that identifies donor access to money, regardless of income: Use screening tools that segment, prioritize and target current and prospective donors based on their true ability to donate significant funds. Organizations should be able to easily find, profile and rank the wealth in their database using prospect-screening tools.

Specifically, the information should pinpoint wealth based in part on liquid asset factors, not just income. To understand why this is important, consider two people with the same income. If one’s dominant asset is his home, then he isn’t as likely to bestow a major or planned gift as the person whose dominant assets are liquid. The latter is capable of making a major gift without having to sell a portion of his dominant asset. The key is to focus exclusively on households with not only high income, but with high
liquid, discretionary income.

3. Prove a correlation between capacity to give and actual gift amounts: The capacity to give and actual gift amounts — cumulative and largest single gift — are strong predictors of giving. Screen to compare giving capacity with actual giving history to identify top donors. Doing so effectively can increase an organization’s performance by 20 percent to 30 percent annually.

Factors such as private company ownership, professional status and public stock ownership can provide a clearer picture of a prospect’s major-gift capacity. With this data, nonprofits can develop a donor profile that includes interests, gift timing and other factors, enabling them to target prospects as unique individuals.

4. Identify donor attachment to the organization: A donor’s attachment to a nonprofit organization also is an important factor in determining whether she’s a top-level prospect. Attachment often is defined by how long and how often a donor has given to a particular organization. Combine this information with her true ability to give to determine appropriate asking amounts. For example, a donor might be giving regularly to an organization, but the total gift amount might equate to well under 1 percent of her discretionary income.

5. Use data mining to determine donor affinity: Affinity indicates how likely a prospect is to give to a particular organization — even if he hasn’t given before. Data mining is at the heart of determining affinity. Find pieces of information in your database that relate to giving, such as marital status, event attendance and age. You then can create an affinity score that will rank your prospects based on their likelihood to support your organization at a higher level.

Generating good prospects
Use the concepts of ability, attachment and affinity to generate a list of high-quality prospects. Additional tips include:

• Rank current donors based on their giving capacity.

• Customize appeals based on giving capacity.

• Avoid contacting prospects with low or no giving capacity, thus increasing average gift amounts and return on investment.

Every nonprofit has people who’ll always support it. But to pinpoint the households most likely to make substantial donations requires identifying giving ability, attachment and affinity. Precisely targeting prospects meeting those criteria will result in higher donations with lower campaign costs.

Natalie Bush is senior vice president, strategic relationships, for McLean, Va.-based consumer marketing information company Echelon Marketing Group. Contact: nbush@echelonmarketing.com. David Lawson is senior vice president of San Diego-based online-solutions provider Kintera’s Prospect Relationship Management product suite and founder of the Prospect Information Network. Contact: dlawson@kintera.com.