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The nifty guide to prospect research and major giving

Executive Summary

Back testing over 2 million donor records showed a strong correlation between specific philanthropy and wealth markers and future philanthropy. Unlike traditional wealth analysis, which has long been the standard for donor prediction in the industry, past philanthropy proved to be a much more accurate indicator of future philanthropy. Wealth, particularly as evidenced by the value of real estate owned by the prospect, correlated with both the inclination to give and the capacity to give. However, stronger predictors of future philanthropy were past giving to the nonprofit, past giving to other nonprofits, political giving, and other factors. Wealth, however, plays a greater role in formulating ask amounts, although philanthropy to other nonprofits is also a significant factor. Formulating an ask amount is a two-step process: determining the prospect’s capacity to give, and analyzing the amount the prospect has given to other nonprofits.

Major Giving Defined

Major giving can vary by amount and type, depending upon the nonprofit and the need: for a smaller nonprofit, a four-figure donation might be a major gift, while larger organizations may consider six- or seven-figure checks a major donation. Major giving can also vary by type: 1. Annual campaign, a gift given in response to an annual fund-raising campaign 2. Event sponsorship, a gift given to partially or completely sponsor an event 3. Capital campaign, a gift given to support a specific purpose or project, such as a new facility, piece of equipment or program 4. Major gift, a gift not given for the previous three reasons 5. Planned giving, a gift given prior to death (annuity-based) or after death (bequests and other gifts from an estate; can take a variety of forms) This white paper will focus on the first four types of gifts, because the donors and the strategies for identifying them are similar. Planned giving donors, and the markers that identify them, vary greatly from other types of prospects in significant ways. This is not to discount the value of a planned giving campaign: according to Giving USA 2015, bequests totaled $28.13 billion in 2014, or 8% of all charitable donations ($358.38 billion). Of the total amount, individuals gave 72%, foundations 15% and corporations 5%.

Stratification Among Major Givers

Nonprofit donors fall into three groups based on the amount of donations, which require three different types of engagement strategies:

Major-Donor Giving

Includes
  • Capital and special campaigns
  • Major gifts from individuals
  • Major grants
  • Complex deferred gifts/planned giving

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By donorsearch

3 Donor Acquisition Tips (Hint: Prospect Research Can Help)

Guest Post by Gretchen Barry, Director of Marketing at NonProfitEasy Imagine you’re having a birthday party. You have spent all month planning. The balloons are inflated. The cake is frosted. The piñata is stuffed. The big day finally arrives and no one comes. You forgot to send out the invitations! Like a party with no guests, a nonprofit without donors won’t succeed. Donor acquisition is a key component of a thriving nonprofit. Organizations rely on the money they have raised in order to carry out their missions. In 2013, $335.17 billion was donated to US-based charitable causes. That is a ton of money, and your organization deserves a piece of it. By implementing an effective donor acquisition strategy, you will be well-funded and well on your way to making a difference for your cause. Follow the tips below to build a strong foundation for the expansion of your community of donors.

1) CURATE AN ACTIVE ONLINE PRESENCE

Curating an active online presence is a great way to promote your nonprofit to prospects while furthering your organization’s relationships with its current donors. To continue the birthday analogy from earlier, online nonprofit promotion is just like generating buzz around an upcoming party. To better understand internet promotion, let’s breakdown the ways in which an organization can market itself online.
  1. Social Media — When someone follows you on social media, that person typically did so because he wants to know more about your nonprofit. Use your various social media accounts to educate those who are interested in your organization. Make sure you include the important things: your mission, what your organization does, how one can get involved, and how one can donate. Your goal should be to further engage by, for example, getting email addresses.
  2. Search Engine Marketing (SEM) — This option has a few costs attached to it, but it can be well worth the money. By advertising through search engines, like Google, you are raising awareness of your cause and drawing potential donors to your website.
  3. Email — Email campaigns are a great way to keep your organization fresh in the minds of donors by maintaining open lines of communication. Strike a balance between constant contact and aloofness by varying the type of content you send and the frequency with which you send it. Don’t always ask for donations in your emails. Diversify your messages with educational content and updates on the progress your nonprofit has made. When handled correctly, email is a powerful way to acquire donors.

2) OUTLINE HOW FUNDS ARE ALLOCATED 

Just like a party guest wants to know the details of the event he’s attending, a donor wants to know the details of how his money is spent. People donate because they want help your cause, then they want to know how they’ve helped. So give the people what they want, results! If you detail how funds are implemented, your supporters will be more comfortable in their decision to donate their hard-earned money. You can make the donation trail transparent using a multitude of methods. Email out the specifics of recent organizational achievements thanks to generous donations. Actively post pictures and write-ups of your organization’s accomplishments on your social media sites. Include a sampling of all your good work on your website. Use direct mail to give donors an update on how their funds have helped.

