Saturday, August 2, 2008

How Many Prospects Do We Need?

One of the old saws in the fund raising world is that we have to solicit three prospects to net one donor. The three-to-one rule has been invoked so often that it is now conveyed with scriptural certainty. We base our budgets, staff size, workloads, portfolio assignments and determinations of success on it. But, to quote a Gershwin song, "it ain't necessarily so." In fact, blindly buying into the three-to-one rule makes our work much more of a slog than it should be.

There are any number of steps we can take to ensure a higher rate of success and make our jobs more rewarding, and philanthropy can be of field of immense psychic rewards. The best place to start is to think carefully about the way we assemble our prospect lists. In too many cases our prospect lists are nothing more than an enumeration of the obviously rich -- whether we know them or not and whether we know how to get an appointment with them or not. I wonder, for instance, if there is any philanthropic organization anywhere, large or small, that doesn't have Bill Gates or his foundation on it?

Rather than pine for or speculate wistfully about the rich-but-remote, we should spend much more time thinking about the philanthropic propensities of our donors. Indeed, there is no better way to turn a prospect list from a pipe dream to eminently workable plan than to do a "propensity scrub." Here's a simple way to do that.

Take your current prospect list and break it into five tiers. Assign five points to the wealthiest of your prospects, four points to the next wealthiest, etc. That will be your capacity rating. Then take that same tiered list and assign a propensity ranking to those same prospects. Give five points to donors who have given consistently to your organization (and presumably have the capacity to give more) and are, or have been, deeply involved in it. Give four points to those who have given once to your organization and somewhat involved but have recently demonstrated a strong interest or deep involvement in one of your current projects. Assign three points to those who have given significantly elsewhere but to an initiative the aligns with one of your institutional strengths or initiatives (e.g. the donor has given to other musical arts organizations in town and you're opening up a new concert hall). Allocate two points to donors who have given elsewhere to something that is somewhat similar to one of your institutional strengths or philanthropic objectives (e.g. the donor who has given to medicine but not to the disease group that your new research center will be tackling). Give one point to those who have given anywhere, any time. Give a zero to anyone on your list, no matter how wealthy, who has no history of philanthropy. That's your propensity rating. Then add the capacity ranking to the propensity ranking and rearrange your list according to the combined scores. Under that system, a prospect may be given a five for financial capacity and a zero for philanthropic propensity for a total score of five. That donor is ranked well below the one who was given a three for financial capacity and a four for philanthropic propensity for a combined score of seven. Those with the highest combined scores are most worthy of our time and attention. Even this simple method will make a significant difference but there are even more sophisticated methods for determining propensity.

With this combined list, the next steps become more logical, efficient and rewarding. Once we have an inclination of a donor's specific propensity (e.g. a long record of supporting certain kinds of causes), we can align our strategies and approaches with that inclination. If we know only of a donor's broad propensity (i.e. that he or she has been philanthropic), we can design our initial approaches to determine if there is a specific propensity that maps against one of our organization's strengths). We don't "cultivate" these donors in an ill-defined way; we interview them to determine degrees of alignment. We're not selling right from the outset, we're listening.

Once strong alignment between donor and institutional purposes has been found, or is brokered through numerous interactions, we can begin to think in earnest about the solicitation. And I can assure you that if this kind of approach is taken, if we determine propensity from the outset and take the time to align the interests of our donors with our organizations mission, the majority of our solicitations will be successful. That's right. That's what I said. The majority.

If we only go in pursuit of the obviously rich and ambush them at the first opportunity with a solicitation, assuming we can even be in a position to lay an ambush, we'll need at least three prospects for every successful solicitation.

The former is not only more efficient; is is far more rewarding for philanthropist and fund raiser. And we need more such mutually rewarding relationships to make sure that the philanthropic revolution is achieving the greatest possible social good.

1 comment:

J.Terrell May said...

Have enjoyed your blog...Keep it coming!!!!...J.Terrell May/Winthrop University