Five Identifiers of a High Quality Fundraising Prospect
This is a guest post written by Kim Becker Cooper of DonorSearch. DonorSearch is a strategic partner of Ter Molen Watkins & Brandt.
The National Basketball Association has long griped over how to decide the league’s best player. The Most Valuable Player (MVP) award is supposed to go to the league’s top player, but there’s argument over what the word ‘valuable’ means.
Is the MVP the best player on the best team? Is he the most irreplaceable player on a team that would be much worse without him? Is he the player who has the most memorable games and moments, despite lagging behind others in certain metrics?
As with crowning the NBA’s MVP, discovering your best fundraising prospects does not boil down to a single piece of criteria.
There are several qualities that can help identify the potential donors who can give the major gifts that will lead to your organization’s success.
1. Previous Giving to Your Nonprofit
Like a team’s go-to scorer, a loyal donor comes through again and again and again. Being a loyal donor to a nonprofit is the best indicator of future giving.
Of course, many loyal donors give minor amounts, but don’t let that deter you. Many of these annual donors have more money, but may have never thought to or been asked to give more. Prospect research can help you figure out which of these donors has a greater capacity to give.
A way to sort loyal donors is with RFM scores, which rate prospects according to three pieces of data:
- Recency – How recently has the donor given to your nonprofit?
- Frequency – How often does the donor give?
- Money – How much – total, on average, and with the latest gift – has the donor given?
Major gift prospects are ranked on a 100-point scale in each category, with 100 being the best score. Thus, your most recent donors, most frequent donors, and most generous donors receive the highest scores. The total score is out of 300, but if you lack data for one or two categories then you can make the score out of either 100 or 200 to fit the information that you have.
2. Previous Giving to Other Nonprofits
The second best indicator of a major gift prospect is charitable giving to similar nonprofits. Your prospects might donate to nonprofits with similar missions, locations, sizes, or other factors. If you can inform your prospects of the commonalities that matter to them then they just might give to your organization, too.
Data demonstrates the power of this predictor:
- Individuals who give a gift of $5k-$10k to a nonprofit are 5 times more likely to make a charitable donation elsewhere.
- Individuals who give a gift of $100k+ to a nonprofit are 32 times more likely to make a charitable donation elsewhere.
Once a philanthropist, always a philanthropist.
3. Political Giving
Each year, there are usually a few players worthy of the MVP award, and everyone supports their favored candidate. While supporting an NBA MVP does not predict philanthropy, making charitable gifts to political campaigns is an accurate predictor of future charitable giving.
An individual who has given at least $2,500 to political campaigns is 14 times more likely than the average person to donate to a nonprofit. Through monetarily supporting political campaigns, prospects express a willingness to fund the causes they care about.
4. Real Estate Ownership
Real estate ownership is another indicator of future charitable giving. In fact, individuals who own $2+ million in real estate are 17 times more likely than the average person to make a charitable donation.
Real estate ownership is a wealth indicator and the first true wealth marker on this list.
Wealth matters, as a prospect can’t give a million dollars if she doesn’t have a million dollars to give. However, it’s better to look for philanthropic indicators first, as your chances of landing major gifts are higher with people who already want to support nonprofits.
5. Nonprofit Involvement
On the court and in the locker room, MVP’s take charge and serve as leaders for those around them. People know that MVP’s can be counted on to understand any situation and act as needed.
High profile members of foundations and nonprofits know what philanthropy means and are likely to be responsive to charitable asks. According to a charitable giving analysis of over 400 nonprofits, a prospect’s role as a foundation trustee or nonprofit director is a better indicator of philanthropy than any wealth indicator.
How do you find these leaders?
Look for these people on your own or with the help of a screening company or consultant.
Once you’ve received a charitable gift, remember to extend a special thank you, as major donors are who keep your nonprofit running at full capacity.