Starting a Charity? Fund Development Planning -- Identifying Prospect Pools

Now that we have our project and our case for support, the next step in our Fund Development Plan is to identify prospects to cultivate and solicit for gifts.

There are typically several kinds of donors to which we may turn for financial support: individuals, businesses or corporations, foundations and government agencies.

We know from many years of observing the contributions given to nonprofit organizations that individuals tend to give the most to charity. Typically, about 75% of all the donations made to 501-c-3 nonprofits come from individuals. In 2007, the Center on Philanthropy at Indiana University reported in “Giving USA” that of the $306 billion given to charity, individuals gave $230 billion. The next largest type of donor, foundations, gave 12 %, while corporate donors gave about 5% and 8% came from bequests (which are also made by individuals).

Our Fund Development Plan for A new nonprofit will include a section that addresses each of these types of donors. As we delineate these constituents, we will focus our attention on the geographic area involved, with some reaching out to the larger region of southeastern Michigan.

1. Prospective Individual Donors – who are the people we can identify in our community that would have both the capacity and the motivation to give to a new nonprofit? We need to identify who these people are, how we reach them, and what we expect from such donor segments.
a. There may be individuals we reach through our direct mail
b. Sine undividuals we know from association with them, such as board member contacts in the community: relatives, friends, colleagues, acquaintances are all potential donor prospects. We also have staff contacts in the community that result from pursuing the organization’s program goals.
c. Then, too, there are individuals who hear of us through various marketing and public relations strategies we will employ

Even before we begin our cultivation and solicitation work, it is important to note that every gift has, essentially, three identifiable elements: capacity, motivation and relationship.

Without the capacity to make a gift, there can be no gift – a person, business or foundation cannot give what they do not have.

But even prospective donors who have capacity may not yet be motivated to think in terms of a new nonprofit. So motivation is a powerful mechanism for directing a donor’s largesse – he/she will give to the causes that motivate them, inspire them, or give them the inner rewards they seek.

What, then, is the way a nonprofit organization can affect motivation? The answer is that relationship is a key to motivation. Individuals (even at foundations and corporations) give to people, give to causes they love, give to get their own objectives accomplished in the world. Therefore, the way to positively affect their motivation is through the creation, building and maintenance of relationships with our donors.

This means that our fundraising plan for focusing on our donors – of whichever type – will be to create and maintain relationships with them over time. Relationships can be created in several ways.

For example, a donor may receive a letter from a new nonprofit that contains pictures of families being helped by our program staff. Let’s say that person is moved, for example, by seeing those pictures plus the text that explains our mission and our work, to write a check for $50. That is the beginning of a relationship to our organization. But it is only a beginning. Much more must be done to help that donor make repeated gifts and to give more, over time, to help our staff achieve service goals.

Another example involves a nonprofit Board member who has a relationship with a colleague in business, in a social situation or in a service club. Having heard the Board member relate all the good things our nonprofit accomplishes, this person has a growing respect for the organization. At a certain point in time that Board member offers to his/her friend the opportunity to make a significant (for that donor) gift to our new charity, and shows the prospect just what can be achieved through making that kind of gift.

One aspect of relationships we will keep in mind is that they tend to stagnate and must be kept fresh. So our Fund Development Plan will include providing our staff and volunteers with new and fresh ideas about cultivation that can keep these relationships we have with people, businesses and foundations fresh and motivating so that our donors will give more.

We'll move on to corporate prospects tomorrow.