Right donor, right time: the case for fundraising intelligence

What is fundraising intelligence? Learn more in this guest blog post.

The following is a guest blog post by Ryan McCarvill of iWave.

Fundraising Intelligence Defined

Donating time and money for the betterment of others is a foundational part of the human experience.  But as nonprofits become increasingly reliant on major personal donations from wealthy individuals, identifying potential donors and establishing lasting relationships with them paramount to fundraising success.

The traditional approach to deciding which relationships to cultivate has been to focus on prospective donors who are simply “wealthy.” However, if you are not also considering a prospect’s philanthropic “fit”, you are missing out. Prospect researchers and fundraisers — and nonprofit management at large — must look for evidence of giving history and a personal connection to a nonprofit’s mission.

This proof of propensity and affinity, when measured with and against a prospect’s wealth capacity, is key to developing fundraising intelligence: an informed, evidence-based major gift ask.  Fundraising intelligence is a proven strategy for nonprofit professionals to develop an understanding about donors individually and as a whole.  In this way, you can confidently present the right ask to the right person at the right time.

Who Is Your Ideal Major Gift Prospect?

Major gifts are the largest donations a nonprofit organization receives.  But the exact dollar amount varies.  The size of a gift depends on the organization’s service, operating budget, community, and fundraising base (local, regional, or international).  Major gifts make up close to 80% of an organization’s total funding for a given year, and they come from less than 20% of the donor base. One nonprofit might consider a $1000 gift to be a major gift.  For another, a large gift might be more like $250,000 or even $1 million.

Just as no two gifts are equal, no two donors or prospective donors are equal either.  That’s why it’s important to develop a strong understanding of a prospect’s interest and ability to give to your organization.  Because after all, each nonprofit organization has unique needs and goals.  This is why when identifying prospects, creating profiles, and generating prospect scores, whatever platform you use should allow you to customize settings to suit your unique fundraising needs and goals.

The “Three Keys” of Fundraising Intelligence

For each major gift prospect, there are three big questions that require research to solve:

  • Propensity – Does the prospect have a history of philanthropy?
  • Affinity – Does the prospect have a connection to your cause?
  • Capacity – Does the prospect have enough wealth to contribute a major gift?

If the answer to all three questions is Yes, you have a great prospect. But if you are missing (or worse, ignoring) one or two of these prospect ratings, you’re missing the bigger picture.

Fundraising intelligence data is publicly available, but very hard to find.  To understand your prospect’s giving history, you may need to review their donations to charities, foundations, and political organizations.  Real estate holdings, SEC filings, and luxury assets are excellent indicators when calculating a prospect’s giving capacity.  To confirm whether or not your prospect has an affinity to your organization, you may need to source public giving records from a related organization’s tax documents, including Form 990s or annual reports.

The process of fundraising intelligence typically flows like this:

1. Identification

This first step involves searching for a single prospect across a fundraising intelligence platform, building a list of prospects, or submitting a prospect screen to identify and segment new prospects in large batches.  Identification is one of the most critical stages of the process, where you must quickly find new prospects and get a snapshot of their ability and willingness to give.

2. Profile Creation

The next step is to create a comprehensive profile for each prospect.  The profile is a living document (often housed within your donor management system or fundraising intelligence platform, or an integration between the two).  It includes contact and biographical information, spouse and family information, research notes, and a list of each data point related to the prospect. These data points influence the prospect score.

3. Score Generation

On iWave’s platform, the prospect score is an average of those three “key” ratings: propensity, affinity, and capacity.  Based on your manual research or results from an automatic screening, each prospect’s score indicates their potential to become your next major gift donor.  

Look for a platform that allows for full customization of the score settings.  Maybe you are only looking for prospects with strong capacity, so you want to weigh that rating higher than the other two.  Or maybe your major gift threshold is $10,000 and up — a high prospect score means the individual sits well above that threshold.  Consider changing the affinity category as well. A prospect who gives only to healthcare causes may not be interested in donating to a museum or pet shelter.  When you customize the prospect score, you can be confident the top-scoring individuals are the right people to contribute to your cause.

4. Recommendation

Once you have created a profile and score for an individual, it’s time to make your recommendations.  Based on the data and your own experience, do you believe this is the right prospect for fundraising outreach?  Is it the right time to set up a meeting? A fundraising intelligence platform is a powerful tool, but the skills and experience of prospect development professionals ultimately determine which prospects continue through the major gift pipeline.  

Let’s Talk ROI

Investing in a fundraising intelligence platform is not a luxury affordable for only the largest organizations.  Small to medium-sized organizations can also benefit from these solutions, sometimes in dramatic ways. Consider the findings of MarketSmart’s 2017 Major Gift Benchmark Study.  The study determined that when organizations leverage prospect research and screening tools to develop fundraising intelligence, they are much more likely to meet and exceed their fundraising goals than organizations who fundraise “the old fashioned way.”  In fact, over 80% of surveyed organizations who use fundraising intelligence met or exceeded their fundraising goals in 2017.

Intelligent Fundraising

Researching for wealth indicators alone won’t give you the full picture on a major gift prospect.  Neither will screening only external records, or mining your own database in a bubble. When identifying new prospects, it’s important to keep your fundraising needs and goals in mind and work with tools that fulfill those needs.  

A holistic process is necessary to find the right major gift prospects.  If you know your prospect’s giving history, you know their propensity and affinity.  Combine that insight with wealth and biographic records found independently or with your fundraising intelligence platform, and you could be on your way to major gift success.  

We call that intelligent fundraising.

About iWave

iWave is the top rated fundraising intelligence platform on the market because it enables advancement departments to fundraise with confidence.  Our solutions help you determine who to ask, how much to ask for, and when to ask by scoring, screening, and providing intel on your donor’s capacity and inclination to give.

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