Identifying Donor Prospects

The Only Difference is Zeros: 10 Steps to Improved Nonprofit Development and Fundraising

Step #4: Identifying your Donor Prospects

One of the most critical steps in achieving improved development and fundraising for your organization is also one of the most energizing—putting down on paper for the first time a list of actual names that represent potential donors. And truth be told, there are as many ways to identify potential donors as there are donors themselves. While there are a handful of consistent characteristics found in each prospecting model, what is most important is whatever process you choose to identify potential donors, embrace it, use it, work it, and measure the results.

I have found that no matter the fundraising effort, capital campaign, or major gift effort, there are three fail-safe questions to ask to determine if the potential donor is truly a “prospect” rather than a “suspect”:

1.   Does the name in question have the financial ability to donate?

2.   Does the name in question have the willingness to participate?

3.   Is there someone on staff, or do we know someone, who can initiate?

There are situations where a certain person may be a HUGE fan of your organization and the work you do—but they are not in a financial position to donate at the level you may be seeking. Or, on the other hand, the person may have HUGE financial resources but has either shown very little interest in your organization in the past, or perhaps has never been exposed to the great work you do. In both instances, and while this is no reason to exclude them from your target list, it means the solicitation/donation process will be harder and take more time.

Once you have formulated your potential donor list based on the preliminary qualifications of one, they do the financial ability to donate, and two, they do have the willingness to participate (meaning the person seems to have a pre-disposition and affinity for your organization or cause), the third and final filter questions is this, “Is there someone on staff, or do we know someone, who can initiate an introduction to this person, or better yet, help initiate a presentation meeting with the potential donor? Is there a supporter of your organization (Board member/Advisory Board member/existing high-level donor/corporate sponsor) that would be willing to provide an “I know this organization and you will want to know them, too” introduction on your behalf?

With myriad organizations doing splendid work, and an endless array of opportunities for donors to contribute and make a positive difference, what becomes the game-changer in prompting a high net-worth individual or a philanthropically-minded family to choose to investigate and explore your organization? Time and time again that game-changer is the potential donor is familiar with, does business with, or admires the person who makes the call or sends the e-mail on behalf of your organization.

As you further refine your list of potential donors, remember Step #3 (Information is Currency), and begin to search out as much information as you can about those names that have risen to the top of your list. What charitable organizations have they supported in the past? What are the nonprofit boards they currently serve on, or have served on in the past? When they support an organization, is it in name and contribution only, or do they become actively engaged in furthering the mission of that organization?

Finally, if you are the person in your organization who leads the development effort, or you are a member of the fundraising team, remember that you have no greater ally than your active, researched and confidential list of potential donors. As charitable giving is most oftentimes a very deep and personal process and experience for the donor, you must also view the very formulation of your prospect list as not only essential and invaluable, but it must be handled with sensitivity and discretion.

While there obviously comes the moment when the time for preparation is over and the time for action and results begins, the focus, energy and care spent in formulating your list of potential donors will undoubtedly yield positive fundraising results—now and in the future.

Next Installment: Step #5: Get Inside the Door!

This is the fourth part of a 10-part series The Only Difference is Zeros: 10 Steps to Improved Nonprofit Development and Fundraising

-Don Stirling

Excellence in Giving

Not too long ago I had the opportunity to listen to a wonderful speech that was given by Thomas Tierney, chairman and cofounder of Bridgespan, at the 2009 Philanthropy Roundtable Annual Meeting.  For those who have not had the opportunity to listen to it, the speech can now be found on the Philanthropy Roundtable’s website. It was a refreshing oration which I believe every donor (and nonprofit leader) would benefit from listening to. One of the focuses of the speech was to identify several brutal facts facing donors who are seeking to achieve greater impact through their contributions. Since this year, more than any other in recent memory, donors are interested in seeing their seeing their contributions stretched a little further to help more people, recognizing these facts is essential if you want to optimize the impact your philanthropy is having.  

The first brutal fact that Tierney identifies is that donors are only as good as the organizations they give to. This becomes particularly tricky when a donor considers the sheer number of nonprofits that are out there – more than a million at the latest count.

The second fact is that excellence in giving is self-imposed. It is very easy for a donor interested in average returns to stroke a check to the organization of his choice and continue on his or her merry way.  However, donors who want to see more children helped with their donation must raise the bar in their giving.  It was easy to appreciate his view that, unlike the for-profit sector, there are no predators in the nonprofit world.  In other words, if a charity underperforms, there is no larger charity that will come and absorb it. Underperformers, although often quite well-intentioned, abound in this sector.  It is left up to the donor to determine what nonprofits meet their high expectations.

The third fact that donors must face is that there are obstacles and handicaps that appear in the nonprofit sector, which are not present in the for-profit world that most donors are familiar with.  There are no capital markets for nonprofits, nor any sort of pipeline for identifying and promoting talent. Effective nonprofits must be repeatedly asking themselves the difficult questions about how they define success and how they are going to achieve that vision if they want to have the kind of impact that discerning donors are looking for.

Compound those brutal facts by this week’s press release issued by a collaborative of nonprofit watchdogs, including GuideStar and Charity Navigator, which essentially encouraged donors not to rely on overhead and fundraising ratios as a measurement of effectiveness in their favorite nonprofits: tools that have been historically used to determine a nonprofit’s efficiency.

I completely agree with what the press release had to say.  Overhead ratios do not relate to the impact that a nonprofit is having on its target population.  Not to mention these ratios encourage nonprofits to sacrifice investing in resources and talent that would increase their effectiveness but would negatively affect their ratio. On top of it all, I have never seen two nonprofits interpret the rules for determining overhead costs in the same way.

So what does that leave donors? Since excellence is self-imposed, how can donors interested in achieving more than average returns on their donation navigate the obstacles presented by the nonprofit world and find the partners that deliver the results the donor is looking for? It can be terribly overwhelming. The good news is…there is help. 

Our role at Operation Kids is to provide the research and resources necessary so that our clients can make informed giving decisions and achieve the impact they are hoping for – without taking any fees. We do this because we firmly believe that more donors giving to more effective charities results in more lives changed. If you are interested in raising the bar in your charitable giving this holiday season (or any time), contact us and see if we can help you.

 -Christopher Lindsay