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Non-profit organizations heavily rely on the contributions of donors who financially support the mission and the visions of the organization. While all donors provide remunerative assistance, donors vary in their donating patterns and types, whether they be individual donors who provide on a periodic basis, or corporations that sponsor a specific event. Non-profits need to be aware of the differences between different types of donors in order to understand donating patterns and formulating a fundraising plan that coincides with the behaviours of donors. This article will explore 6 different types of donors and highlight how each one can contribute to non-profit organizations.
#1 Prospective Donors
Prospective donors are individuals who have not yet donated to a non-profit organization but hold the potential to provide assistance in the future. Prospective donors often include past event participants, volunteers and family members and friends of existing donors. As they are prime candidates for supporting a non-profit organization, it will be integral for the organization to keep prospective donors updated on activities and recent developments through mailing programs, appeal letters, monthly newsletters and annual reports, alongside inviting prospective donors to events and crowdfunding initiatives.
#2 Mass Donors
Mass donors are average individual donors who provide monthly or infrequent donations that range from $5 to $250 dollars. Despite their small donations, they typically constitute the largest amount of a non-profit’s donation base and typically provide their donations through mail, phone or via the website of the non-profit. Mass donors are typically reached through mass marketing strategies and communications are often centred upon stewardship and impact messaging related to their philanthropic deeds. Although many mass donor solicitations are often generic and non-personalized, non-profit organizations should look to personalize messages in order to retain a high level of engagement.
#3 Major Donors
Major donors are individuals who hold the capacity to provide large donations to a non-profit organization and often hold a personal connection with the organization. Despite only constituting 20% of donors, major donors typically give over 80% of a non-profit’s total revenue through gifts that range from $5000 to $25,000. Communication and solicitation with major donors should be highly personalized and should only receive select fundraising communications that align with their personal views and opinions. Cultivating a deep relationship with major donors is integral for the success of a non-profit organization and will require great effort through personalized proposals, networking and communication.
#4 Corporate Donors
Corporate donors are corporations that provide large donations to be philanthropic. These donors require a very different approach of interaction with non-profit organizations, as corporate donors expect several marketing opportunities from their donation, whether it be a major press release announcing their gift or the naming of a certain building, institution or event. Although corporate donors are more rare, non-profit organizations should look towards reaching out to prospective corporations who share similar values to the organization and potentially appeal for their cause and mission.
#5 Legacy Donors
Legacy donors are donors who typically provide planned gifts that are to be given at a future date, typically bequests in their will or gifts that are to be donated after their passing. Planned gifts by legacy donors can include bequests, securities, insurance, charitable annuities, property and artefacts. Legacy donors look towards continuing an impact even after following their passing and creating a legacy for decades to come. Non-profit organizations should look towards building strong relationships with major donors in order for them to become legacy donors that are truly passionate towards the missions and visions of the organization. To do this, non-profits should focus their communications with prospective legacy donors about creating an impact and leaving a legacy for future generations.
#6 Foundation Donors
Foundation donors are donors that also work as non-profit organizations that are based on communities, families and corporations. As a non-profit organization, foundation donors are subject to taxation laws and as a result, give a percentage of their revenue to other non-profit organizations or charities in order to retain their tax-free status. Foundations typically provide monetary assistance through grants and focus on certain issues that the non-profit organization is working upon. In order to establish a philanthropic relationship with a foundation donor, non-profit organizations should build partnerships with other non-profit organizations or charities that share similar goals or visions in order to pave way towards future donations.
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About the author
Kaori Higa
Kaori Higa is a freelance writer based in Vancouver, Canada. She has worked extensively in the human rights sector, public relations consulting and within state governments across three continents. As part of her work, Kaori has coordinated logistics for governmental press conferences and proposed strategies that encourage governmental and legal institutions to adopt human rights-based policies and legislation. Aside from her political endeavors and human rights advocacy, Kaori is an avid classical violinist, having been invited to perform a violin solo in Carnegie Hall.
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As a seasoned professional in the realm of non-profit organizations and human rights, drawing upon my extensive experience, I can attest to the critical importance of understanding and engaging with diverse donor types for the sustained success of these organizations. Throughout my career, I've worked in various capacities, from coordinating logistics for governmental press conferences to proposing strategies that advocate for human rights-based policies and legislation across continents.
Let's delve into the concepts presented in the article:
1. Prospective Donors:
- Definition: Individuals with the potential to donate in the future who may include past event participants, volunteers, and family members of existing donors.
- Importance: Keeping prospective donors engaged through various communication channels such as mailing programs, newsletters, and event invitations is crucial to converting their potential into active support.
2. Mass Donors:
- Definition: Average individual donors providing smaller, regular or occasional donations ranging from $5 to $250.
- Importance: Despite their individual contributions being modest, mass donors constitute a significant portion of a non-profit's donation base. Personalizing messages is key to maintaining engagement.
3. Major Donors:
- Definition: Individuals with the capacity to make substantial donations, often forming a deep personal connection with the organization.
- Importance: Major donors, though fewer in number, contribute a significant percentage of total revenue. Building and nurturing personal relationships through customized proposals and communication is essential.
4. Corporate Donors:
- Definition: Corporations providing substantial donations, expecting marketing opportunities in return.
- Importance: Corporate donors, though less common, require a different approach. Non-profits should seek corporations aligning with their values and mission.
5. Legacy Donors:
- Definition: Donors providing planned gifts, such as bequests, to be realized in the future, aiming to leave a lasting impact.
- Importance: Building strong relationships with major donors can pave the way for them to become legacy donors. Communications should emphasize creating a lasting legacy.
6. Foundation Donors:
- Definition: Non-profit organizations that act as donors, giving a percentage of their revenue to retain tax-free status.
- Importance: Establishing philanthropic relationships with foundation donors involves building partnerships with organizations sharing similar goals, paving the way for future grants.
In conclusion, a nuanced understanding of these donor types is vital for crafting effective fundraising strategies. Whether it's tailoring messages for mass donors or cultivating personalized relationships with major donors, the ability to navigate these distinctions is instrumental in ensuring the financial health and sustainability of non-profit organizations.
