In case you missed it (and click here if you did), last week on this blog Melissa Bank Stepno shared her knowledge and some wise words from her colleague, David Lamb, on capacity ratings.
Capacity ratings are an important factor in every major gift effort. They will not be perfect, (let me repeat that – they will never be perfect) and capacity rating are just one of several data points we use, but they are an important tool to help us rank our very top prospects.
One of the common misconceptions of capacity codes is that some folks new to the profession might think that capacity means “How much will they give us?” It doesn’t.
A capacity rating says, “what is this person’s total ‘wallet’ for philanthropic giving in a year to every organization they support?”
Moving on to other factors
So as I say, capacity ratings are just one tool – what are some other tools you use to rank prospects? In our work with clients, we also use inclination ratings and readiness codes to help rank prospects. Whether a prospect is newly-identified or a donor that has been in the database for a long time, these two codes can really help you see which prospects need to have more (or less) attention.
And finally, we use next gift amount and ultimate gift amount to help rank and steward donors.
It sounds like a lot, and it is. But this is the science part of the Art and Science of Fundraising. It’s important and serious work that gets better results.
Let’s take inclination – what does that mean?
An inclination code says, “how much of that ‘wallet’ is this prospect inclined to give to an organization like ours?”
Donors give to a wide variety of things during a year. Their school/university, their house of worship, local organizations, fraternal affiliations, arts, culture, the environment, animals…the wallet gets split up a bunch of ways every year.
And notice that I said, ‘an organization like ours.’ If you work for a college and yours is the only one that your donor graduated from, that’s great. If your prospect (and/or their spouse) is a multiple degree holder from a variety of universities, then you will probably have to split that portion of the wallet.
An inclination code gives you a ranking of where your organization’s mission or organization type fits into that donor’s philanthropic priorities. They could have capacity to make a $100 million gift but absolutely zero inclination to do it.
Until you know for sure where you sit on their list of priorities, you could create a neutral rating. Once you know, go ahead and put in a rating. Be aware that this is a fluid rating because – just like you – every donor’s philanthropic priorities change over time.
What’s a readiness code?
A readiness code says, “when can we hope for a gift from our prospect?”
If a fundraiser had never visited the prospect, the readiness code for that person would be very different than a code given to someone ready to be asked for their ultimate gift.
If you’re thinking “It sounds like a lot of work. Why should I bother with all these codes?” Here’s why:
Taken together, capacity, inclination, and readiness codes provide you with an instantaneous snapshot of all of your rated prospects. Who needs less attention, who is languishing unnoticed, and which prospect manager has an unmanageable portfolio.
You can also generate forecasts for campaign planning by creating formulas that take each rating into account. By discounting or adding value for different factors, such as inclination, you can immediately see if targets are possible given the prospect pool you currently have.
What other codes do you use?