Identifying and Developing Donors

 

Overview

Welcome to the identifying and developing donors e-learning lesson. At the end of this lesson, you’ll be able to: Identify donor prospects by mapping your organization’s network, Explain effective strategies for developing donors, and apply techniques to effectively ask for donations. The process of identifying and developing donors is built on two important principles of fundraising: ask for the money and thank people for giving it. This lesson will explore these concepts, and will also provide useful tools you can use in identifying and developing donors.

Identifying and developing donors.

Effective donor identification and development is the lifeblood of any charitable organization. Donors who are willing and able to support your cause may be closer in reach than you expect.

Start with your network.

Begin your search with those in your organization's network. The information, tools, and resources included in this lesson will help you to map your group's network, offer strategies for effectively developing donors, and illustrate useful techniques for asking for support.

CHAPTER 1: Where Is The Money?

Understanding where charitable donations come from can help you target your potential supporters. Likewise, understanding which organizations receive donations—and learning why people give so greatly to these groups—can help you adjust your own strategies for developing donors. Faith-based groups receive the greatest proportion of charitable gifts—largely because people are motivated to give when they have a personal connection to a cause.

A majority of charitable gifts come from individuals.

According to the Giving USA Foundation’s 2009 report, individuals are the top donors of charitable gifts, providing 75 percent of all gifts received in 2008.  Foundations come in second, providing 13 percent of gifts, and charitable bequests come in third at 7 percent.

Not all individuals donate at equal levels.  In fact, 10 percent of an organization’s donors are likely to provide the bulk of its income.  Here’s a general rule of thumb:

These numbers might look intimidating, as they imply that an organization will need to find a handful of prospects willing to make very significant gifts.  But getting these big-money givers means far fewer donors are needed to meet your fundraising goals.  Instead of paying a little bit of attention to lots of prospective donors, you will need to pay a lot of attention to a few very important prospects.

Faith-based organizations receive the biggest piece of the charitable gifts pie.

Faith-based organizations receive 35 percent of all charitable gifts.  Educational organizations receive 13 percent, and human services and health organizations come in third and fourth, netting 9 percent and 7 percent, respectively.

Getting donations requires that the asker have an established relationship with the giver.  For many people involved in religious communities, this relationship is a stable, significant part of their lives.  Some reasons why people give to religious institutions include:

Think about how you can improve your prospects by applying these motivators to your organization and your cause.

How do you get donations? The basic answer is "ask."

In studies asking why people made their most current donation, 80% answered, "Because someone asked me." Many people want to help but don’t have the time or the resources to go out looking for organizations to give to. In fact, people are more likely to remember something about the person who asked for their donation than the name of the organization to which they actually gave money.

CHAPTER 2: Identifying Donors

The "ABC" approach is useful for figuring out which prospects you can develop into active donors. "A" stands for the prospect’s ability to make a gift of the size you want. "B" is the prospect’s existing or potential belief in or support of your cause. "C" is the contact or connection between your group and the prospect. This is the most important piece of the "ABC" equation.

Look for prospects with ability to donate, belief in your cause, and contact with your group.

Your organization has a broad reach through the personal and professional connections of employees and volunteers. Mapping these networks is a great way to start identifying donors, as an established personal relationship increases the likelihood that prospective donors will give. Once you have created a list, you’ll want to make personal solicitations, focusing on the quality of your interactions with prospects rather than the quantity of contacts you make. Since this approach is more time consuming (but ultimately more likely to be successful), start by looking for people who are worth that much time.

One effective approach to identifying prospects is by using the concept of “ABC”—ability, belief, and contact or connection. The actual order of importance of each element is “CBA”—not “ABC.” Having a contact or connection between your group and a prospect is the most critical piece. Even if a person has the ability to donate and a belief in your cause, lack of contact means you cannot proceed with a personal solicitation.

Start with people you know.

