What Is Donor Identification? Major Gift Fundraising Fundamentals Series
As you begin scouring your donor and supporter databases for your next batch of major donors, where do you begin? How can you tell from the swath of names, addresses, and accompanying data who might be a good candidate for a potential major donor you could reach out to? This is the process of donor identification, and it’s a critical component of any major gifts fundraising strategy.
In this article, we’ll walk you through the basics of donor identification so you and any other new gift officers on your team will make good use of your time and only reach out to supporters who could become actual major donors.
What Is Donor Identification?
In major gifts fundraising, identification is the process of finding potential major donors from your databases, including supporters, previous donors, and other individuals with some connection to your nonprofit.
You’re looking for people who at least have the potential to become major donors, either now or in the future.
In marketing terminology, these would be called leads or prospects. When you identify major donor prospects, you’re looking for one or more of a particular set of characteristics or attributes.
Who Could Be a Major Donor?
At this point in the process, you’ll be casting a fairly wide net. This isn’t about net worth only. A wealthy person in your database who got put there by mistake is not a good major donor prospect. But in the identification stage, that’s your goal – to weed out the people who have little chance of ever making a major gift, and to enable your best prospects to emerge from the masses.
Major donors can come from just about anywhere:
When finding major donors, you cannot limit yourself only to things like giving history.
For example, how could a typical nonprofit employee become a major donor? Do your employees make enough money to give big gifts? Part of this depends on how your organization chooses to define ‘major gift’ and ‘major donor.’ For some, it might be $1000. In that case, yes, a dedicated employee could give a major gift.
But presuming your threshold for major gifts is higher than that, what if an employee were to receive a big inheritance? Suddenly, they would find themselves a major donor prospect.
That’s why having a strong, emotional reason for committing to your cause is a key factor in identifying potential major donors. Money comes and goes. But dedication, passion, and commitment endure.
Not Every Major Donor Is Ready to Be One Now
As mentioned, you can’t limit yourself only to looking for supporters in your databases with high net worth. That’s one factor, but it’s far from the only one.
For example, consider a fresh college graduate. Right after finishing school, this is not a very likely major donor prospect. They probably have more debt than net worth. But suppose they use their degree and land a job that pays $150,000 per year. Maybe they get promoted. Maybe they ascend at their company or at another one. Ten years later, they’ve paid their debts and have $500,000 in the bank.
Now, that person is a major donor prospect.
Or, they would be, if the college hadn’t written them off and neglected to stay in touch the last ten years.
A big part of the identification stage of major gifts fundraising is staying in touch with people even if they aren’t yet ready to give – but exhibit other indicators favorable to making major gifts in the future.
Read that again. Don’t miss it.
Wealth builds over time. Most major donors are not in their 20s. But for many nonprofits, a lot of your current donors, supporters, and other people in your database may be young. Keeping those people engaged, excited, and feeling positive about your organization enables them to become major donors later, as their wealth accumulates.
How to Identify Potential Major Donors
There are a variety of traditional methods to identifying major donors. Unfortunately, many of them don’t work, for reasons already given. They overlook things like commitment to your cause and overly rely on things like net worth data, which is often outdated and unreliable.
The longer you stick around as a gift officer, the more you’ll hear other gift officers complain about having caseloads filled with bad prospects, people who don’t like being called, people who don’t have the money to make big gifts even though the spreadsheet says they do, and things of this sort.
This happens because they’re using one or more of six ineffective but often quite popular and alluring methodologies of building caseloads. When you hear the sales pitches for these, they sound great. In reality, they usually leave you wanting something better. Learn more about why traditional identification methods like wealth screeners and RFM don’t work as well as advertised.
So what works better? Here’s the answer:
1. Use Permission-Based Communications
The most effective way to identify major donor prospects is to let them self-identify.
If they raise their hands when asked particular and strategic questions, or when offered particular and strategic opportunities, you know this person has the potential to become a major donor.
Yes, wealth capacity is one aspect of this. Having powerful and emotional reasons for wanting to give is another aspect. Another factor is timing – is the time right in their lives to make a big gift? They also need to be engaged with your organization in a meaningful way. Total strangers and brand-new donors don’t suddenly give major gifts. These four attributes must all be in place for a person to become a major donor.
But all of those things are subject to this – have they given you permission to make outreach to them?
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This is where donor identification begins:
Extract a section of your database. Make offers like the ones we’ll talk about in the next section. Some people in your database will respond to those offers. Those people have now identified themselves as being open to hearing more from you. They are interested in engaging with your organization at some level.
At this point, that level might be very distant. “Yes, you can send me emails now and then. But you better not call me or I’ll block your number, change my name, lie about my age, and go off-grid.†And that’s okay – if all they want is to get emails from you, then start sending emails.
The point is – they have given you permission to be part of their lives, even at just the email level. And now that your foot is in the door, you can begin the qualification process, which is what comes after identification.
Now, you can start connecting with them on a deeper level. You can start exploring and unearthing what matters to them. Look to engage them on topics such as:
These are some of the powerful motivators and factors that influence when, how much, and to whom people give major gifts.
But by raising their hand and taking you up on an initial offer, they have expressed interest and given you permission to reach out. That’s where identification begins.
Now, if you pair up this approach with data from traditional methods like a wealth screener, that can be an effective combination. Because now, you have at least some confidence in this person’s wealth capacity, in addition to the equally important permission to communicate with them.
With no permission to communicate, the relationship will always be at arm’s length. With permission, they will look forward to hearing from you.
2. Begin Communicating – Make Offers to Engage
Once permission to communicate has been granted, you can begin offering various ways to engage and get involved.
The goal here is twofold – deliver value that makes them feel heard, respected, important, and appreciated, and gain a deeper understanding of who they are as a potential donor. The list of attributes from earlier is where you’re taking this.
What are their values? Who influenced them to be generous? How did they learn about your organization? Why does it matter to them?
You can acquire a lot of this information simply by asking for it. Using a series of surveys given out over time, supporters will share these insights with you.
Surveys are just one type of offer you can use to engage these potential major donors. Here are a few others:
You offer things like these to identify potential major donors. The ones who respond to these sorts of offers, and do so consistently over time, are much greater prospects than others who might take you up on one or two but mostly remain silent and disengaged.
3. Deepen the Conversation around Giving
To clarify, you’re not asking anyone to give yet. But by asking strategic questions using surveys and ongoing engagement, you can find out information you want to know.
This is where the identification process starts to bridge into the qualification process.
For example, raise the issue of assets versus cash, and if they have ever considered giving gifts of assets. Do they have non-cash assets as part of their net worth, such as stock options or retirement accounts?
This is a good place to start. You’re not asking them to make a gift. You’re just finding out if they have these sorts of assets.
You can also ask questions where they get to rank your organization among the others they may be supporting. This gives you an idea of how highly and passionately this person feels about your cause compared to others.
4. Continue the Process into Qualification
From here, you keep doing this. Keep engaging. Keep offering. Keep learning. Keep asking.
Get to know this supporter, and begin the process of qualifying them as an actual major donor.
For that, read the next article in our Major Gifts Fundraising Fundamentals series on qualification (coming soon).
Remember, not every major donor is ready to actually be a major donor yet. That college graduate who became wealthy ten years after leaving your college? Have you stayed in touch with them all these years in ways they appreciate and feel good about? Do they feel like your relationship with them is valuable and rewarding? Then that person is a potential major donor.
But if you let them wither in obscurity because they were deep in debt, you lost them. Reaching out ten years later will be received very differently.
Donor identification is what initiates the relationship. Qualification is what advances it.