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By chris

2 Types of Donor Data Your Nonprofit Needs

With the rise of the internet and social media, it’s possible to find information about almost everybody and everything. Whether you’re collecting data on a new renter, a potential employee or a prospective donor, knowing which information to use is important. Fundraisers have an array of tasks, but learning all they can about their donors in order to build and cultivate relationships is among the most vital. From their home address to their financial investments, collecting important data about donors can help nonprofits build rapport, as well as discover their next major gift donors. Different kinds of data can be discovered in a multitude of ways, but two of important sets of data are wealth information and personal information.

Wealth Information:

Knowing a donor’s financial information can be extremely beneficial, specifically when planning upcoming campaigns and fundraisers. This information is often available through wealth screening. Wealth screening helps give your organization a picture of your prospects and their financial situations so that you know how to appropriately solicit them for gifts. Wealth screening can also help you find your next major gift prospect. Important information to look for from wealth screening includes:
  • Giving history: Knowing where a prospect has donated, how much and how frequently can give you an idea of how philanthropic they are and what types of organizations they support, as well as the typical gift amount that they make.
  • Investments: Does the prospect own a yacht? A home? A business? Stocks? Knowing a donor’s investments – how much and where they’re allocated – can help you determine their financial standing, as well as their interests.
  • Business relationships: A particular donor may work for a company that is active in the nonprofit world, and that could be a great opportunity for your organization. If the prospect’s company makes frequent gifts to charitable organizations or makes matching donations, the prospect may be a great gateway into the organization’s philanthropic involvement.

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By donorsearch

9 Rules for Ethical Prospect Research

From social media to blogs to 24/7 news services, there is more information on people available than ever before. You just have to know how to look for it. Some people know how to block their online profiles from public view or limit the exposure of any online content about them. This is less a problem of making friends than it is a conundrum for prospect researchers who are trying to learn as much as they can about potential donors. Should nonprofits seek ways to obtain the purposefully hidden information? What are the limits to any workarounds? The ethics of any topic is a debate that could last forever, but your organization doesn’t have forever to figure out right and wrong ways to raise money. You have a cause to fund, and without detailed donor profiles you can’t make the types of emotional pitches that excite donors about your organization. We’ve compiled nine best practices to help your organization conduct prospect research in a way that’s both effective and respectful of sensitive information.

1) Focus on acceptable data

It’s obvious that you shouldn’t pursue records that are illegal to obtain, but just because certain records are legal doesn’t mean that you should be looking at them. For example, you may be able to obtain criminal records on a prospect, but for what purpose? Prospect research is not about obtaining any and all donor information in the hope that some data point may be the nugget of gold that you’re looking for. All data should follow two rules:
  1. Be appropriate and pertinent to the specific fundraising campaign and prospect.
  2. Protect all personal information at all times.

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By chris

Donor Stewardship Expert Advice Featuring Bill!

Looking for donor stewardship strategies? NonProfitEasy has put together a list of stewardship advice featuring Bill Tedesco, CEO of DonorSearch, among 28 other nonprofit experts. Bill emphasizes the importance of engaging donors of all levels, advising that: “Prospect research can help your front-line fundraisers identify which donors have the capacity to give a major gift and a history of past philanthropy. This will enable your development team to ensure that those major donors receive excellent stewardship to keep them engaged for years to come!”

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By donorsearch

Annual Giving: Prospects and Approaches

For most nonprofits, annual giving campaigns generate the highest number of gifts though major giving campaigns can provide more total revenue. Annual giving campaigns can generate loyalty as well as revenue, and are flexible and relatively cost-effective. Certain philanthropy and wealth markers can predict the best prospects for annual giving campaigns, including previous giving, giving to other nonprofits, high dollar real estate ownership, and other factors. Because annual giving and major giving campaigns have different goals, strategies, and resources, both can be managed concurrently:

Annual Giving Defined

Annual gifts are gifts solicited and given on a regular, on-going basis, and are typically unrestricted (that is, available to a nonprofit for any use). Some organizations conduct a campaign annually, some quarterly, and some follow a different schedule. Unlike a capital campaign, which is typically a campaign to raise funds for a specific, tangible goal (new equipment, new facility, new program), or a major giving campaign, which cultivates only large gifts, an annual giving campaign concentrates on generating a large number of smaller gifts. Usually, funds from annual giving campaigns are used for day-to-day operations, paying debts, and other ongoing budgetary needs. For many nonprofits, annual giving represents the majority of gifts received, surpassing the number of gifts received from major and planned givers and events.

