Donor Capacity vs Donor propensity to give podcast

EDDIE THOMPSON, Ed.D., FCEP // Founder and CEO, Thompson & Associates
What’s more important – a donor’s capacity to give or propensity to give?

We spend a great deal of time and energy looking at an individual’s capacity, or net worth.  But, in today’s podcast, Eddie talks about the importance of not only an individual’s capacity but their propensity to give.

 

Listen in as Eddie shares why this is so important, along with specific questions to ask donors to determine both their capacity AND propensity.
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Podcast Transcript

Today, we will discuss an important topic: what’s more important, a donor’s propensity to give or a donor’s capacity to give?

You know, it seems to me we spend a great deal of time and energy looking at an individual’s capacity. In fact, if you look at most research, it really is focused on a donor’s net worth or a donor’s ability to make large gifts.

When I first got into fundraising, I chased every expensive car into every expensive garage thinking I would find a wheelbarrow full of gifts for our organization. What I soon discovered is that you really have to have an individual who not only has the capacity but the propensity to give.

It’s hard to know if a donor has a propensity to give to your organization at a substantial rate or dollar amount unless you have conversations. What you’re going to hear in today’s podcast is that you’ve got to build relationships with these donors – where you build through conversations, you spend time visiting and asking questions, and listening. It’s really important that we listen well.

I want to talk about some questions you might ask to discover if a donor has a high propensity to give to your organization. Then, also some questions to find out if they have the capacity to give.

 

Donor Propensity Questions

Let’s begin with a donor’s propensity to give.

You enter their house and you might ask a question as you look at their office or home’s walls. “I see you love this artwork; can you tell me more about your collection?”

Or, you might look at pictures of family members and ask, “Well, this is interesting, tell me about your family.”  You want to begin by having that conversation, understanding who these people are, what drives them, what are their values?

You might ask the question, “How did you find this piece of art?”

Or, you might ask, “Where was this picture taken?” You’re trying to uncover who is this person.

Many people who are financially sound believe that their heirs simply don’t need a large inheritance. They love their family, they feel like their children are on a good road, that they’re capable and doing well financially. And, there are others who believe that their children should make themselves rather than parents give them resources or assets. I want to know that. I want to know what they think about their children.

Then, I would ask for propensity. “What’s the best business decision you’ve ever made?”

I would follow-up, “Why was it important?”

I want to hear what drives these folks. Are they one of two types of wealth accumulators? They’re either instrumental, where they build wealth not by accident but it wasn’t on purpose. They had a mission, they had a drive, they had something they wanted to do that ended up making them wealthy.

So, I would ask, “What is the best business decision you’ve ever made and why was it important?”

I would follow-up with this question, this is a great question, “What was the best personal decision you’ve ever made? And, why was it so important to your success?” I’m trying to get at their values, their philosophy, what they believe.

Then, I would ask a question very similar to this, “What was the best philanthropic decision you ever made? And, what was its impact on others?” I want to hear the answer to that question. I want to hear what their drive was, their motivation. I want to hear what really gave them joy and pleasure in making that gift. I want to hear what difference they were trying to make in the lives of others, not just the institution they gave to, but how did they change someone’s life?

I would also ask a question similar to this, “Why are you so generous? Why do you give so much away?”

The last question I would ask, with a follow-up question, “You hear about our efforts as an organization, of all the things we do what is most important to you? Or, how would you rank the various things our organization does to help others?” I want to engage them into thinking about what makes a difference.

We’ve also found that people who have a high propensity to give love to answer questions and they love to give advice before they’ll give you a big check. So, it’s important that you find out what is their propensity to give.

 

Donor Capacity Questions

When it comes to capacity that’s a little more difficult because very often when we do wealth searches, we only find out part of the information. You’ve probably had that done in the past and realized you knew some donors who were wealthy that never came up on the radar.

What are some questions you can ask of your donors that would help you understand their capacity to give? I would begin by asking, “How’s business? How’s it going with you? What’s the latest in your business?” Or, whatever it may be. “How’s retirement going? Have you found that transitioning to retirement from work life is easy or hard? How’s that affected you?”

I would ask the question, “How’s the economy affected you?” Because how they perceive the economy impacted them is a major impact on how and when they give.

Then, I would ask the question, getting back to their roots, “How did you decide on your career? What led you in the direction that you followed?”

I would ask, “What’s the single best investment you ever made?”

These are really important questions in trying to figure out if someone has a high propensity to give or a high capacity. But you know what’s the best? When they have a high propensity and a high capacity. Finding those individuals is just an absolute joy, and then engaging them where they end up giving to your organization and they end up thanking you for all of your efforts in helping them make this gift.

 

Donor Follow-up Questions

I want to give you a few follow-up questions, too. We know these, but I want to restate them for you today.

When someone makes a statement, I want to ask a question like, “Why?” or “How so?” or “Would you tell me more about that?”

Or, you might ask if there’s a specific action, “How’d that happen? How’d you feel about that?”

“Are you ready to learn more?” if they’re talking about making a gift.

“Are you ready to take the next step?” if they’re considering a gift.

These are all valuable questions; I hope you find them useful!

We don’t have to pick between capacity and propensity. We’re looking for that donor that has both. I wish you the very best! Keep propensity in your mind as you move forward with your donors. Let’s go make a difference in people’s lives!