Helping Your High-dollar Donors to Stand Out
It’s not as simple as just knowing how much money they make. You have to look at the numbers more closely.
September 2006 By Natalie Bush and David Lawson
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The wonders of online marketing give nonprofits the ability to reach out to millions of potential donors. But organizations seeking major and planned gifts often struggle with prioritizing the large amounts of data that result. It’s no great surprise that, after a while, all that data starts to run together and all those donors start to look alike.
The solution is to effectively prioritize the donors most likely to make a major gift — and reach them with the right message, through the right channel, at the right time.
Many of the traditional measures used in nonprofit targeting efforts — gross household income, tangible assets (home and car value), spending habits, and traditional recency-frequency-monetary segmentation based on past contributions — have proven to be unreliable indicators of a person’s true capacity to contribute a major gift to a cause.
To effectively identify and target potential major donors, nonprofit organizations must focus on prospects who meet these three criteria:
1. Focus on assets and discretionary income — not gross household income: It all starts with an understanding of the potential donor’s true ability to give. Unless a prospect has the capacity to make the gift, no amount of research and cultivation will be fruitful. Typical gross household income measures tend to be unreliable and don’t effectively discriminate consumers. Understanding what discretionary dollars remain after essentials such as food, clothing and shelter provides better insight into how a donor might give. Nonprofits vie for the discretionary funds.
2. Use screening that identifies donor access to money, regardless of income: Use screening tools that segment, prioritize and target current and prospective donors based on their true ability to donate significant funds. Organizations should be able to easily find, profile and rank the wealth in their database using prospect-screening tools.
Specifically, the information should pinpoint wealth based in part on liquid asset factors, not just income. To understand why this is important, consider two people with the same income. If one’s dominant asset is his home, then he isn’t as likely to bestow a major or planned gift as the person whose dominant assets are liquid. The latter is capable of making a major gift without having to sell a portion of his dominant asset. The key is to focus exclusively on households with not only high income, but with high
The solution is to effectively prioritize the donors most likely to make a major gift — and reach them with the right message, through the right channel, at the right time.
Many of the traditional measures used in nonprofit targeting efforts — gross household income, tangible assets (home and car value), spending habits, and traditional recency-frequency-monetary segmentation based on past contributions — have proven to be unreliable indicators of a person’s true capacity to contribute a major gift to a cause.
To effectively identify and target potential major donors, nonprofit organizations must focus on prospects who meet these three criteria:
- Financial ability to make a major gift.
- High degree of attachment to your organization.
- High degree of affinity for your organization or mission.
1. Focus on assets and discretionary income — not gross household income: It all starts with an understanding of the potential donor’s true ability to give. Unless a prospect has the capacity to make the gift, no amount of research and cultivation will be fruitful. Typical gross household income measures tend to be unreliable and don’t effectively discriminate consumers. Understanding what discretionary dollars remain after essentials such as food, clothing and shelter provides better insight into how a donor might give. Nonprofits vie for the discretionary funds.
2. Use screening that identifies donor access to money, regardless of income: Use screening tools that segment, prioritize and target current and prospective donors based on their true ability to donate significant funds. Organizations should be able to easily find, profile and rank the wealth in their database using prospect-screening tools.
Specifically, the information should pinpoint wealth based in part on liquid asset factors, not just income. To understand why this is important, consider two people with the same income. If one’s dominant asset is his home, then he isn’t as likely to bestow a major or planned gift as the person whose dominant assets are liquid. The latter is capable of making a major gift without having to sell a portion of his dominant asset. The key is to focus exclusively on households with not only high income, but with high
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