Benefits of Annual Giving

  • Donations are normally unrestricted and can be used for any purpose
  • Campaigns can be conducted at any time
  • Prospects can be segmented, and multiple strategies can be used to involve board members, staffers, and volunteers
  • Campaigns offer opportunities for ongoing communications with prospects
  • Annual campaigns build donor loyalty
  • Annual campaigns are the best introduction to the nonprofit for a new donor
  • Income is relatively predictable in terms of amount and timing
  • Pledges and other strategies can provide an ongoing revenue stream
  • Campaigns can be easily modified at any time

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By donorsearch

5 Common Mistakes Major Gift Officers Make (And How to Avoid Them)

At DonorSearch, we love providing useful fundraising tips for major gift officers through our blog. So we asked our friends at DoJiggy to share some common major gift officer mistakes and how organizations can avoid them.  In the world of fundraising, major gifts can be transformational for an organization. Many nonprofit organizations realize that major gifts often require substantial cultivation but are very high value and crucial for the organization’s cause. This is where major gift officers play a critical role. A major gift officer specializes in cultivating successful relationships with these high-level donors over an extended period of time. However, there are plenty of common mistakes that can harm the success of the relationship your team is trying to cultivate.

Mistake #1: Lack of Preparation

Meeting with a major donor is one of the most important aspects of a gift officer’s job. It gives you the opportunity to let your organization and cause shine and is essential to the long-term success of the relationship. Do not show up to these meetings unprepared, thinking you can just wing it. Unfortunately, this often shows. Major donors’ time is very valuable, and they may take exception if they feel the other party is unprepared. Don’t waste this valuable time! The key here isn’t just to be prepared for your meeting; it’s to tailor the meeting to your client’s needs and wants. Be clear about the purpose of the meeting, and its agenda. Also, make sure to do your research about the donor or prospect prior to the meeting. Anticipate their questions, practice your answers. Make sure you have materials on hand that the donor might ask for, like brochures, videos, or other paraphernalia.

Mistake #2: Making the Meeting All About You

Meetings with donors are a great place to talk about your organization and your cause. But it’s a mistake to make the meeting 100% one-sided. This can very easily make the donor feel like they are being talked at, not talked with. You want to have a conversation with them – which involves give and take. Do talk about your organization, but listen more than you talk. Ask questions, and listen to the answers. Viewpoint questions are an excellent way to get a prospect to open up and for you to learn more about them. Ask about why your cause is important to them, what motivates them to donate, and what they like best (and least). Take notes about what they say. Notes aren’t just useful for later follow-up; it also shows the prospect that you care enough about their opinions and answers to write down what they tell you.

Mistake #3: Lack of Follow Up

Many major gift officers can fall into the trap of not following up appropriately, or worse – not following up at all. If you listen to your donor during the meeting, take the right notes, and ask the right questions, following up is a simple but essential task. You don’t want to be a pest, but following up after a meeting can be as simple and thanking them for their time. If they had any questions that you couldn’t answer on the spot, make sure you follow up with the answers. The follow-up is also a great time to set up your next meeting and keeps the relationship’s momentum going. Some of these tasks can be managed automatically when using donation software. You can automatically generate “thank you” emails, or set a reminder for a follow-up call. You can also gather and store donor information, so you know exactly what was discussed and be better prepared for your next meeting.

Mistake #4: Not Making the “Ask”

As a major gift officer, you can do everything perfectly, but if you don’t ask for the donation, many times you won’t get it. Or if you do get a donation, it may not be the amount that you are looking to obtain. Sometimes newer gift officers are afraid of asking, or worse – afraid of the dreaded “no.” There will be “No’s” and that’s okay, you can’t win 100% of the time. But asking is an important part of the process, and so is your attitude. Prepare for a no, expect a yes. If you go in expecting a no, it shows – and you will end up with a no more often than not. Set up a meeting beforehand, and be transparent about your agenda. Let the donor know that you will be asking so that they can prepare ahead of time. Prepare well beforehand, and know exactly what you are asking for, why you’re asking, and a certain amount. If possible, ask in a way that shows it’s for something specific. “Would you be willing to donate $5,000 to help feed 500 families?” is a lot more effective than “Would you be willing to donate some money to our organization?”

Mistake #5: Not Thanking Them or Giving Proper Recognition

Both acknowledging and thanking your high-level donors is important. It should go without saying that every donor should receive some kind of formal “thank you.” This courtesy is a great way to show how appreciative you are of the donation, and the effect that has on your organization. Give them a concrete example to show how their donation made a difference. Example: if your organization helps to supply clean water, demonstrate how many families now have clean water thanks to their particular donation. This will make your next ask even easier, as they will realize that their funds made a real impact. Recognition takes the “thank you” one step farther and separates out major gift donors from other supporters. It puts them in a different class, and makes them feel special that you are showcasing their generosity

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By chris

Prospect Research for Religious Organizations

Fundraising is not a passive activity. Just like any other nonprofit, religious organizations need to get active and call prospects, host events, and engage donors in order to raise the funds that allow them to operate at full capacity. To boost your church fundraising efforts, we’ll answer:
  1. Why do faith-based organizations need prospect research?
  2. How is prospect screening unique for faith-based organizations?
  3. Who should you focus on?
  4. When should you screen?
  5. Where to do screenings?
  6. What are the benefits of screening?
Keep reading to learn more! jQuery(window).on("hashchange", function () { window.scrollTo(window.scrollX, window.scrollY - 200); });

Why do faith-based organizations need prospect research?

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