The Covid-19 emergency is ending, but many nonprofit leaders now face a new conundrum: how to keep their doors open to meet the soaring need for services amid inflation, staff shortages, and the threat of an economic recession.
To make the most of limited time and resources, big-gift officers should focus their efforts on donors who are most likely to give now, experts say. But it’s never easy to pinpoint those with the greatest potential to give, especially in a volatile economy.
To guide you in these efforts, the Chronicle spoke with four seasoned prospect-research professionals who shared smart steps your nonprofit can take to zero in on your best opportunities in 2023 — and strengthen your organization over the long term. Here’s what they say.
Understand your organization’s funding priorities. “It’s not always about how you prioritize the prospects in and of themselves,” says Lindsey Nadeau, vice president for data, insight, and campaigns at Unicef USA. “It’s also about what funding opportunities are really the critical needs, and that informs which prospects we’re prioritizing.”
For example, unrestricted support is a top priority for Unicef, especially in uncertain economic times, Nadeau says. So when assessing potential major donors, the organization looks for signs of a willingness to give this kind of support, like past flexible gifts to Unicef or other groups.
Define your goal. While nonprofits often focus on prospective major supporters, an economic downturn offers an opportunity to expand and strengthen your base of volunteers, who often become your best donors down the road, says Catherine Flaatten, associate vice president of prospect development at BWF, a fundraising consultancy. “This is another investment in your longer-term pipeline to make sure that when the storm passes, as it inevitably will, you’re ready to sort of hit the ground running with this cadre of volunteers that you’ve been cultivating and engaging over the past year or two,” she says.
Start with people close to your organization. Donors and grant makers often prioritize their strongest relationships during a rough economy, so now’s the time to make sure your nonprofit is among those, Flaatten says. Find creative ways to engage “friends” of your group and bring them closer, she adds. Here are a few examples:
- Look in your “stewardship pools” — among supporters who have a current gift commitment with your nonprofit. If any are approaching the end of their pledge, talk with them about their next donation or see if they could make an annual gift in addition to their pledge.
- Search in your database for donors you think know a staff member, volunteer, or trustee and tap into that connection. For example, share a list of names with your board members and see if any could provide an introduction. “It’s helping them think through their network in a way that is really actionable instead of just sort of asking them a very abstract question of like, ‘Who do you know?’” Flaatten says.
- Reach out to your monthly donors. Sustainers have shown they are invested in the long-term success of your organization, she says. They may not be able to make a major gift, but see if they could increase their monthly pledge so they can make a bigger impact over time, she suggests.
Focus on giving history — not only wealth. The donors with the greatest potential to give, aren’t necessarily the wealthiest people in your database, says Jennifer Filla, president of Aspire Research Group. People’s giving history can be a more helpful indicator of potential than their wealth, she says.
Look at behavior such as how recent or frequent their gifts have been, total lifetime giving, increases or decreases in contributions, large starting gifts, or milestones of cumulative giving, she suggests. “All of those are reasons to talk to people regardless of capacity,” Filla says, because you can build toward bequests and other types of support — and ultimately increase their giving.
If your nonprofit has a small database and budget to spend on prospect research, keep it simple, she says. If you haven’t yet talked with all your donors individually, sort them by lifetime giving and “start calling,” she says. “Those people are going to be your number-one ‘I love you’ people. So give them a call. You can’t go wrong with that to start.”
Even if some say they can’t give as much right now, that’s an opportunity to nurture your relationship with them and say you appreciate any gift they can make, Filla says. “Organizations that do a great job of talking to all of their donors are always better placed in times of uncertainty,” she says.
Pay attention to “affinity.” In addition to giving history, measure donors’ affinity, or interest and engagement, with your organization. To help its major-gift officers do this, Unicef built an affinity score in house to rate donors on how actively they engage with the organization in a variety of ways — including direct-mail and online communications, events, volunteering, and giving. The score integrates data from these channels to give fundraisers a “360 view” of supporters, Nadeau says, so they can zero in on those who are more deeply invested in Unicef’s mission and more likely to give. The fundraisers review their portfolios of donors each quarter to prioritize, she says.
