Tag Archives: $50 Donors

Is it Worth Investing in Electronic Prospect Research Screening for Your Nonprofit?

Prospect ResearchWhen researching a prospective donor for an initial gift, or possibly an upgraded gift, many nonprofits stop and question, “Is it worth investing in electronic prospect research screening? Is it the path to the pot of gold? Or, is it too general to be helpful to your nonprofit (i.e. does it matter if they gave their medical school or a local women’s shelter if you are a religious organization?)”

Here are the Pros and Cons of Electronic Prospect Research Screening

The Pros:

  • Research is super fun for data geeks and sociologists alike. That’s because good donor research output will give you a snapshot of publicly available data that includes:
    • Previous giving history- how much have they given to others
    • Political giving –a strong indicator of their philanthropic mindset
    • Real estate estimates (they own how many houses????)
    • Business data (they are the CEO of what public company?)
    • SEC information including shares and market values of public transactions
    • Boards they may sit on
  • Previous giving history can help you adjust your expectations. Rarely, do donors jump from $1,000 to $100,000.
  • It can help you understand where passions lie. If they have donated to a local Food Insecurity Initiative, a local hospital and a local private K-12 school, they are probably like to give locally to organizations that build relationships or where they already have connections.
  • Understanding their political giving will help you deepen the picture of who they are and what they value. Do they donate to more Republican or Democrat causes? Town-focused, State-wide or National? Small amounts to individuals or large amounts to PACs?

The Cons:

  • All that data can be a rabbit hole that sucks hours of your day. And that’s just for one interesting person. Sometimes too much data is just too much.
  • Anecdotal information is not included. Anyone being considered for a major gift would, ideally, already be associated with your nonprofit. That means someone should know their connection point, recent conversations, and how they feel about your organization.
  • It is just data and doesn’t let you know if it is a personal gift. If they gave to a children’s hospital because they helped a family member, or they donate to the women’s shelter because their sister is on the board, that is a very different type of gift than general support because they think it is a good cause.
  • Common names skew results. Someone must go through each prospect and realize if it is the right Larry Smith or David Weinstein. One can probably give $1,000,000 and the other $1,000. That is a very different ask.
  • Just because they have the capacity and have given to your nonprofit, that doesn’t mean they want to give more. Of course, your job is to convince them otherwise, but be patient. 10 years of $50 gifts are still valuable to your nonprofit. And consecutive years of giving demonstrate loyalty the might lead to a bequest or other planned gift.

Is it worth investing in Electronic Prospect Research Screening?

In my opinion, yes. It will save you hours on Google getting basic information and some services (like DonorSearch) provide you with an impressive amount of detail about your prospects. But, like so many things in life, paying someone else to do the screening is in actuality buying you time to other aspects of fundraising and development.  Prospect research is not the end-all, be-all solution we would like it to be. But, it is an important step towards knowing your donors.

This Summer, Focus On $50 Donations – 7 Reasons Why

Focus on $50 Donors

As fundraisers, we spend a lot of time on major donors–whether finding, cultivating, asking, and/or stewarding them. It seems to make sense, it’s quite difficult to meet your annual goal $50 at a time.  But, that doesn’t mean that the smaller donors are not essential to your organization.  In fact, they may be more valuable. That is why, this summer you should consider something different and focus on $50 donations.

Fewer people are donating money.  The Chronicle of Philanthropy highlighted this shift to fewer donors giving larger amounts in a special report, The Disappearing Donor. (Note: These articles are “Premium”, you might not be able to read them unless you subscribe or visit a library.)

There is a reduction in the number of donors over the past 20+ years according to “Where Are My Donors?  At the same time Giving USA listed increased annual donations for the prior three years, the report indicated that in  “2014, the latest year for which data is available, 56 percent of American households made a charitable donation. In 2000, that number was 10 percentage points higher, according to the Indiana University Lilly Family School of Philanthropy … Giving declined across every age group and every income and education level.”

How can you ensure you will have enough donors for years to come? Here are 7 reasons to focus on $50 donations.

  1. Smaller donors can be amazing advocates for the nonprofit. Some major donors only want to give money and not be bothered again. Smaller donors may do more – be more involved, share excitement as they learn more and, invest more over time.
  2. It doesn’t have to take more time to cultivate 100 $50 donors vs. a single $5,000 donor. Think about it for a minute.  For the 100 donors, you have to spend time segmenting interests, writing letters, emailing, sending articles/invitations (or other stewardship touches) and encouraging deeper engagement.  For an individual $5,000 donor you have to consider their interests, write a major donor letter, determine who will personalize it, find a time for that person to actually sign it, schedule times to meet with that donor throughout the year, consider personalized stewardship opportunities, and a calendar to ensure they will get done. At larger nonprofits, major donors are served by major gifts officers while other donors are often personally ignored. At small and mid-sized nonprofits, it is a matter of prioritization. Major donors cannot get all of the attention.
  3. $50 donors do not always stay $50 donors. Everyone has an entry level gift they give to nonprofits.  Whether consciously or unconsciously, they are testing the nonprofit to see how they are treated, how their investment is used, and whether they will give again in the future.  How will you treat them, how is their investment being employed and how will you encourage future giving?
  4. 20 years of smaller gifts can mean as much to a nonprofit as a major gift. If you have not yet started to track lifetime giving, now is the time to compile a list of 10+ year donors. Do you have some who have given for 25 years? Those are valuable donors who probably don’t get enough appreciation.
  5. Fewer small donations mean fewer donors in the major gifts pipeline. Ok, that brings us back to a major donor focus, but development has to have a dual strategy. You have to retain major donors and smaller contributors. It can take years of stewardship to upgrade a donor (10-15 touches) so focusing on smaller donors is not a one-time approach.
  6. You are laying the seeds for financial sustainability. Making your budget this year is important, but so is next year and the next year. One major donor can change their mind. All 100 of your $50 donors are less likely to shift priorities during any one year.
  7. Let’s take back the 80/20 rule (80% of the funding comes from 20% of donors). We have seen the 80/20 rule turn into the 90/10 rule.  #7 is similar to #6, but we want it to be stressed again and again. Putting numbers to your situation will provide clarity. One donor who decides that this year they want to support their congregation’s capital campaign instead of their child’s school fundraiser can shift the stability of both.  The more donors, the less the impact of any one gift.

A culture of giving to nonprofits is important for society, in general. No matter what tribe you associate with (political, religious, geographic, demographic, favorite social media, etc.), we don’t want to live as isolationists. We want to help others, that is why we work in the nonprofit sector.

Some want to raise money for a longtime church member’s grandchild in need of surgery and provide medical facilities with money for research the next day.  Others understand how important it is to help religious and academic institutions cover scholarships because dues and tuitions don’t provide enough. Maybe you see that there are buildings in need of repair and cities and towns without the room in their budgets to ensure clean, safe buildings.  We are a society that relies on each other but is in denial about our own part of the ecosystem. As donors decrease, the needs do not.  So encourage those lower level gifts, and value each and every donor. It will make a difference now, and in twenty years.

Read more about donor retention:

Creating a Monthly Giving Program: A Solution to Donor Retention and Financial Sustainability

Learn How an NPR Donor Drive Will Increase Your Donor Retention

It’s Time for You to Evaluate Donor Retention For the Past Year