What are identification and qualification?
Major gifts fundraising is a process based on the premise that it takes time to prepare donors and ask them for a major gift. It can take 6-18 months from when a major gift prospect is identified and then finally solicited for a donation. During this time, the prospect transitions through various stages in the major gift process. Common stages include identification, qualification, cultivation, solicitation, and stewardship. In Part 1 of this post, I will outline the key elements of identifying and qualifying major donors.
Identification
Identification is the process of predicting who are the best candidates to join the list of major donor prospects. This process is time and resource-intensive. An average organization does not have the capacity to conduct a full identification and qualification process on every individual connected to the organization. Tools such as market segmentation can be used to break down the prospect pool into smaller and more manageable groups. The goal is to identify characteristics that the organization believes make the individual more likely than others to donate. Segmentation can be based on almost any variable; some of the most common variables are age, gender, family life cycle, income, occupation, and location. For example, an organization may be interested in targeting high net-worth volunteers who have been volunteering at the organization for two or more years and who are over the age of 60. Identifying the characteristics that inform successful segmentation comes with some trial and error, but as the goal is to create smaller and more manageable groups, it is still more resource-efficient than trying to funnel your entire prospect pool through this process.
Additionally, effective segmentation relies on accurate and robust data collection. Data collection is a critical part of a fundraising strategy, as it may be that an organization lacks the necessary information to identify prospects and execute the major gift strategy. This would require a reevaluation of the organization’s data collection processes and a different approach may need to be taken.
Qualification
Once major donors prospects have been identified, prospect researchers turn to the qualification process. Qualification is the process in which quantitative and qualitative data are collected and analyzed for the purpose of further reducing the prospect pool. Quantitative data can be derived from wealth screening tools, internet searches, and donor history. Qualitative data relies on the observations and collection of information through direct experience and anecdotes. These observations are collected from volunteers, such as trustees, volunteers, staff, and or other trusted sources.
The goal of both qualitative and quantitative data collection is to rank prospects based on their linkage, capacity, and interest. Relevant considerations include: whether the prospect is capable of making a large gift (capacity); whether they are committed to the mission (interest); and, whether the organization has a way to connect with them (linkage). This compilation of research will lead to the development of your “Key Research Outcomes.” The more robust and detailed these notes, the more likely you will be able to accurately assess the outcome of a major donor solicitation and appropriately allocate the time and resources into the solicitation.
See the pyramid below:
Linkage – A strong connection between the prospect and the organization.
Ability – The financial capacity to contribute a sizable gift.
Interest – Belief in and passion for the cause or project.
Prospect research is typically led by one or more members of the development team and is a shared process including regular review of top prospects by members of the development or major gift committee. The combined analysis of both the qualitative and quantitative data makes this process invaluable.
Identification and Qualification in small shops
I am well aware that many smaller organizations find the prospect of developing strong identification and qualification processes too time intensive as well as cost prohibited. I, of course, would welcome the opportunity to share with your leadership and board the conclusive benefits of investing in this process, but also understand that sometimes you have to prove the model before you can allocate more resources to this task. So here is the small scale version of this process:
Take 10 minutes out of every board, or fundraising committee, meeting to list the names of individuals who have been instrumental to the health and success of the organization. Make sure to expand the focus from just monetary contribution to include naming founding families, long-standing volunteers, former board members, local leaders, influential business owners, partner organizations, retired employees, etc. By focusing on one topic at a time you are leveraging the institutional knowledge and network of your trusted volunteers. You have just created viable prospect lists that can be used to create a targeted solicitation strategy.
Rate each list according to linkage, ability, and interest. You may need to embark on some creative guesswork, but a lot of information is available online. Pay attention to public donations related to charities that are aligned with your mission, the frequency of their donations to other organizations, and make note of how strong their relationship is to your organization.
Finally, take the time to develop a targeted solicitation, or relationship building, plan for your top-rated prospects. Perhaps it is time to establish a planned giving campaign for past employees or host a young-donor networking event. These are low impact methods of acknowledging the unique relationship that the donor, or prospect, has with your organization. You are now well on your way to developing a viable pipeline!
Whether you are a well-established shop or trying to build the plane while flying it, donors can tell when you have done your homework. The ultimate goal from the process of identification and qualification is to see the person as a unique individual and one who can make a unique contribution to your organization. As long as you are moving towards this goal you are honoring the donor and will see the rewards of your work.
Until Part 2,
Carolyn