Major gifts and major gift donors are defined in various ways. Suffice to say, they are the backbone of any major campaign and of virtually all giving for every nonprofit relying mostly on fundraising funds to sustain their budget and mission. This is especially true when you consider that 12% of donors provide 88% of all dollars given.
Therefore, identifying potential major gift donors from within your constituent database is essential for proper funding and even more vital for any type of growth.
But how do you identify them?
Net Promoter Score Revolutionized Customer Satisfaction Ratings
Professional marketers in the commercial sector rely on a simple metric to identify and track their most loyal customers: Net Promoter Score - or NPS, for short.
The Net Promoter System℠ is based on the fundamental perspective that every company's customers can be divided into three categories. "Promoters" are loyal enthusiasts who keep buying from a company and urge their friends to do the same. "Passives" are satisfied but unenthusiastic customers who can be easily wooed by the competition. And "detractors" are unhappy customers trapped in a bad relationship. Customers can be categorized based on their answer to the ultimate question.
The essence of NPS is one simple survey question being asked:
"How likely is it that you would recommend us to a friend?"
This rather simple question is answered on a scale of zero to ten. The chart below shows how the score is calculated:
To calculate NPS, take the percentage of customers who are promoters and subtract the percentage who are detractors.
What would happen if nonprofits adopted this metric?
Net Promoter Score And Donor Engagement Go Hand In Hand
Donor engagement is the single biggest factor in identifying future major gift donors; particularly the most difficult to find ones who have never made a major gift to your organization. Even if a constituent is wealthy and has given elsewhere, securing a major gift is virtually impossible without engagement!
Anyone who has ever gathered a committee together for any type of fundraising campaign has heard name after name of wealthy individuals being tossed out because of a lack of connection to your organization in their background. Many of those committee-generated prospects have never even heard of your organization.
So why not use engagement as a basis for identifying major gift prospects? Engagement measuring is the equivalent of Net Promoter Scoring for nonprofits! Here are three ways to get started:
1) Find The (Engagement) Net Promoter Score Among Your Constituents
First, identify your net promoters via a simple email survey. Asking “How likely is it that you would recommend our organization to a friend?” is all that is needed.
The answers to those who complete the survey will quickly provide a picture of engagement for each participant. It will also provide an important metric for your organization as a whole in how happy your constituent base is.
2) Utilize Soft Credits
The widely used method in fundraising record-keeping for measuring and noting who is responsible for attracting monies other than directly from themselves is our second key factor in identifying major gift prospects.
This should certainly make sense since these constituents are the “rainmakers,” who bring is large amounts of additional dollars through their efforts.
Some examples of soft credits are:
- Company matching gifts
- Peer-to-peer fundraising
- Special event table captains
Any action, which directly brings in fundraising dollars, via their actions results in both a soft credit and a clear indication of engagement, and should be noted as such.
3) Note Family Foundations & Donor Advised Giving Funds for Existing Donors
The creation of and use of both family foundations and donor advised giving funds has risen exponentially in the last few decades. You can see data on donor advised fund from the National Philanthropic Trust here.
The sheer size of assets place in these funds by 2013 has grown to nearly 54 billion dollars with over 21% of the funds being donated annually!
When donor advised funds are combined with family foundations the impact on major gift giving for the future is enormous.
Identifying constituents with one of both of these assets for giving who have ALREADY donated to your organization is the third sure-fire method to identify potential major gift donors!
Whenever any size gift arrives from either a family foundation or a donor advised fund, it should be connected with the proper constituent and properly labeled as a major gift prospect in your database.
Every nonprofit leader who depends upon charitable donations now has three more methods at their disposal to help in the critical and oh so tricky process of identifying potential major gift donors.
First, finding the Net Promoter Score for as many constituents as possible enables you to know their level of satisfaction and alignment with your organization.
Second, spotting and marking every soft credit transaction as outlined above shows who is already working beyond their current personal means to support your cause.
Third, identifying affiliated pools of larger assets already intended for charitable giving can provide the direct link to a future major gift.
Each of the methods can be used alone, but together they provide overwhelming evidence of where major gifts might be found. Please let others know via the comment section if any or all of the three methods have helped your major gift fundraising efforts.
The preceding is a guest post by Jay Love, Co-Founder and CEO of Bloomerang, which helps nonprofit organizations to reach, engage, and retain the advocates they depend on to achieve their vision for a better world. A veteran of the nonprofit technology sector, Jay is a founding member of the AFP Business Member Council and chair of the AFP Ethics Committee.