According to the most recent statistics in GIVING USA, the ‘Flow of Charitable Gifts’ from Americans in 2002 was greater than $240 Billion. Seventy five percent was from small and large donations and from special events. Eight percent came from people who had passed away and left wills/bequests and other forms of planned giving.
In the total pie of private sector contributions in America about 83 percent of all contributions are made by individuals in one form or another. People look to corporations and foundations for the ‘big gives,’ but in reality, private foundations only make up 11 percent of the total funding pie and corporations make up only a fraction more than 5 percent. For most organizations raising money from individuals should be a significant and growing part of their fundraising program. Although, the costs of raising money from individual donors are larger than receiving foundation and government grants of $5,000, $25,000 or more there are a number of advantages to raising dollars from individuals. These include:
• Generally, individuals are more reliable and controllable givers than foundations and corporations;
• There is a shorter turn-around time to receive the money;
• They are the basis of planning giving, endowments and larger gifts;
• You can ‘trade-up’ small donors to become large investors;
• Donors will introduce you to their friends and in that respect will become fundraisers;
• Donors also work for companies, government agencies, et cetera and provide a strong link to that type of support.
Before we go into the TIPS for the week, let me briefly list the reasons donors will give to your organization:
• First and foremost people give because someone they know asked them to give. This is key.
• Personal interest or involvement – If their father has cancer, they will tend to give to cancer causes. If they have a developmentally disabled nephew, they will give to that type of cause.
• Passion – Do they have a passion for the environment? Dogs? Women’s issues?
• Geographic location – I am interested in protecting my property values, cleaning up my neighborhood, seeing that there is a park in our community, or a new fire station.
• Social interaction – They want to meet like-minded people.
There are other reasons, of course, but these are some of the top dogs. During the next three weeks of Rich TIPS we will help you identify, recruit, raise donations, trade-up donors, and get donors to become fundraisers.
Lets begin this first of the three part series on how to identify potential donors:
• Start Close to Home – If you don’t have an existing donor program or you want to expand one, start to collect names from your friends and relatives and from people in your community. The basis of an individual donor program begins with organizing a database. As Kim Klein, a grassroots fundraising guru says, “You already know all the people you need to know.”
• Target 10 Key People – Sit down with your board members, and prospect the names of 10 people who could make a $1,000+ donation by December 2004. Cultivate them (by asking them to go out to lunch, inviting them to see your programs in action, asking for their opinions, et cetera). Have at least two to three meetings with them (cultivation sessions) before you ask them to become major donors.
• Millionaire Next Door – There was a famous book a few years ago called The Millionaire Next Door . The millionaire next door is the mild mannered, low-key person next door who drives a mid-range car, lives in a modest house, periodically takes exotic vacations and basically appears to be anything BUT a millionaire. These people are part of the ‘transfer of wealth’ generation that you can cultivate. They have accumulated wealth over years of working and have saved 20 percent of their income yearly. Look for them in your community, and start to get them involved.
• Special Events are Important – Develop a follow-up strategy for your special events. Sometimes the purpose of the event is not to make money (although that is great goal), but to identify new suspects to develop into prospects, so they can become donors.
• Speaking At Church and Faith-Based Institutions – The best donors in America (at almost three times the average) are those that are religious and attend houses of worship once per week or more. When you have an opportunity (or create one) to speak to a women’s group, men’s organization, mission group, or perhaps give a talk to the congregation during “domestic violence week,” mother’s day, et cetera, be sure to use this opportunity to interest those people in your organization. Pass around a sign-up sheet and make note of individuals who come up to speak with you afterwards – follow-up with them.
• Database is Key – Always build your database of names and prospects and make sure you have the discipline to record important data on people. You could spend $50,000 on Raisers Edge donor software, but it won’t do you any good unless you know how to use it and enter the important information: background details about the person such as number of children and their ages, birthdays, anniversaries, occupations, where they go to church/synagogue, et cetera. This information is important to personalize your appeals and to send them cards on giving life cycle events. Remember, people give to other people, so try to develop fairly personal and intimate relationships with your donors.
• Use Existing Donors – One good way to identify new donors is to go to your existing friends and donors and ask them to provide the names of five of their friends to be added to the database. Then see if they will sign a direct mail appeal, encouraging their friends to become donors.
• Op-Ed Pieces – A number of years ago, when I was organizing a homeless campaign in Denver, I wrote an op-ed piece for the Denver Post and we received over $15,000 in donations and over 200 new donors!
• Always Keep Your Radar Antenna Up – Whenever you are at the movies, playing tennis, out to lunch, and you meet people who are interested in learning more about your group, collect business cards and add them to the database.
• What to Look for in a Prospect – When identifying prospects to become donors, look for the following indicators:
• Ability to make the size gift you want – this is very subjective
• Belief and passion in your cause
- Ability to have someone make the introduction