Institutions can attract major gifts with planned processes, digital engagement
Organizations seeking charitable contributions from donors will often be more successful if they have a well-considered plan and process in place, a fact that holds true for higher education institutions, according to a new report commissioned by MarketSmart. Additionally, higher ed institutions have tended to celebrate donors that are giving at (relatively) lower dollar-values compared to big-dollar donations, according to Melissa Brown, an expert in philanthropy and the author of the report.
“I think organizations are aware that all levels of age groups feel a cash flow problem. We see that in lots of ways across the United States. I think institutions are sensitive to that. They’re saying you can be a donor with a $5,000 gift,” Brown said. “There’s a perception … somehow or another, if you can actually afford a gift, you could be a good prospect for a planned gift in the future.”
Brown analyzed the results of the survey conducted earlier this year which received 633 eligible responses. Her findings indicated possible ways organizations can procure major gifts, which make up 80% of the dollars raised in fundraising but tend to only be from about 20% of donors. Brown said that in higher ed, the major high-dollar gifts tend to bring in the most amount of money, outstripping the totality of smaller-dollar gifts from donors. Education donors, she said, often will significantly give back at a point in their lives when they are able to do so, so interacting with the $5,000 donor as a major gift-giver could pay dividends for a higher ed institution in the future if they are able to make an even more substantial contribution when it is financially viable.
Brown tracked 11 different methods institutions can use to identify potential major gift donors, from using ingrained staff knowledge to seeking referrals from current donors and prospect research, which 76% of respondents reported they utilized. Brown noted that prospect research, which entails an institution or contracted party investigating the financial background and giving history of an individual to determine if they’re a likely donor, should not only seek to learn the size of someone’s prior gifts but the frequency.
“Don’t just look at how much someone gives, but look at how often they’re giving. Do they give every time you ask?” she said. “Look at the patterns; organizations are doing that by looking at their data.”
This kind of research and analysis dovetailed with tracking the digital engagement of potential donors; according to the study, only 22% of responding institutions and organizations reported they tracked digital engagement, but Brown said it was an area of great promise. While there are privacy concerns about using response data, institutions could track how often a potential donor was interested in news or announcements from the college or university. A donor may not often give a significant dollar amount, but an institution could consider whether a potential donor’s constant interaction with opening e-mails from the institution constitutes a sign they should be cultivated for future donations. Brown said the frequency of a donor's offerings, however small, could be a sign those dollar amounts could increase as the years progressed.
In contrast, Brown said that it was likely that the anecdotal approach of “prospect rating,” in which a team of school staff or board members make judgments on potential donors based on their prospect research history, is likely to dissipate to be replaced by a greater emphasis on digital tracking. 89% of respondents who were using data tracking reported they met their fundraising goals, the highest of any of the 11 methods Brown studied (other high-ranking methods included prospect research and referrals). 54% of respondents reported that the main challenge they faced was not having enough staff to commit to major gift fundraising, or giving staff on hand the necessary time to commit to the endeavor.
Brown also found that the majority of respondents were either planning for or involved in a fundraising campaign phase, and said from her research, it seemed that higher ed institutions were often involved in some kind of campaign, whether they were starting or completing a fundraising push, or involved in the midst of one.
“It’s a really good time to be running a campaign. We’re entering almost the tenth year of economic growth,” Brown said. “Organizations are right to be executing campaigns now because of that period of economic growth.”
However, Brown said it would be wise for such organizations, including higher ed institutions, to always be planning for a period where economic growth would not be an inevitability.