When you look at your donor database, you may notice a range of donor types from individuals who give monthly to corporations that support specific events. Each donor type has different reasons to give. Your job is to find that reason and create a fundraising plan to address their needs. Learn how to address each donor type below.
A mistake some nonprofits may make is treating each donor category the same. When you look at your donor database, you may notice a variety of donors ranging from individuals who give annually or monthly to corporations that support a specific event. Each donor type will have a different reason to give. As a nonprofit, your job is to find out what that reason is and create a fundraising plan that addresses the donors’ needs.
The best way to do this is to break donors into donor categories. Within these categories lies a whole host of other groups that you can better target with personalized outreach.
The following categories are the most common types of donors. They should be targeted and addressed differently depending on the organization’s goals.
The most common nonprofit donor category is the individual donors. This type of donor can be broken down further into prospects, new donors, and long-time donors.
Prospects are different from other individual donors because they have not donated yet but have the potential and capacity to give in the future. Examples of this type of donor are event attendees, volunteers, and friends and family of other donors.
Event attendees are probably the easiest to convince. These prospects show enough interest in your organization or event to attend in person or online. Event attendees who see how their donation can make a real-life difference will be more likely to give.
Volunteers are another easy target since they have personal experience with your organization. During your year-end campaign, be sure to send an appeal to all volunteers.
The final group of prospects is the friends and family of your current donor base. Nonprofits have found great success with crowdfunding and peer-to-peer campaigns. These campaigns allow donors and volunteers to create personal campaign pages and raise funds online from their friends and families.
Pro tip: Wealth screening is a great way to find additional prospective donors. The results of the screening process should identify potential donors who have the financial ability to give.
Nonprofits must not ignore their new donors. Most donors will give, receive a gift receipt, and not hear from the organization until the next fundraising campaign. Donors do not enjoy feeling like cash machines, and if your only communication with your supporters is a financial request, you will quickly lose their interest.
Nonprofits can take several steps to strengthen relationships with their new donors. After a donor gives their first gift, your nonprofit should send them a personal thank-you letter along with information on how their gifts will help the organization. Nonprofits can also share more information on programs and upcoming events.
Long-time donors offer nonprofits another opportunity for relationship building. To strengthen relationships with these donors, organizations should contact them regularly to show their appreciation and share information on programs. Nonprofits should also contact these donors for reviews and feedback. Long-time donors’ experiences can help you promote the organization and make necessary changes to the way you reach out to donors. These supporters can also become ambassadors for your organization.
Crowdfunding and peer-to-peer campaigns are excellent ways to get your long-time supporters to raise money and share information on your nonprofit with their online community. Nonprofits should support these donors with images, stories, and updates on the organization’s programs.
The second category of donors is major donors. These supporters have the potential to give nonprofits large gifts that can change an organization’s future. Remember, all major donors start out as prospects or new donors. Nonprofits can turn these prospects and new donors into major donors through strategies like moves management.
Larger nonprofits will often have separate staff to work with major donors. These employees will spend time researching, developing donor profiles, and communicating with a few donors throughout the year. Moves management is not a short-term plan, and it may take years before a major donor gives to your organization. The goal is to find individuals willing and able to donate and offer them a program or project that inspires them to give.
Check out this Donorbox webinar where Jay Frost, the president of Frost Fundraising, talks about the art of acquiring major donors. He explores the strategies to discover the major sources of support, identify them through free/low-cost tools, and finally, build lasting relationships with them.
Businesses may be interested in giving to a charity either because their CEO cares about the cause or because the nonprofit has offered exceptional marketing opportunities.
In the age of social responsibility, customers expect companies to better their communities. Nonprofits can use this expectation to their benefit by finding companies with similar interests. Companies receive several sponsorship requests every year. To get the best results, nonprofits can create sponsorship packages that increase a company’s brand visibility, offer outreach to a new customer base, and increase their credibility.
While event sponsorships are the most common, some companies may be interested in partnering with your nonprofit in other ways.
If a company or its CEO is interested in your organization’s mission, they may be interested in sponsoring a program, offering technology grants, or supporting your organization in other ways. These ways include volunteer days, volunteer grants, employee giving, and matching gift programs.
Volunteer days have been held by companies like Comcast for years and can quickly become partnerships. In some cases, Comcast volunteer days have turned Comcast into an event sponsorship and even encouraged Comcast employees to become board members.
To become one of these lucky organizations, it is best to plan in advance how your organization can work with such companies. Creating a program for these companies will make it easier to respond if they contact you. Nonprofits can also let their donors know about their volunteer needs and encourage supporters to ask their employers if they have a volunteer day that could help.
Remember to ask these corporate volunteer groups for donations, too! Usually, the participants are willing to give after a rewarding experience with your organization.
Many companies are offering smaller financial gifts to nonprofits where their employees volunteer. Employees must fill out an application and get proof of the number of hours worked, and the company will pay to match their time. While these may not be significant grant amounts, they can also be a step toward building a long-term relationship with the company.
Some companies have chosen another way to support their employees’ generosity. With employee giving programs, companies let their staff take a percentage or dollar amount from their paycheck and send it directly to the nonprofit of their choice. The convenience of these donations makes giving a treat and lets employees regularly give without a second thought.
If your organization receives employee gifts, be sure to send personal cards to these donors and find ways to thank and educate them on other opportunities to stay involved.
Employee giving programs may also include matching gifts from the company. In these cases, the company will give the same gift amount or a percentage of the total gift amount. This donation should be acknowledged and can be another excellent way to start a relationship with a potential corporate sponsor.
Donorbox lets you integrate seamlessly with Double the Donation and add a matching gift widget to your donation form. For example, the below donation form has a matching gift widget that lets its donors search for their companies’ matching gift programs. After that, they are guided through the entire process for availing of this great opportunity to help a cause.
Start Collecting Matching Donations
Corporations and nonprofits can form partnerships that benefit both and their community. Each connection your organization has with a company can blossom into a community partnership and should be cultivated as seriously as any major donor.
The final donor category is a foundation. These donors are also nonprofits and come from communities, families, or corporations. As a nonprofit, foundations work within U.S. tax laws. They provide a percentage of their income to charities to keep their tax-free status.
Foundations generally supply these funds through grants and often focus on one or two areas of concern. They will provide grants to only nonprofits with programs addressing these issues.
Nonprofits can find grants with grant research companies or freelance professionals, or they can do their own research on Google or with the U.S. government. There are over 1.5 million foundations in the United States.
When applying for grants with a foundation, it is vital to start with relationships you already have or build a relationship with leaders in the foundation. Competition for grants is fierce. Organizations that do their due diligence to form these relationships will have a better chance of receiving funds.
As you research and develop communication plans to address each donor category, remember to record all the information you find in your donor database.
Donorbox offers a donor management system that nonprofits can use to collect this information and record all communication done with donors. If your organization is looking for an affordable online donation processor and donor management system, visit our website for more information about all of our features.
For more fundraising tips and resources, check out the rest of our Nonprofit Blog. Subscribe to our newsletter to receive a curated collection of resources and blogs delivered to your inbox every month!
Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
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Kristine Ensor