Guest Blog Post —Giving Affinity, Capacity, & Propensity: What Do They Mean?

Enjoy this guest blog post, authored by Sarah Tedesco, the Executive Vice President of DonorSearch, a prospect research and wealth screening company that focuses on proven philanthropy. See Sarah’s full bio at the end of the post.

The fundraising landscape is constantly changing. With new technological innovations and ways to engage your supporters, you can learn more about your donors than ever before. And the more you know about your supporters, the better you can communicate and steward them towards that final gift.

In particular, a donor’s giving affinity, capacity, and propensity can reveal a substantial amount of information on how they may impact your organization. Your donors are some of the most important people to your mission, and without their generous support you wouldn’t be able to meet any of your fundraising goals.

Learning more about your donors and their potential impact on your nonprofit is key if you want to increase your fundraising efforts and maximize all opportunities. Collecting and analyzing valuable donor data can fuel your marketing efforts, helping to create targeted, personal communications that will engage your most important supporters.

To set your nonprofit up for success, this guide is designed to answer the most common questions nonprofits ask regarding a donor’s giving affinity, capacity, and propensity. Here’s what you’ll be exploring:

1. What’s the importance of giving affinity, capacity, & propensity?

2. How can you find out a donor’s giving affinity, capacity, & propensity?

3. How can this increase your fundraising efforts?

Your donors love to support your organization, and it’s always worth it to take a step back and look at the hard data that might reveal why. Let’s begin.

1. What’s the importance of giving affinity, capacity, & propensity?

Before we get into the importance of these three concepts, it’s important to understand what each is. To ensure you have a strong foundation of knowledge to build upon, let’s first define them:

1. Giving Affinity: This describes how much the donor is connected to your nonprofit’s cause and mission. This can be based on emotional, social, political factors, or a combination. The greater a donor’s giving affinity, the greater the chance they care about your organization and will want to support you.
2. Giving Capacity: This describes the much the donor is capable of giving to your nonprofit. This is usually based on the donor’s wealth status and financial position. The greater the giving capacity, the greater the chance that the donor can make a substantial gift.
3. Giving Propensity: This describes how likely that donor is to donate in general. This is similar to giving affinity, but it doesn’t necessarily depend on the donor’s connection to your cause. Donors who have given in the past to any organization have more of a natural propensity to give than others, whether that’s due to caring about the cause or just feeling good when charitable. The greater the giving propensity, the greater the chance the donor may make any gift.

4. Your donor’s giving affinity, capacity, and propensity are some of the best ways to understand how that donor might affect you in the future. For reference, your most promising donors will have a high affinity, capacity, and propensity. According to DonorSearch, determining these three traits is also the best way to determine your prospective major donors.

Your major donors are the supporters who truly propel you towards your fundraising goals. Using insights from the Fundraising Effectiveness Project, it’s seen that almost 76% of nonprofit gifts come from just 3% of donors. By coming up with a list of prospective major donors, you can start stewarding them early on, developing those relationships in hopes of a major donation in the end.

Besides identifying your potential major donors, highlighting your donors’ giving affinity, capacity, and propensity can help you optimize your fundraising efforts in other ways. For instance, you’ll be able to:

• Offer realistic suggested giving amounts on your donation form. Knowing more about your current donor base’s giving capacity and past gifte sizes can clue you into how much they tend to give. This way, your suggested giving amounts are based on concrete data.
• Tailor your direct asks. If you ever send a fundraising letter or an email solicitation, asking for a specific amount can help you get the funds you need. This is easier to determine when you have data to back up your direct asks, like your donor’s giving affinity, capacity, and propensity.

The more you know about your donors, the better you can engage your donors. Data-based marketing is the top way to do that, especially if it also helps you identify a donor’s giving affinity, capacity, and propensity.

2. How can you find out a donor’s giving affinity, capacity, & propensity?

While it’s great to have information on your donors’ giving affinity, capacity, and propensity, it’s not something that you can simply estimate. The best way to learn about your donors and their potential impact to your organization is to screen them for both philanthropic and wealth indicators, a process known as prospect research.

Philanthropic Indicators

Philanthropic indicators are simply data points that represent just how likely someone is willing to give charitably, whether to your specific organization or just in general. These are important metrics to track, because even if someone has the financial capability to make a gift, if they’re not philanthropically inclined at all, it’s unlikely that they will.

