Welcome to FastDecisions.org
Welcome to FastDecisions.org

Qualifying

Problem: Without a clear process, non-profits may spend too much time on donors who aren’t a good match, wasting resources.

Solution: Use qualification steps to focus on donors with both the interest and ability to give, prioritizing those who can make the biggest impact for efficient fundraising.

Qualifying is the process of assessing and prioritizing potential donors to determine who is most likely to support the organization.

Tool:

  • I. Understanding Donor Qualification
    • The two critical questions for qualification are:
      • Financial Capacity: Do they have the financial resources to give?
      • Interest Level: Do they have a genuine interest in the organization’s mission?
      • A donor qualifies if the answer to both questions is yes.
  • II. Financial Qualification Process
    • Assess Financial Capacity

        • Financial capacity can be challenging to gauge, especially with personal acquaintances. Remember:

      1. Volunteers vs. Financial Contributors: Some dedicated volunteers may lack significant financial resources, while others may introduce valuable contacts or contribute in other meaningful ways.
      2. Focus on Fundraising: Keep fundraising goals clear to avoid overthinking the financial qualification process.
    • Tracking Financial Data

        • Track the following variables for each donor:

      1. Personal Donation Estimate ("Ask to Give"): The estimated amount they can personally contribute.
      2. Fundraising Potential ("Ask to Raise"): The potential funds they could help raise from their network.
    • Calculating Financial Estimates
      • Giving History: Start by reviewing the donor’s past contributions to establish a reasonable baseline.
      • Income-Based Estimates: Consider using 0.1%-0.5% of the donor’s annual income as a guide for personal donation requests.
      • Additional Data Sources: For larger donors, use tools such as property records, political donation databases, and paid wealth screening services to refine estimates.
      • High-Net-Worth Individuals: For extremely wealthy prospects, estimate at 0.5% of their publicly listed net worth as a rough benchmark, though this approach is imprecise.
    • Recording Financial Data

      • Document donation estimates for future prioritization. This list will serve as a foundational element for donor prioritization.

  • III. Interest and Relationship Qualification
    • Identifying Relationships
      • Current Relationships: Identify donors who recognize and are familiar with the organization, focusing on those who would easily respond to direct outreach.
      • Relationship Strength Test: Ask, "Would they know me if I called them?" If yes, prioritize them in the portfolio.
    • Assessing Interest Level
      • Background Research: Review each donor’s public profile, work history, affiliations, and philanthropic activities to determine potential interest in the organization’s mission.
      • Engagement Markers: Assess their engagement level—attendance at events, social media interactions, and newsletter subscriptions.
      • Direct Outreach: When possible, conduct "qualification calls" to discuss donors’ values, motivations, and philanthropic goals to align with the organization’s mission. Listen for the Three Fs:
        • Family: Assess family values and upbringing.
        • Finances: Look for financial indicators.
        • Philanthropy: Gauge their history with similar causes.
    • Low-Commitment Projects for High-Capacity Donors
      • For high-capacity prospects with uncertain interest, invite them to engage in small projects as a means to gauge commitment and enthusiasm.
    • Ongoing Interest Assessment

      • Interest levels are fluid, so regular follow-up and strategy adjustments are essential to sustain engagement.

  • IV. Donor Segmentation and Prioritization by Gift Levels
    • Establishing Gift Levels
      • Principal Gifts: Transformational donations solicited by high-ranking officials (often millions). Requires personalized cultivation.
      • Major Gifts: Significant donations with individualized portfolio management (starting from $1,000 to $100,000+, depending on the organization).
      • Mid-Level Gifts: Bridge donations from regular supporters with potential for future major donations (often $500 to $9,999).
      • Annual Gifts: Regular, smaller donations providing consistent revenue; important for cultivating long-term major donors.
      • Planned Gifts: Legacy contributions from estate planning, providing long-term support.
    • Focusing on Major Donors ‣
      • Pareto Principle: Approximately 80% of donations typically come from 20% of donors, making major donors highly efficient for resource allocation.
      • Consistency and Growth: Major donors provide reliable revenue, with potential for increased contributions and planned giving.
      • Influence and Advocacy: High-impact donors often bring additional supporters, amplifying the organization's reach.
    • Value of Annual and Small Donors
      • Base Support: Small donors provide stable income and community endorsement.
      • Future Major Donors: Many start with smaller donations and increase over time.
      • Recurring Giving and Engagement: Regular, smaller gifts enable accurate revenue forecasting, and these donors often advocate for the organization within the community.
    • Role of Mid-Level Gifts ‣
      • Mid-level donors are ideal candidates for transition into major donor roles through increased engagement and targeted outreach.
      • Segment mid-level donors into larger portfolios, focusing on consistent givers or those contributing near the major gift threshold.
  • V. Institutional Donor Qualification
    • For foundations, corporations, unions, and PACs, gather specific information according to their structure:
    • Foundations:
      • Review grant protocols, past grants, and the interests of program officers.
    • Corporations: Corporate Sponsorships*
      • Ensure alignment with the organization’s ethical standards and examine the corporation’s community engagement focus.
    • Unions:
      • Note campaign limits, PAC type, and the needs of union members to better tailor solicitations.
    • PACs:
      • Understand local restrictions on PAC contributions or independent expenditures relevant to political or nonprofit work.
    • Organize institutional donors separately to streamline outreach.
  • VI. Balancing Research and Action
    • Prospect Research Limits
      • Define time and financial limits for prospect research to prevent extensive research on a single donor. Recognize that some decisions are better made over a straightforward meeting than prolonged investigation.
    • Efficiency in Engagement
      • Prioritize efficient engagement by limiting the depth of research for donors unlikely to advance into major or principal gift categories.
    • Timing and Strategic Focus
      • Adjust fundraising focus according to organizational growth cycles and prioritize high-impact major donors during periods of immediate need.
    • By aligning donor qualification with financial capacity, relationship strength, and engagement level, this approach enables effective prioritization of donors across all levels to maximize fundraising potential and sustain long-term relationships.