Redefining Major Donor Identification with the Power of Velocity

In the fast-paced world of fundraising, identifying potential donors can often feel like searching for a needle in a haystack. But what if I told you there's a way to spot the needle without having to rummage through the haystack?

This is where 'velocity' comes in. 'Velocity' is a term borrowed from physics, but in our context, it's used to denote the rate of change in a donor's giving year by year. An increase in velocity indicates increased engagement and a signal of readiness to give more. We measure velocity to track changes in donors' giving patterns. By evaluating the speed at which donors increase their contributions, we can identify those who are signaling that they are ready to become major donors.

To measure a prospect's velocity, we calculate the speed of escalation in their giving through a formula which divides a year’s giving total by the average of the prior three years. This methodology helps us identify what we call the '2.2' factor, which in our experience, is the average velocity just before a prospect gives their first major gift. Now, this '2.2' factor may vary among organizations, so it's best to determine what this factor is for your organization.

The key is to look for any substantial increase in a prospect's giving velocity, which could be an indicator of their readiness to make a major gift. But velocity is just one part of the equation. It needs to be coupled with capacity (the donor's ability to give), inclination (their willingness to give), and affinity (their connection to your cause).

To sum up, velocity is a powerful concept that can help nonprofits identify potential major donors. It's a dynamic scorecard item that, when combined with other data points, can provide a comprehensive view of a prospect's giving potential so that the prospect can be solicited for that stretch gift at the right time.

The power of velocity lies in its forward-looking nature - it doesn't just tell us who our prospects are, but who they could be in the future. Remember, in the world of nonprofit fundraising, it's not just about who our prospects are today, but who they are likely to be tomorrow.

If you're feeling overwhelmed by the prospect of finding your 'needles in the haystack', we're here to help. Scheduling a consultation with us could be the first step towards more efficient and effective fundraising operations.

In the meantime, consider taking our Analytics for Fundraisers Using R: A Beginner's Course. This comprehensive resource can equip you with the tools you need to analyze your donor data effectively. Let us assist you in accelerating your fundraising velocity and realizing your organization's full potential.

Watch our Water Cooler Chat for more insights Prospect Prioritization: Refocusing on Your Most Likely Prospects