How to Identify Potential Nonprofit Donors Using Circles of Connection
Circles of connection is a common brainstorming exercise that nonprofit organizations use to identify possible individual donors. This exercise is most effective if both staff and board members participate. Follow these steps:
Identify the people who are closest to the organization — those within the “inner circle.”
This inner circle includes staff and board members and active volunteers or clients who frequently use the organization’s services.
Identify those people who have the second-closest relationship to the organization.
This second circle may include family and close friends of those people in the inner circle, former staff and board members, neighbors of the organization and its inner circle, volunteers, and clients who sometimes use its services.
Take one more step backward and identify the people who make up the third circle.
These folks may include grandparents or cousins of those people in the inner circle, old friends whom they haven’t seen recently, friends of former staff and board members, and former or infrequent users of the organization’s services.
Identify the friends, relatives, and other associates of those who make up circles #2 and #3.
Search for your cause-related friends and associates.
Look for people who may not know anyone involved in your organization but who demonstrate an interest in the subject and the purpose it represents (as indicated by their memberships, their magazine subscriptions, or their contributions to similar organizations). Follow the local media and watch for people who take an interest in your cause because of their personal experiences.
For example, maybe their child was born with the congenital disease your nonprofit is studying, or maybe they come from a forested part of the state and care about the preservation of old-growth trees.
You can continue enlarging your circle of connections, but with every step you take from the center to the outside, the bond between the organization and the potential donors weakens. As that occurs, the cost of raising money from the people who inhabit those circles increases. Eventually, the cost of securing gifts from an outer circle becomes higher than the likely amount of income to be gained.
How do you know when it’s time to stop and back up? Most organizations try to keep the cost of their overall fundraising at or lower than 20 percent of their organization’s budget. However, when you’re starting out, particularly with some kinds of fundraising strategies, such as mailings or special events, your percentages may be higher in the first few years.
These approaches generally begin to bring in significant contributions as they’re repeated and donors renew their gifts. If you’re still just “breaking even” in year three, it’s time to back up and refocus your approach.