New fundraisers looking for donor upgrades are all too likely to fall into a common trap: believing that donor capacity is the best predictor of a donor’s likeliness to upgrade.
As my colleague Austin Detwiler points out, that simply isn’t true. Greater capacity is necessary for an increase in giving level, but it’s not sufficient. Wealth alone doesn’t make someone a good donor prospect. America is a wealthy country; far more people than you could ever meet or mail have the capacity to give $5,000, $10,000, or more.
So how do you identify good donor prospects? Once you’ve used wealth screening to determine who has additional capacity, how do you decide whom to focus your efforts on?
The first important step is not to be distracted by the highest-worth donors. A current donor contributing $5,000 per year to your organization who is worth $500 million isn’t a more important target than a $5,000 donor worth $50 million. You shouldn’t rush out and immediately ask either for a seven-figure gift—and, in fact, your next several years of cultivation might look almost identical.
The key is to move beyond wealth to assessing donor propensity, which is far trickier than identifying capacity. Wealth is concretely trackable to a certain degree, thanks to disclosure requirements ranging from real estate records to SEC filings. (Note that wealth can be and often is held in ways that are invisible to wealth screening products—so a low wealth rating only means that we don’t know what their wealth is, not that it is low!)
That doesn’t mean determining propensity is impossible to gauge, though. Let’s look at how to go about it.
There’s no substitute for donations—as we always say, your next major donor is already giving to you in smaller amounts. Don’t just look for the size of the donation, though. Look for longevity—have they been giving to you for many years? Look for frequency as well—do they give several times per year in response to many of your solicitation pieces?
Beyond contributions themselves, the single greatest indicator of propensity to upgrade is existing interaction levels with your organization.
Wealthy people with high propensity aren’t just involved in your organization through their checkbooks. They open your emails, update their contact information with you, volunteer for you, refer people to your programs, and so on. They’re not just connected to you financially—they’re involved emotionally.
Many nonprofits don’t have good data on these types of donor interactions, or struggle to reconcile data from their email program with their donor CRM. But here’s reason to work on that: assessing non-donation activity matters for estimating propensity to upgrade.
Identifying best donor prospects is an inexact science, but that doesn’t make the process opaque. The steps are fairly straightforward:
1. Explore who is already in your database;
2. Overlay data like wealth screening to determine donors whose capacity far outstrips their current giving;
3. Examine a donor’s activity—where propensity starts to come into view; and
4. Using your data on activity, prioritize donors with long-time allegiance and frequent involvement in multiple ways (e.g., they are volunteers as well as donors).
It should come as no surprise that passion for your mission, as well as giving capacity, is predictive of which prospective donors are most likely to give—and give big—to your organization. That said, the most effective method for identifying those major prospects differs from the best way to assess current donor propensity.
The method for sniffing out major prospects may seem counterintuitive at first: it’s to assess their relationships with the “competition.”
Look for people who are highly involved with organizations closely aligned in mission and outlook with your own. You may think that these people are already “taken”; that their loyalty can’t be to two organizations pursuing similar outcomes.
The truth is that the average major donor gives to five or six (or more!) nonprofits in any given year. And within that bucket, there is usually significant overlap in mission. Cutthroat corporate models of consumer competition are a poor fit for analyzing nonprofit donations. An executive may have a difficult time convincing a Mac person to use a PC—those loyalties are often set in stone.
A donor who gives to a similar organization is likely to have a high propensity to give to yours. You’re not trying to snatch donors away; you’re expanding their giving portfolio and giving the donor an opportunity to become even more involved in a cause that you all care about.
Lastly, it’s important to keep in mind that because propensity rating is an inexact science, the easiest way to get a true measure of a donor’s inclination to upgrade is to ask them.
Good major gifts officers or staff having phone calls with donors will often ask questions designed to tease out how a donor relates to an organization and a cause:
1. Where does our organization rank in terms of importance amongst all the causes you support?
2. What does this mission mean to you? How did you first become passionate about this effort?
3. When you think about organizations that you’ve gotten more deeply involved with and supported at higher levels over the years, what are the characteristics that gave you confidence in them?
Emailed or mailed surveys can be a good tool as well. Sometimes donors will say things in a survey that they won’t say out loud to a trusted contact in person, and surveys can quickly provide information on hundreds of potential major donors at once.
When in doubt, always ask!