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Wealth-X presents principal gift fundraising best practices for fundraisers seeking to engage new and existing major donors.

Major and principal gift fundraising is at the heart of operations for most not-for-profit organizations (NFPs). However, many NFPs take a reactive and fragmented approach to pursuing these gifts, relying heavily on their existing donor base and neglecting the potential broader market of those with capacity and an interest in their mission.

Organizations that want to make progress in this area need to take an integrated approach: combining a prioritized list of qualified donors to set a roadmap for development through deep prospect intelligence, systematic referrals, as well as new donor acquisition and risk mitigation.  Wealth-X provides a full suite of solutions to enable NFPs to pursue a truly end-to-end major and principal gift fundraising strategy supporting throughout each stage of development, each guided by the following principles.

Five Best Practices for Major and Principal Gift Fundraising

1. Donor Qualification

Understanding donors’ potential to give should be a foundational exercise for all NFPs. However, most don’t go past the first stages of the exercise – evaluating donors based on tracking and benchmarking their historical giving.  For organizations pursuing principal gift fundraising strategies and campaigns, stopping here is likely to leave significant opportunity on the table, especially with prospects who have already expressed interest in the mission of the organization. Rather than just looking at giving history with one organization, an initial donor qualification screening should focus on the donor’s true potential for giving. This screening should draw upon a comprehensive view of the donor’s giving to all organizations, as well as data about his or her actual wealth and liquidity. Some candidates who currently give $500 annually may be well-positioned to give over $1 million, but organizations that don’t pursue robust donor qualification will never uncover this potential.

2. Prospect Intelligence

Once individuals with a high capacity have been prioritized based on accurate wealth intelligence, the logical next step is to gather key information on those prospects to inform outreach and shape engagement strategy. While it’s important to prioritize individuals based on their capacity to give, doing so only touches on one component of the engagement strategy. It’s helpful to start by building a holistic picture of both current and potential donors, which can be a real driver of fruitful conversations. What makes this person tick? What are their interests, passions, and hobbies? Why did they give to one organization rather than another? What led to their engagement with an issue or cause? Most importantly, how can you tie your organization’s mission with a prospect’s philanthropic mission?

The goal of this fact finding is to tie an organization’s existence and mission to the individual’s passions – and acquiring qualitative prospect intelligence allows you to tailor the conversation in the right way. Identifying common interests will make prospecting and connecting feel natural to the organization and the individuals.  Present prospects with a convincing vision; strike a chord and provide a reason for giving that will ultimately create impact with their philanthropic contributions. Wealth-X Dossiers are the best source for this prospect intelligence, and a critical launching pad for successful donor engagement and securing a principal gift.

3. Systematic Referrals

Prioritizing donors based on giving capacity and building a rich qualitative picture of each donor is important for principal gift fundraising. But there is another critical step to leverage your key relationships to the fullest extent – developing a systematic approach to referrals. The greatest advocates for your brand are the people who have already bought into your mission. You have an existing network of connectors, and you can leverage relationship mapping data to find personal connections.

Approaching existing donors with additional requests may seem daunting because they are often busy and have already contributed financially to your cause. It’s important to focus on creating an efficient and effective process to empower your existing donors to become organizational advocates. Understanding board affiliations, business relationships, personal networks and the best path to entry for each is imperative for a proactive referral program. Work back from the outside targets you’re trying to reach, as well as tracing out the networks of existing donors to find relevant connections. Identify the key advocates who will help build out your proactive referral program. Look holistically across your network to uncover your connectors. This process of relationship mapping can unlock significant additional giving potential and empower your advocates to help the mission beyond their financial contributions.

4. Donor Acquisition

It’s important to effectively leverage screening results, wealth intelligence, and relationship mapping to help size your primary and secondary target market and focus on a select group of aligned donors, rather than just indiscriminately marketing to a broader affluent audience. For example, organizations fundraising for hurricane relief efforts should target those who have a proven connection to the cause and the capacity to give at the levels that match your principal gift fundraising objectives. Perhaps they have contributed to such efforts in the past or have family and business connections in affected areas. Focusing on a narrower range of higher probability prospects is always the better way to start. It’s far more efficient and effective to find the one person willing to give $1M rather than having to find 10 people who will each give $100K.

5. Risk Mitigation

Even a casual glance at any major newspaper or website will show that some donor engagement can open your organization up to significant risk and negative publicity.  In today’s 24-hour news cycle, the consequences of incorrectly assessing reputational risk associated with certain individuals can be catastrophic. The fallout involving the high-profile organizations that aligned with the likes of Jeffrey Epstein or the Sackler family are only the latest in a series of scandals growing in frequency and intensity. There has never been more media scrutiny of sour money and where it’s donated. Given the potential impact to reputation and ability to pursue mission, it is crucial for organizations to take a formalized and proactive approach to risk mitigation.

Wherever your organization falls in these phases, Wealth-X provides a world class suite of solutions and services to drive successful major and principal fundraising and engagement. Putting all of these tools to use in a formulaic manner is the key to ensuring that your organization is maximizing on the full potential of your addressable market of VHNW and UHNW individuals.

For more information on how the Wealth-X products enhance and empower major and principal gift fundraising strategies, contact us today for a personalized demo.