Here are some philanthropic markers to look for:

• Past charitable giving to similar missions. Based on data from a charitable giving database, individuals who make gifts of $10,000 to $25,000 to a nonprofit are 10 times more likely to make a donation to another charitable organization than the average person.
• Personal relationships to your cause. For example, if your nonprofit provides educational opportunities to eligible kids, those who previously participated in the program are most likely to be prospects because they’d have a high giving affinity.
• Similar nonprofit involvement as a board member or trustee. If you learn that a donor is involved with another nonprofit and plays an important role there, they’re likely more philanthropic-minded than most. Their affinity to give to your cause will be greatest if the other nonprofit’s mission is related to or aligned with yours.
• Political giving. Political giving demonstrates a proven interest in supporting their beliefs with their money, making it a potentially very useful philanthropic marker for nonprofits.

In order to best determine a donor’s giving affinity and propensity, screening for philanthropic metrics and data points will be your top choice.

Wealth Indicators

Wealth indicators are data points that represent the financial capability that your donors may have. This is important to track, because those with more wealth indicators are good candidates for major gifts.

Here are some common wealth markers to look for:

• Past giving amounts. By looking at a donor’s past giving amounts, you have direct insight into how much they were capable of giving in the past. For instance, if someone has only given under $100 gifts, it’s unlikely that they’ll suddenly give a major donation.
• Real estate ownership. Using public databases, you can look up how much real estate this particular donor might own. Those who have a lot of property in the market are likely to have a larger capacity to give in general.
• Stock ownership. Similar to the above, determine whether the donor owns any stocks. Investments in many stocks or those that are doing extremely well can indicate that they have a large capacity to give.
• Business affiliations. Sometimes, a donor’s business affiliations can clue you into how much they’ll impact your organization. From who their employer is to what their job position, this data can be critical.

While it’s important to track wealth indicators, remember that just because someone has the funds to make a gift, doesn’t mean they necessarily will. In order to fully understand a donor’s potential impact on your organization, it’s essential that you screen for both of these metrics.

It might be possible to conduct prospect research on your donors manually, but this is also time consuming, especially if you have a large database of supporters. Consider investing in a dedicated prospect research tool to automate this process and screen entire batches of donors at once.

3. How can this increase your fundraising efforts?

It’s clear that the more you know about your donors, the better you can engage them and leverage opportunities when they come up. Besides helping you identify your prospective major donors, determining your donors’ giving affinity, capacity, and propensity can also increase other fundraising efforts.

Since prospect research involves screening your donors for a number of different data points and indicators, you can also:

• Determine matching gift eligibility. According to this Double the Donation article, an estimated $4-$7 billion in matching gift funds goes unclaimed each year. If this is something that your own nonprofit is neglecting, take a look at your donors’ wealth indicators and business affiliations. This way, you can figure out your match-eligible donors and send them the appropriate materials with pertinent information such as how to submit a matching gift request.
• Account for donor-advised funds (DAF). DAFs are a special type of savings account that is created with the intentions of donating its contents to charity in the future and made without choosing the specific recipient. Donors can continue to put funds in their DAF until they are ready to donate it. Using your prospect research, you can determine if any of your donors has a DAF. Start building relationships with those prospects now, so that in the future, if they make a gift, you’re on the top of their minds. To learn more, this webinar explores donor-advised funds in depth.
• Prepare for planned gifts. One of the reasons why a donor’s giving propensity is so crucial is that it can help determine if that donor would make a planned gift, whether in the form of bequests or trusts. Past giving history and wealth indicators can also help predict if any of your donors are planned gift candidates, even more so if they have a high giving affinity. Conducting a planned giving campaign can take some time, so make sure you have the data and research to back it up.

Exploring your donor base’s giving affinity, capacity, and propensity is crucial if you want to maximize all opportunities available. Oftentimes, you don’t even know what you’re missing out on. Conducting prospect research as early as possible is your best bet, giving you time to carefully craft any fundraising effort, whether it’s to increase matching gifts or prepare for a planned gift.

Your donors are the most important players in your mission. With a better understanding of them, you can create more targeted marketing strategies and explore all giving avenues. Hopefully, this guide has given you some guidance and you can now determine your donors’ giving affinity, capacity, and propensity with confidence. Good luck!

Guest Author: Sarah Tedesco

Sarah Tedesco is the Executive Vice President of DonorSearch, a prospect research and wealth screening company that focuses on proven philanthropy. Sarah is responsible for managing the production and customer support department concerning client contract fulfillment, increasing retention rate and customer satisfaction. She collaborates with other team members on a variety of issues including sales, marketing and product development ideas.