A prospect is more likely to give if the person asking has a personal relationship with him or her.  A 2009 Indiana University/Campbell & Company study examined the characteristics of 8,300 donor households’ largest annual gift.  The results illustrated what fundraisers have often observed:  people are far more likely to give to people they know—especially when the donations are solicited in person.  Donors who were asked in person, by someone they knew, donated 19 percent more ($987, on average) to secular charities—versus solicitations from someone they knew via telephone, mail, or email ($799).

There are three ways in which your organization may have contact with a prospective donor. First, he or she might know a board member, staff member, or volunteer.  Second, he or she might have a second-degree connection to a board member, staff member, or volunteer; for example, they may have a mutual friend (if so, see if the mutual friend will allow you to use their name in soliciting a donation).  Third, the prospect may be an existing donor to your group.  In this case, you don’t necessarily need an established personal connection—you can emphasize your shared commitment to the cause.

You can also look to the following places for potential donor lists:

CHAPTER 3: Developing Donors

Communication with your prospects is a vital part of the gift-giving process. Set goals around how often, and in what ways, you’d like to be in touch. Is once a month too much, or not enough? Would a newsletter be of interest, or would an email blast catch their attention? Communication will be even more effective when it targets people with the greatest potential for donating. Positioning your cause in ways that feel relevant and meaningful to prospects is a key step in asking for their support. Who are these people, what’s important to them, and how can your cause address their needs?

Set goals for developing and engaging donors.

You want donors to give money or other resources that will support your program. They’re a lot more likely to do that if they are invested and engaged in the organization. How can you make that happen? Think about personal goals you can set concerning communication with supporters. How frequently should you be in touch? Once a month? Maybe you want all supporters to visit your website because you have found that being able to see the work increases the size and/or likelihood of a donor’s gift. Set specific goals that fit with your organization and its abilities.

Target the right people so it isn’t hard to "develop" them.

Let’s look more deeply at the “ABC” (ability, belief, contact) approach for identifying prospects. Remember that “CBA” is the actual order of importance. You can determine what makes a prospect “right” by working an existing connection. Perhaps you have something in common: maybe you both donate to your cause already, you both know another donor, or the prospect knows someone in your organization socially or professionally.

It’s key that prospects believe in your cause—and a big part of that is being able to see how a gift might affect them, their community, or those they care about. Many people profess to care about most humanitarian causes. However, most people are more personally affected by what happens in their community, to people with whom they interact on a regular basis. Consider how you can bring your cause closer to the prospect’s personal experience.

In terms of ability, keep in mind that assets like a big house or fancy car could just as easily be indications of debt as indications of wealth. A better indicator is how much the person gives to other groups. Do they attend fundraising dinners and pay a high per-plate cost? What do you know about their discretionary spending? Are they season ticket holders to sports games or theaters? Do they participate in other expensive hobbies?

Remember the principles of value-driven donor development.

Value-driven donor development focuses on aligning what funders want with what you have to offer.  Here’s a brief review of the principles of value-driven donor development:

CHAPTER 4: How To Make The Ask

Asking someone directly for their monetary support is the greatest chance you have of getting it. Research has shown that email blasts and letter campaigns are far less effective than a person-to-person conversation about what your group does and why you need a donor’s support. You increase your chances for obtaining a gift even more when you can find a way to make the donor relate to your cause. How will it directly affect his or her life? What do you do that matters to this donor? And what will their donation enable your group to accomplish? Remember to address what’s in it for the donor. Tax write-offs—for both an individual and a corporation—and having the chance to make a difference can be good motivators.

Know your prospect before asking for their support.

People say the number one reason they don’t give charitably is because they haven’t been asked. The American Red Cross has utilized this message in its "Consider Yourself Asked" ad campaigns geared to motivate blood donations. While the principle behind this campaign is a good one, a mass message blast to "consider yourself asked" is unlikely to generate major-gift support. A personal connection is vital, and so is adequate preparation.

First, know what your prospect is interested in. If you can find the information through research or word of mouth, look for records of or his past donations, membership in professional associations, or participation in other organizations.

