3 ways nonprofits can identify major gifts prospects
Identifying prospects during fundraising campaigns can be a difficult task for nonprofits. Often organizations aren’t able to fully target individuals and donor segments as accurately as they should, which means they waste time and resources trying to reach out to prospects that likely won’t provide a return on investment. During the economic recession, the nonprofit groups that proved to be the most successful worked hard to contact donors interested in providing major gifts and larger donations. In fact, a recent study by the Association for Healthcare Philanthropy, cited by the Chronicle of Philanthropy, looked into the fundraising strategy of more than 300 hospitals and medical centers and focused on 45 of them to identify effective tactics.
The report looked at the amount of revenue these healthcare nonprofits raised in comparison to overhead expenses between 2007 and 2012. The 12 highest earners – those that raised an annual average of nearly 11 million dollars – were able to collect more than four times the number of donations collected by other organizations participating in the study. The Chronicle explained that the 12 leading organizations spent in excess of $900,000 on fundraising efforts and paying staff members in support of these initiatives. Meanwhile, nonprofits that saw lower levels of donor participation spent just under $300,000 annually. While every charitable group has a specified amount of money available to put toward fundraising projects, the study seems to indicate the more financial support a campaign has, the better the results. However, it’s not as simple as throwing more money into programs. Instead, expert employees have a substantial impact on the success of fundraisers.
The AHP study revealed the majority of the fundraising budget went to hiring individuals who would directly support projects aimed at getting the attention of major giving prospects. The top performers had an average staff of 15 people compared to just six workers at nonprofits that raised less money. The focus of healthcare organizations was on donor management, as the nonprofit hospitals earning the most contributions had roughly 13 employees on average dedicated to keeping in touch with donors and prospects. At the same time, the more tenure fundraisers had with their nonprofit organizations also correlated to stronger donation results.
To achieve this strong financial outcome, nonprofit groups have to understand donors to a greater extent. Part of the equation is having the requisite staff to do so, but organizations must also invest in technology to aggregate and understand various subsets of data. Business 2 Community suggested nonprofits look at:
- Previous gifts to the nonprofit
- Giving history to other organizations
- Past work on a board of directors or foundation
By looking at these variables, charitable groups can identify specific behaviors that help to show whether people will be strong candidates to provide major gifts. In looking at previous donations, nonprofits should keep track of how often individuals have given in the past, how much they contribute and record when the last donation occurred.