Your nonprofit organization has a great initiative, but it needs funding to make it happen? Wondering how to put together a list of potential donors? There are many important steps in the process of earning donations from your donors, but before you can begin asking for — and receiving — those donations, you must first identify who your donors might be.
How do you recognize a potential donor?
Usually, a potential donor is interested in your organization’s work, has the ability to provide the funding you need, and ideally has a direct connection to your organization. To find out how to recognize the potential donors who can help skyrocket your nonprofit’s success, check out these top indicators.
Look at the lists of your past donors. Donors who have had a positive funding experience in the past are likely to give again. An “internal relationship” can also prove to be valuable. Talk to past and current staff, board and volunteer team. Approach a broad network of members; you might be surprised to find an ally among them who will play an essential role in your “proposal”.
Don’t forget to take note of all your exchanges! Carefully and correctly recording all information related to potential donors is very important. It’s one of the biggest lesson we’ve learned in our experience with donors: the importance of even the most mundane information. Encourage your staff to record and follow up on exchanges. Losing the thread could lead to the loss of funding opportunities.
Check out online resources, like social media groups, to expand your list. First, orient your research according to geographic criteria and financial interests. When evaluating opportunities, ask yourself the following questions to find new connections between the donor’s interests and your fundraising needs.
Does the donor prefer to fund projects at the national or local level? If the latter, has he shown interest in the communities you work with? If you are looking for donor businesses, which ones are active in your neighborhood?
Based on the organization’s goal or mission statement, what population or issue do your donors want to support, and is it possible to relate these motivations to your work? Who have your donors funded in the past? Have they funded organizations similar to yours or with which you have a link or a partnership? If it is an institution, such as a large foundation or business, does it offer different programs or different funding channels? This information is available online – and easier to find than you believe. Social media profiles, personal pages notes from other organizations like tie ups or events are some places to begin looking.
Does the donor want to provide the type of funding you need? Will they finance the ongoing costs of the program or do they prefer to finance projects of limited duration?
These questions will help you build your list of potential donors. Also, your answers will allow you to compare the different criteria in order to choose who to approach, as well as to prepare a proposal for a targeted grant or appeal. Record information and its sources in print or electronic format. While a donor management software could be useful, spreadsheets or a system you design can work just fine to begin with.
When making your list of potential donors, determine the capacity of each. What is the amount of their donations? What are their assets? If the information is available, take note of the number of organizations they support. Knowing that a donor gives to a hundred grants rather than five will help you gauge your chances of securing funding.
Remember that these questions are also important for large donor institutions, such as corporations and major foundations. Large donors receive thousands of requests every year. To manage them effectively, they usually develop policies defining, for example, the maximum amount of donations.
Before deciding who you will present a proposal to, rigorously reassess each potential donor on your list based on the criteria of relationships, capacity, and interests.
You can, along with your teams, set up meetings to go over the long list of potential donors and divide it into Lists A, B, and C based on each person’s suitability and desirability for a given fundraising project. For example, your List A can include donors with whom there is a personal relationship and where interest and capacity are demonstrated. For their part, the donors registered in List C do not meet current funding needs, but could be appropriate for other projects.
In large fundraising campaigns, you should look for at least three qualified donors for every donation the team wishes to receive. Establish your own ratio to target your searches. Which means that if you want to secure three donations of $100, set a goal of finding nine donors with the capacity to give of that value. You should adapt the donor-donation ratio according to the size of the donation. That is, the size of the donation should be proportional to the number of donors.
The Fundraising Research Cycle
The job is obviously not finished when you have qualified donors. A good search for potential donors facilitates all stages of the giving pyramid. From creating and evaluating a list of potential donors to gathering information for subsequent phases of the cycle.
There’s no one-size-fits-all way of going about your potential donor fundraising efforts. Instead, vary your approach and practice a collection of strategies to make the most of your high-quality prospects and donors.
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