It has been said that the price of doing the same old thing is far higher than the price of change.
That is especially true in the realm of fundraising, as too often, we go to the same well again and again when it comes to approaching donors for major gifts or sponsorships. While it is always a good thing to nurture relationships with our most loyal supporters, making a habit of going to this select group again and again is not a viable strategy for sustaining your organization. It is a habit that generally leads to donor fatigue and stagnant fundraising.
If it has been a while since your organization assessed its portfolio of donor prospects – or if it has never developed a portfolio – now may be the time to make a change. If you are new to this terminology, a portfolio is a list of potential donors that an organization will cultivate, solicit, and steward over time. In developing a portfolio of prospects, you can focus your energies, not on repeating the same, but on strengthening existing relationships and building new ones.
A portfolio can be developed based on the various strategies your organization is employing to meet its fundraising goals. For example, you can develop a portfolio of major gifts prospects to raise larger contributions to support programs, sponsor a special event or initiative, or fund capital needs. Portfolios can also be developed to grow support from individuals or corporations. Additionally, you can develop a portfolio that targets specific donor segments such as prospective planned gift donors who will designate a future gift to your organization in their estate plans.
Look within your own house.
Fortunately, we do not need to go too far to find prospects for these kinds of portfolios. Your database of existing donors is generally a great place to start, provided it contains at least a few years of giving history. (If your organization does not have a donor database or, has one but does not routinely use it to its potential, we should talk).
With a well-defined portfolio, your work will be guided by a manageable list of prospective donors to whom you will reach out for more personal cultivation and, ultimately, solicitation. The strategy for developing the portfolio lies in identifying metrics for the key reports to run from your database. You can begin with these reports:
- Top 50 or 100 donors of all time
- Top 50 annual fund donors from the last three fiscal years
- Top 50 annual fund donors with three or more years of consecutive giving
- Top 20 corporate donors of all time; and from the last 3-5 fiscal years
- Top 10-15 foundation contributors from the last 3-5 fiscal years
- Lapsed donors: those who have given at least twice previously, but who have not given in over a year
- Wealth screenings of top 25 donors (not all databases have this capability, but it is a service that can be performed with a third-party wealth-engine provider)
- Volunteers: a group that too often is overlooked as potential financial contributors, either personally or through their employers’ charitable giving program.
These reports should be scheduled regularly, such as quarterly, to carefully assess changes in giving patterns, to identify new prospects, and to keep the portfolio relevant to your objectives.
Once the various groups of prospects are identified, the lists should be assessed and streamlined to ensure that individual donors do not end up on more than one fundraiser’s portfolio. Your lists may also be further refined to a manageable number based on how many development staff or board members are actively raising funds. For example, it may not be feasible to call on your top 100 donors – but perhaps the top 25 donors are a more reasonable benchmark.
Once you have developed your portfolio(s), the important work begins in developing a unique strategy and approach for each of these prospects. Donor cultivation is way more than sending an email or mailing an occasional solicitation letter. Cultivating these relationships takes time and, like real life friendships, requires a personal connection. The cultivation process itself adds to your donor’s positive experience with your organization.
Customize Your Approach
As you work through your portfolio, develop a plan of approach for each prospect. For example, if your goal is to secure a major sponsorship from a corporation, your plan will include identifying the best means for connecting with decision-makers of the organization. Sometimes this requires a board member or other advocate of your organization assisting with introductions or accompanying you on the meeting. Remember, you will want to document your interactions and meeting notes in your donor database, setting reminders for ongoing connections such as future meetings, sharing your next newsletter, or even sending a birthday card.
When connecting with prospects on your portfolio, your interactions should focus more on listening than talking. In doing so, you will gain insight into their interests and motivations as well as information to help attract and cultivate new donors. We will talk more about the importance of adding new prospects to your portfolio in a bit, but here are the kinds of things you should be asking your donors:
- What initially attracted you to our organization?
- What gives you the confidence to continue supporting our work?
- What excites you most about a particular program?
- What kinds of things would you like to learn more about?
- What experiences with us have been most rewarding?
- Are there others who you feel would be interested in being involved or who we could help?
Responses to these questions will provide the information you need to not only improve your donor’s experience and strengthen your relationship, but to ensure your request for support aligns with their priorities and giving plans. Remember, cultivating a donor relationship is not about your organization’s needs, but rather, your donor’s needs, timing, and priorities.
Managing your portfolio with care and consistency not only offers structure and clarity for your fundraising efforts, it establishes a framework for your overall objectives for donor retention, affinity, and growth. Your time and efforts will be resources well spent as donor relationships prosper, and your portfolios expand to include new prospects.
Continually adding new prospects to your portfolio – sometimes called fueling the prospect pipeline – is itself a strategy for continued growth. Your fundraising database should not only include constituents who have already given financial gifts to your organization, but also the names and information of prospective donors.
Overwhelmingly, the exercise of developing new or refreshed portfolios uncovers hidden gems – relationships that, when nurtured, generate new energy, an expanded prospect pipeline, and more resources. Whether the relationship is with a longtime supporter or a new community connection, you will find the practice of consistent portfolio management can be the change that breathes new life and sustainability into your organization’s fundraising.
This post was contributed by Encore Strategic Partner Rozanne Prather who relishes opportunities to support nonprofits of all sizes and complexities in fulfilling their missions through excellence in fundraising and donor communications.