Consider what they already know about your group, what they may still need to know, and what they know about your group vs. other groups. A person isn’t likely to make as high a donation as she currently makes to her favorite charity, but you can build up to this level.

With corporate donors, how you position your request can help. For example, make your request less of a sales pitch/solicitation and more of a discussion or exploration of the corporation’s and organization’s mutual interests. See the principles of value-driven donor development for more on this.

Be specific.

Tell prospects specifically why you need their help and what you would do with their money. Is it for a specific program that they’re interested in? Are you expanding to serve more people? Are you going to serve a new neighborhood?

Relate back to why and how it affects the donor or something important to the donor. Make it a narrative, invoke an image, and tell a story. Also mention potential cost benefits to the donor, like tax write-offs.

Make it a dialogue.

Make your request in person whenever possible. It’s much easier to ignore an email or phone solicitation, no matter how formal or well prepared, than it is to say no to an in-person appeal (especially when you’ve organized a meeting with your prospect in advance). If possible, have the person from your group with the most connections to the prospect ask for a donation.

One strategy for negotiating a donation is to discuss a monthly pledge. A $100 annual donation is around $8 per month. Put it in terms donor can easily relate to—on a per-month basis, for example, $8 is only two lattes, or one deli sandwich. Be specific about what that dollar amount will do—what resources it will buy; in what ways the resources will be used; who they will serve; and how it will directly affect the donor, their community, and the people they care about.

Finally, listen to your supporters—and don’t just listen when they give you money. People will have a vested interest in your organization if they are heard. Balance their suggestions with what you know is best for the organization, but always be appreciative of their input and time.

CHAPTER 5: Keeping The Momentum

Expressing your gratitude and making your donors feel appreciated is the best way to ensure they’ll donate again. Get creative about ways to show your appreciation. This doesn’t have to mean throwing gala events or expensive celebrations. Cards, testimonials from people who’ve been positively affected by your work, or donor recognition in a public forum can be just as meaningful and fun.

Appreciate, appreciate, appreciate—and keep in touch.

Thanking your donors is the most effective way to get them to give again.  Expressing gratitude to your donors doesn’t have to be hard work if it becomes an organic part of your organization’s culture to continually engage and appreciate your supporters.  Keep donors in the loop—and personalize communication as much as possible. Consider the most appropriate ways to stay in touch with donors, which might include:

Remain a vocal presence with your donors.  Silence communicates inactivity or a lack of need.  The more personally involved donors are, the fuller their giving is likely to be.  Point out the great stuff that happens when people give!

Celebrate with your donors and recognize their support.

Remember your donors when times are tough and when you have something to celebrate. Research shows there is a relationship between gift amounts and level of recognition received by donors. Donors who report receiving "substantial" recognition for their gifts made larger contributions than those receiving "minimal" or "moderate" recognition. Recognizing donors doesn’t have to mean giving them a tangible reward; in fact, research indicates that, with token recognition, donors may see their gifts more as transactions. Giving a donor more personal recognition can help them understand how their contribution impacts an organization’s work. In turn, that may help move a donor toward making larger philanthropic gifts.

Remember: your supporters are your fan club! As one donor says, "Our chances of being ‘heroes’ are few and far between in life—it feels good to be needed here." You can help empower donors by listening to them. Sometimes donors dream big, and many are willing to make a significant investment if given the opportunity.

Summary

Using the information and tools within this lesson, you can begin generating your own list of prospective donors and opening the doors to effective and ongoing donor development. Remember to find ways to personalize all stages of the giving process for your supporters—from the time you make your first contact, to the donation itself, to the celebration of your group’s success. Thank you for taking the time to learn about identifying and developing donors.

Access additional resources.

Thank you for taking the time to learn about identifying and developing donors.  For further information and additional practical resources, please see the following:

Here are some additional donor development resources.

To explore additional practical resources, please see the following: