- Past Charitable Giving to Your Organization
- Past Charitable Giving to Other Nonprofit Organizations
- Involvement in Nonprofits as a Foundation Trustee or Director
- Political Giving
- Real Estate Ownership
Loyal donors are a nonprofit organization’s best friend. Donors that have given charitably in the past are more likely than the average individual to give in the future. Of all factors analyzed, past giving to a nonprofit is the strongest predictor of future philanthropy. The evidence is right there in the data. We know that this may seem like a straightforward conclusion, but it’s crucial to note. Too many nonprofits don’t place enough emphasis on donor retention, and, as a result, miss out on the opportunity to upgrade high-quality, existing donors. Don’t miss out! To quantify previous giving, use an RFM score. An RFM score serves as an internal analysis of the relationship you have with each of your prospects. An RFM score factors in three pieces of data:
- Recency of giving: How recently has an individual made a charitable donation?
- Frequency of giving: How often has an individual donated? (i.e., weekly, monthly, annually)
- Monetary contribution: How much has an individual given?
Philanthropic giving to other nonprofit organizations is the second most predictive sign of future giving. It makes sense intuitively – people who are already philanthropic are more likely than the average person to give charitably. What’s particularly interesting is how powerful a predictor this is:
- Individuals who have made a gift of over $100k to a nonprofit are 32 times more likely to make a charitable donation elsewhere.
- Individuals who have made a gift of $50k – $100k to a nonprofit are 25 times more likely to make a charitable donation elsewhere.
- Individuals who have made a gift of $10k – $25k to a nonprofit are 10 times more likely to make a charitable donation elsewhere.
- Individuals who have made a gift of $5k – $10k to a nonprofit are 5 times more likely to make a charitable donation elsewhere.
Based on the analysis of charitable giving to over 400 nonprofits, a prospect’s participation as a foundation trustee or nonprofit director is a more powerful signal of future philanthropy than any wealth indicator. Why? These prospects understand the importance of philanthropy and the work nonprofits do because they have firsthand experience. When you make your fundraising case to them, they’re more inclined to understand where you’re coming from and where’d like to go better than any other prospect. Simply put, their ingrained knowledge of the fundraising world is a huge benefit to your cultivation process. Once you’ve successfully acquired a donation from them, there are more benefits to come. These prospects are valuable because of the connections they bring. Any given foundation trustee or board member is bound to have ties to the other members of their foundation or nonprofit board. And those other members can become high-quality future prospects, too! Any experienced major gift officer will tell you how difficult it can be to get your foot in the door with a high-quality prospect. Once you’ve developed relationships with a group of foundation trustees or board members, you can ask them to make introductions to other top-notch prospects. From there, the introduction cycle continues!
Political giving is another excellent predictor of future giving. A single lifetime FEC gift of $250 puts your constituent into the top 6% of the US population. What’s more, a single lifetime FEC gift of $1,000 puts your constituent into the top one tenth of one percent. The predictive power of political giving is huge:
- An individual who has given at least $2,500 in his/her lifetime to federal political campaigns is 14 times more likely to give a philanthropic donation than someone who has not.
- An individual who has given at least $500 in his/her lifetime to federal political campaigns is 5 times more likely to give a philanthropic donation than someone who has not.
- The size of a prospect’s past political gifts can clue you in to the giving capacity of a particular candidate.
- Anyone who gives a political donation is clearly open to making a donation to a cause they feel passionate about. If you can strike a similar chord in your communications with those prospects, you’ll have a greater chance of securing a gift.
The last factor we will focus on is real estate ownership. Given the limits of wealth screening, this is the only true wealth indicator to have made it on our list. Here is what we found:
- An individual that owns $2+ million worth of real estate is 17 times more likely to give philanthropically than the average person.
- An individual that owns $1-2 million worth of real estate is 4 times more likely to give philanthropically than the average person.
- An individual that owns $750K – 1 million worth of real estate is 2 times more likely to give philanthropically than the average person.