OK, it's hypercompetitive out there for the gift, grant, and/or sponsorship. Other organizations are probably scrambling for all the state, federal, corporate, and individual donor opportunities that exist on Planet Earth. Even some of the larger not-for-profit organizations that traditionally have relied on name recognition and brand are actively seeking new donors and funders. Acquiring new qualified donors takes longer than ever.
But here's some good news: More than 80 percent of donors would recommend the organizations they support to another potential donor. This statistic shouldn't be a surprise. Research shows that most corporate and individual donors are happy with the organizations they support and give high marks to their program services.
The next snippet of good tidings for fundraisers is that referrals from existing donors are roughly three times more likely to turn into a closed gift than a referral from your friendly local accountants and attorneys. Usually, when a savvy CPA steers one of his or her donors your way, there are at least two other fundraisers also being mentioned in the conversation. (Nevertheless, don't misinterpret the value of a good center of influence; cultivating and expanding your professional network probably deserves serious effort.)
But let's think about existing donor referrals for a minute. Everybody knows that they beat "cold calling" or direct mail hands down. With an introduction from one of your best existing donors or board members, you'll have much less trouble scheduling that first appointment.
Gatekeepers seem considerably less intimidating when you can say that "Bill's fraternity brother/golfing buddy/neighbor/board member Andy Miller suggested that I set up a time to meet with him." An added bonus is that the information Andy willingly supplied about Bill's company or his current situation is helpful in a first meeting. As is why he thinks that you and Bill will hit it off.
So every well-beloved fundraiser in the world is asking the organization's best existing donors for referrals all the time, right? The answer is not usually, and for reasons that might surprise you. Here are representative responses from a group of corporate and individual fundraisers I met with recently:
At the risk of stating the obvious, we may have a fundraising management problem here. If your organization isn't routinely asking existing donors for referrals, there are three things you should do:
Find out why. Some of your colleagues may need to be reminded that referrals are a proven strategy for generating leads. Skeptics whose pipelines are light or who struggle with corporate development may require encouragement to try it out. Others—and this might be a bigger group than you think—may need some how-tos to pull this off.
Include donor referrals on the agenda for an upcoming staff meeting. Depending on what you gleaned in your detective work, you could begin by making the case that this is something the organization needs to do more of. You might begin to break the process down into its key elements: (a) identifying which 15 to 20 satisfied existing donors to target; (b) planning the approach (when to ask, how to position the request, whether to show all or part of your prospective donor list, etc.); and (c) executing the plan deliberately and consistently. There may be good reason to talk about the actual fundraising call, to practice asking for a referral, and to brainstorm things such as how to respond if the existing donor demonstrates any of the symptoms of referral reluctance.
Challenge your staff to try this process out for the next few weeks. Get them to agree to ask a certain number of existing donors for referrals in that period.
This modest experiment may not work for everybody. Fundraisers who are blazing trails in markets where they have few loyal existing donors may not be the best candidates for this approach. But for many fundraisers (and here I would also include board members, other key organization staff, and friends of the organization), referrals are a better way to tackle new donor acquisition. As an executive director or development professional, your job is to give your colleagues the direction, guidance, and coaching to make asking for donor referrals work. And if 80 percent of your existing donors really are inclined to refer you to their network, there's a lot of referral gold to mine.
Kevin Strickland© 2010, Kevin Strickland
Kevin Strickland is the founder and president of the Not for Profit Group, a company dedicated to helping not for profits build strong relationships with current and potential donors.
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