Fundraising Q&A: Creating an individual donor base

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How do we build an individual donor base for our organization?

I’m glad that you want to strengthen your approach to individuals because statistically, they are the most engaged and generous source of donors. According to Giving USA 2009 (with apologies for not finding equivalent Canadian data) the breakdown of charitable contributions was: corporations 5%; bequests 7% (which are from individuals); foundations 13%; and individuals 75%. These numbers fluctuate somewhat year to year and I have heard similar figures cited here.

Statistics Canada’s 2007 Caring Canadians, Involved Canadians report states the top 25% of donors provided 82% of total donations. Generally, their characteristics included being older, with higher incomes and a formal education. Those who are employed, widowed, or attend religious services weekly also tended to fall into this category.

The conclusion you can take from these statistics is that the time you spend cultivating your individual donors, particularly the 20% who give 80% of the money, will pay significant dividends! But before I start discussing strategies for major gift prospecting, your question suggests that you don’t have many donors yet so let’s start at the beginning.

Newcomers to fundraising often run special events but then fail to gather names and addresses of attendees. Don’t miss the opportunity to build your database of contacts. Activities that help educate the public of your mission attract like-minded people. Those who buy lottery tickets rarely translate into annual donors, so be strategic when planning events.

Donations from individuals may come from four different "pockets" - their discretional or disposable income (current and future), savings (easily liquidated), assets (bonds, bank accounts, stocks, real estate, etc.) and estates (usually non-liquid assets or those set aside for retirement and/or heirs). The goal of any good fundraiser is to build a long-term relationship with your donors so that those most committed to the organization’s success give from all four.

Unlike other funding bodies, individuals have the freedom to make unrestricted gifts to your cause without a lengthy decision-making process. As charities struggle to cover core costs, gifts that aren’t restricted to a specific project or proposal are a welcome addition. A major gift from a benefactor would probably be allocated to the project you pitched but general contributions can usually help underwrite the administrative costs of your program delivery.

Where do we begin? Finding your individual donors

To build an individual donor base you need to start with your existing "family." This includes your board of directors, volunteers, staff, donors, and those you serve (with a sensitive approach to each audience acknowledging their role). If you have been following this monthly column or heard me speak at conferences you’ll already know the Linkage-Ability-Interest principle as a proven prospect research strategy. Here’s another link that takes that practice a step further, and even if their approach may not be immediately applicable you can see how important it is to identify major gift potential.

Review your charity’s records and determine who demonstrates the strongest commitment through financial and/or volunteer support. This may be easier said than done, particularly if your organization is new to fundraising. If you don’t have an existing database that tracks investments in your organization then you have to start building one.

Fundraising software can be a luxury if you are struggling to make ends meet. Just over 20 years ago, the first organization I fundraised for was tracking everything manually...in a sophisticated recipe box! So even if you can’t afford a database right now, start identifying the people who love your work and document their history with your organization. And remember, compiling records contains confidential information so ensure files are secured to respect privacy.

I want to know my client’s best supporters and lapsed donors. If the charity has a fundraising database, it is as simple as running a report that provides the complete giving history (year by year) of each donor who has given more than $100 in a single gift. Another popular request is a LYBUNT or SYBUNT report...meaning "last year but unfortunately not this" or "some year etc." This information helps me identify where I can find the greatest potential for support.

For those without a database, I once leafed through musty old receipt copies that were stored away in a damp basement collecting dust (without considering the health ramifications). Luckily, most current duplicates are still filed where I can easily access them and identify key prospects. Going back more than three years in today’s rapidly changing world is rarely useful unless you are tracking a major donor.

I want answers to the following: how much do people give to this charity; what’s the average gift; was this an unsolicited donation or a response to a specific request; if so, is the letter on file and how compelling was it; what was the project or case for support; was there a donor reply form that accompanied the request; did it identify specific amounts; if so, did most of the gifts come in at the bottom level and what was that figure or were gifts wide ranging; what are the largest gifts (or receipts if I’m doing this manually) i.e. how would I define a major gift to this organization; if I look at previous year’s receipts, will I find those larger donors have given consistently at that level; do we know why the more generous donors give; are there any personal connections with your charity; was it the canvasser, the case or the cause that was compelling (proof of Linkage-Ability-Interest and my love for alliterations).

Some of the information I can collect just from reviewing the receipts or reports but speaking to a staff member or volunteer to fill in the blanks is really useful. Documenting "organizational memory" (again, in secured files) is helpful to fundraisers and consultants because it enables us analyze past experience and build our strategies accordingly.

Start with your organization’s family

Historical records help identify who exactly the charity’s family is, and, therefore, who’s most likely to support a request. Just like our personal search for ancestry, the further back we go, the harder it is to determine relationships. If you picture the concentric ripples that emanate from tossing a pebble into the water, the centre represents those closest to your organization today. These are your organization’s champions, family, and closest friends so your research can come straight from the source by engaging them in dialogue and listening intently. Linkage and Interest are already established and Ability is easier to determine. This is particularly true of board members and volunteers who already donate countless hours.

Some argue that if those people give their time, why would we ask them for money too? If volunteers are five times more likely to give than strangers, we need to start here. We should ask board members to demonstrate their leadership to the public because if they aren’t willing to invest, why should others? Board commitment builds credibility for your charity. Having said that, remember to acknowledge their volunteer contributions.

ASK for a donation...at least once a year!

Minimally, everyone in the organization’s circle should be asked for an annual donation. Don’t assume your board or volunteers will remember to write a cheque, even if that expectation was clearly communicated in their job descriptions during the recruitment process. You need to follow up with each target group. The request should come from an existing donor that is well-respected...often the board chair, but not necessarily. Whether "the ask" is done personally or in letter form depends on the maturity of your fundraising program, time constraints, the canvasser’s comfort level, and the size of the gift you’re expecting. We like to match major gift prospects with a peer who will make the request in person, but if that’s not possible a letter is certainly preferable to nothing.

Earlier I advised a sensitive approach to each audience. It’s important, particularly as a charity is ramping up its fundraising initiatives, to communicate with your family. Share your charity’s strategic plan and help them understand the reasons why a broad base of support is needed and how the "family response rate" builds credibility with less connected audiences.

Start your letter (or meeting) by acknowledging the important role each of these individuals play in your organization and the significant achievements that are possible thanks to their support. Focus on the organization’s accomplishments (deeds versus needs) and how future plans build on existing strengths. If you’re uncomfortable with writing to clients there is an excellent article at here that will help alleviate your fears.

Building your individual donor base is a big topic that deserves more attention. This article focused on the initial steps that strengthen the organization’s credibility from within. Core commitment from those who know you best will help you broaden your network and in future months we will explore those strategies further. In the meantime, ensure you have strong communication and stewardship strategies in place to nurture those relationships.

Cynthia Armour is a freelance specialist in fundraising and governance. A Certified FundRaising Executive (CFRE) since 1995, she volunteers as a subject matter expert with CFRE International. She works with boards and senior staff to ensure that strong leadership will enhance organizational capacity to govern and fundraise effectively. Contact Cynthia directly at 705-799-0636, e-mail answers@elderstone.ca, or visit www.elderstone.ca for more information about her services.

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