The High Value Donor
Where do you think the high value donor’s money came from?
There are three choices. One, they hit the lottery. Two, they inherited it. Three, they earned it.
If they won it in the lottery, get as much as you can quickly. History suggests that they won’t have it long.
If they inherited it, they typically give it away based upon their heart’s dictates. You need to come to understand who they are and what is important to them. Only if your cause resonates with them are you likely to receive a significant gift. Here we want to define significant in terms of their capacity to give rather than your desire to have.
If they earned it, they will give it away as their heart and intellect dictates. This group has two hurdles. They have the heart issued just mentioned. They also have the intellect issue. They think in terms of the return on investment. What is the return on any investment they make in your agency?
If they earned it, they understand business very well. Do you understand business as well as they do? Do you understand the return on investment (ROI) concept?
Success in business means making every action count. One must ensure that each step is the most efficient and effective it can be. Each step (investment of time and money) must be worth it. Is that how you operate your nonprofit? Can you prove your claim that the agency is efficient and effective? Proof comes from data rather than analogies or stories. By the way efficient is less important. Good leaders know that the staff does the best it can to make good use of the time and money.
Analogies are just stories. A story says it happened once. A story is good for turning a heart. Business people like stories just like everyone else. They also like to know that the story is representative of what happens all of the time rather than being an exception.
Data shows that it happens frequently. Data shows that it happens consistently. Data shows that it is happening more often. Data seldom turns hearts.
Proof makes the agency a good investment. Can you prove your agency is a good investment?
You need both the data and the stories. Data proves it is happening. Stories engage the heart of the investor. You need both if you are going to attract high value donors and receive a gift that is representative of their ability to give.
In business, one is concerned about the ROI. If you put in a dollar, how much do you get back? Just getting back the dollar is very poor performance. Getting back less than a dollar is almost a sin. You feel the same way about your investments in savings accounts, annuities, stocks, pension fund, etc.
So how does this apply to your school, church, or nonprofit? At first look, ROI seems silly. Donate to a nonprofit and 10 minutes later, it is gone. Donating to a nonprofit is never a good investment if you are going to look at the economic return to the donor.
So change it to social return on investment (SROI). This could be spiritual return on investment (SROI) if it is a faith-based organization.
Now what happens when you put a dollar in? What do you have 10 minutes later? If that dollar saves a young man from going to jail, the return on investment is 100s of thousands of dollars for society. If it saves a life, the investment (donation) is priceless to the person and their family. If the donation prevents a rape, abuse, or malnutrition, it is priceless. The SROI can be huge.
The first challenge is to take the time to quantify it. The second challenge is to measure the frequency. The third challenge is to build a plan that will ensure that the frequency is improving.
The next time you talk to a high value donor, have the data and the stories that explain the SROI. They will be much more generous. If you operate a school, they will be more likely to enroll their children. If you run a social service organization, they will be more likely to refer their staff, friends, and clients.
By the way, if you can continue to provide a solid and improving SROI they will become a generous, consistent, and loyal donor.
