How Data Analysis Can Help Nonprofits Reach Major Donors
Major giving has always been incredibly important for the health of nonprofit organizations. According to the 80/20 rule in major donor fundraising, 80% of a nonprofit’s total revenue comes from the top 20% of its donors—and for some nonprofits, this might even be closer to a 90/10 ratio.
In times of economic uncertainty, these key players become even more important. While donors who cannot make large donations often have to limit or withdraw their support during these times, major donors can help fill these new gaps in nonprofit funding. To ensure your organization has this essential revenue stream secured in the event of an economic downturn, make sure to center major donor fundraising strategies in your yearly development plan.
You can upgrade your nonprofit’s current strategy to reach and identify more qualified prospective major donors by using data. For example, you might perform a wealth screening on a prospect to analyze information like household income and discretionary spending. This information can give your organization a more complete picture of the prospect’s giving capabilities and their willingness to support your cause.
By collecting data about donors like their name, age, address, and employer, you’ll gain valuable insights into who donors are and what drives them to make contributions to your organization. Then, you can use this information to shape how you connect with them, what you discuss with the donor, and even the gift amount you request.
To gain access to this data, you may need to purchase a data append. Let’s get started!
NPOInfo defines data appending as “adding new relevant information from external sources to an existing database.” In the case of a nonprofit organization, you’d be adding new, high-quality donor data to your existing file.
The process of appending data as a nonprofit looks something like this:
- Convert all of your data to the same format to ensure it all flows together seamlessly. A CSV file is recommended.
- Compile this data into a single file and upload it to your data appending service.
- Next, the appending service will match the data in your file with the data in its business database. The objective is to flag and correct inaccurate data and fill in missing information.
- Once the data is corrected and/or enhanced, the appending service’s verification team validates the data. They might test email addresses in the file to ensure they are functional, for example.
- Finally, the appending service sends your nonprofit the completed file with appended data, available to download in any format.
Working with a data-appending service is the best way to enhance your donor data. Not only will your provider have experience and expertise appending data, but it will also save your staff time and effort filling in missing data themselves.
Once your nonprofit’s enhanced file is ready, you can start analyzing it to find prospective major donors. Checking the donors who are already in your file is a great place to start, particularly if they have a history of dedicated support for your cause.
Kick off your efforts by performing wealth screenings to identify donors with the giving capacity and affinity for a major gift. This process will help rule out any individuals who either are not able to make a major donation to your nonprofit or would likely not be willing to. Because this happens early in your prospect research, your development team can save time and reallocate it to the ideal prospects.
Here are some wealth indicators to flag and analyze during your wealth screening:
- Net worth: This represents the total wealth of an individual or household. Net worth takes into account any liabilities the donor has as well as their non-liquid assets (e.g., real estate or art), so it may not always be the most accurate representation of spending power.
- Real estate ownership and stock holdings: Identify any major investments your prospects have to get a fuller picture of their wealth.
- Business affiliations: Major donors and prospects may be affiliated with businesses, often holding high-level positions. Check for C-suite or executive-level positions that might indicate significant influence.
- Contributions to political candidates: These contributions reveal both a donor’s values and their giving capacity.
To use this data to improve prospect identification, your nonprofit will need to compare these findings against your prospect’s past charitable giving and involvement with other mission-driven organizations. For example, do they donate to other local food pantries and soup kitchens similar to yours? If so, you can deduce that the prospect has a special connection to battling food insecurity, indicating a positive affinity to giving to your cause.
During the prospecting phase, communication is key. Seamless communication allows you to build and maintain a deep, trusting relationship with your major donors.
Keep these factors in mind when planning your communication strategy:
- Which platforms do your donors use most? Because your relationship with these donors is so important and individualized, ask them how they want to be reached to ensure your communication strategy is aligned with their preferences.
- When are donors available? Make sure to schedule phone calls when donors have time to talk, and send emails when you think they are likely to check their inboxes.
- What should be included in your messages? The messages you send should be appropriate for both the communication channel and the prospect’s current relationship with your nonprofit. For example, you might send a summary of your last annual report over email rather than reciting it over the phone.
Tailor other areas of your fundraising strategy to donors’ preferences as well, including their giving method. Pay attention to past contributions so that when it comes time to make a fundraising ask, you’ll know whether to request fiat currency, cryptocurrency, or stock donations.
When you manage donor data properly and gain valuable insights about your donors, you’ll learn about their preferences, how they like to communicate, and their favorite ways to engage with philanthropic organizations. To offer your prospects a donor experience that is personalized to their needs and preferences, find unique ways for them to engage with your organization.
For example, if you have a prospect who you know is outgoing and loves connecting with beneficiaries, you might send her invitations to all of your volunteering opportunities. On the other hand, your more introverted prospect might appreciate an invitation to attend a meeting with your board members to devise ways to improve your program.
By leveraging data as a key piece of your prospecting process, your organization can find the most promising prospective major donors. And with data, this process is more efficient and effective. Data analysis helps you eliminate prospects who may not be a good fit earlier in the process. It also provides important insights into promising prospects’ giving behaviors and values so you can build a deeper relationship with them on a shorter timeline.