When seeking potential donors and grant makers with whom you don’t yet have a relationship, look for those who are already connected to a mission similar to yours, suggests Misa Lobato, director of prospect management and analytics at Rhode Island School of Design. That may mean assessing an individual’s past giving or a foundation’s or giving circle’s stated interests. “There has to be some compelling connection between yourself and a donor,” she says.
Look for donors who respond to urgent needs. Despite the turbulent economy, Unicef continues to see donors give in response to emergencies such as the earthquakes in Turkey and Syria and the Ukraine war, Nadeau says. “These are kinds of time-bound, urgent, compelling efforts that often supersede any economic constraints that our constituents may be feeling in their own personal finances,” she says. “So we prioritize prospects that would be receptive to those urgent needs.”
To identify these individuals, Unicef looks for indicators such as past giving to an emergency, the country or region affected, or emergency-response efforts at a peer nonprofit. The group also looks for donors who have self-identified as having a connection to the region, Nadeau says.
Even if your nonprofit doesn’t respond to emergencies, she says, it could be helpful to identify an urgent need in your community and set a deadline for addressing it. Then prioritize supporters who you think would be receptive. “That can often be compelling enough to overcome financial limitations for donors who are very invested,” she says.
Adjust your expectations for giving. Flaatten recommends revisiting the level of giving that signals a donor could be a promising prospect — an amount she calls a “trigger threshold.”
“In a recession, a $5,000 gift might be as indicative of potential as a $25,000 gift during regular times,” she says. “So we just need to right-size those expectations and not let donors fall off the radar because the context has changed. We need to change with it.”
Take a targeted — and sensitive — approach. Do research to get a sense for how industries in which potential donors work or invest are weathering the economic instability. You might want to prioritize supporters who seem to be faring well and back off or be sensitive in how you approach those who may be harder hit, Flaatten says. Set up online alerts using Google, LexisNexis, or other online tools to stay up-to-date on economic events that might affect your prospects, she suggests.
Also keep in mind that wealthy people may feel less wealthy in a turbulent economy, which can affect their level of comfort with giving, Lobato says. But this tends to be less true among entrepreneurs and others who have a demonstrated tolerance for risk, she adds.
When prioritizing, consider a focus on donors who give income-based donations rather than gifts of assets, which can be more unpredictable because they are often tied to the stock market, Lobato says.
Diversify, diversify, diversify. Over the long term, it’s more sustainable to have a broader, more diverse pool of supporters than to depend on ultrawealthy donors, Lobato says. To start expanding your base, tap into giving circles and your local community, she suggests. For example, look for people who are directly affected by your work and are known to be philanthropic or involved in the community.
And get to know local leaders and organizations that serve people of color, the LGBTQ community, and people with disabilities, Lobato suggests, so you can better understand the needs of those groups and how to connect with them.
You should also think about diversifying your revenue streams and types of gifts, Flaatten says. Here are a few tips:
- If your nonprofit typically focuses on individual donors, consider adding foundations or corporations to the mix. Or if your supporters are mainly in America, you might start to look abroad.
- Look at donors who make noncash, in-kind, and planned gifts because these forms of support are less tied to people’s liquidity.
- Focus on individuals who hold donor-advised funds because the money in DAFs has already been set aside for charitable giving.
Make these efforts a priority now, Flaatten says. Research shows diversification is less successful when done during an economic recession, she adds, but organizations that do it beforehand fare better. “So this is something that we really want to think about right now.”
Acquire tools and resources that can help. It’s worth investing in solutions — such as wealth screenings and modeling tools, which build profiles of potential donors — that make this work easier, Flaatten says, because you’ll become more strategic and effective at fundraising in the long term. Some vendors may be more flexible with payment terms in the current economy, she says.
Flaatten also suggests plugging into Apra, the association for prospect-research professionals, to get insights and advice from your peers. “That will help you kind of stay on the leading edge of what is happening and help you decide when strategic pivots are necessary,” she says.
