Propensity, affinity, and capacity: The Three Keys

Good things come in threes. When it comes to ideal donor ratings, the big three are propensity, affinity, and capacity (The Three Keys). Throughout the nonprofit industry, there are many different perspectives and names for this ratings trio. 

But what do propensity, affinity, and capacity ratings actually mean? We’re here to chime in with our thoughts about The Three Keys in relation to prospect research tools. Ready to learn?

If you are unfamiliar with defining a prospect with the Three Keys, here is the breakdown:

PROPENSITY: Has this person given to nonprofit causes before?
AFFINITY: Is this person passionate about your cause and nonprofit organization?
CAPACITY: How much wealth can this person afford to donate?

You may know propensity as inclination and affinity as linkage or connection. Capacity to give is just another term for a person’s ability to give their wealth to nonprofit causes. What’s important to remember is that no matter what you call donor ratings, they guide prospect research and help you frame major gift asks.

Imagine a Venn diagram of propensity, affinity, and capacity. David Lawson of Working Philanthropy wrote that “…someone with money who is a giver to others can still not be into your mission. Another might love everything you do, but has no discretionary dollars to share.” 

Two ratings may overlap, but the sweet spot in the middle is when all three ratings are known and support each other. That is when you really know you have a great prospect.

Propensity

The Merriam-Webster Dictionary defines propensity as “an often intense natural inclination or preference.”

Perhaps the key word in Webster’s definition is “natural”. A natural willingness to give is a highly desirable trait of the ever-elusive ideal donor. It is much easier to establish relationships with people who genuinely want to be philanthropic rather than trying to coax philanthropic tendencies from scratch. It’s also much easier to frame a major gift “ask” when you have insight into the donor’s personality and how they approach philanthropy through their prior history of giving.

Luckily, identifying donor prospects based on their propensity doesn’t have to be a case of shooting in the dark.

In many ways, understanding propensity is like sketching a prospect’s portrait. Each researcher might define propensity differently according to the type of nonprofit they work for and the campaign they are doing the research for.

This first step lets researchers and developers ask questions: Who is this person? What is their personal approach to philanthropy? Where have they given before? How often did they give? How much did they give?

Wouldn’t it be great if we could find clues into their behaviour? We have you covered.

Finding clues

Giving history (or lack thereof) provides clues about propensity. Examining a prospect’s giving history helps identify personal philanthropic trends. For example, Donor A may give small amounts in regular increments, while Donor B awards a major gift annually. Donor C may donate their time as a volunteer, board member, or pro bono consultant. 

Although there is no universally perfect donor, different nonprofits may consider the above donors ideal to them. As you can see, past behavior is a key clue when looking to find donors with propensity to give.

If we assume prior giving is a good indicator of future giving, the best candidates for future giving must be your current donors, right? Review your organization’s records to determine who has given their time or money (or both!). 

You can also input your donors’ names into your prospect research tool’s Recency-Frequency-Monetary (RFM) scoring system. This provides information about a donor’s most recent gift (recency), how often they donate (frequency), and the gift amount (monetary).

How do I find propensity?

But what if your nonprofit is brand new? What if there are cobwebs in your donor database? What if you’ve never used fundraising intelligence software before? Fear not!

Determining propensity for prospects requires a healthy amount of skepticism and due diligence. Unlike internal-focused research, donor prospect research software gives you access to external records of past giving to organizations other than yours. 

When using your platform, remember to perform an integrated search across all datasets and also within each individual dataset. You may uncover records in individual datasets that a broad search may miss.

Some platforms allow users to target giving history searches over a specific year or range of years. Try searching for different types of gifts, like endowments, event sponsorship, and volunteer time. It’s also important to verify prospect records to confirm their validity and relevance.

Best resources to find propensity data

So, what are the best resources or datasets to find records indicating propensity?

Charitable donations data is an excellent place to start. Again, we return to our understanding that past giving is a good indicator of future giving. In Kindsight’s VeriGift charitable giving database, users can search for gift givers or gift recipients in the United States and Canada across date ranges, gift amounts, and gift types. Pretty cool, right?

Also consider exploring a foundations dataset, such as Candid. This dataset allows you to learn about your prospect’s affiliation with foundations (including both private and public charities) in Canada and the US. You will also learn if your prospect or donor sits on the board of other nonprofit organizations or if they have connections with board members.

Remember that a prospect giving their “time” is also a great indication of philanthropic tendencies. And who knows, maybe that volunteer is keeping their donations anonymous? Especially look out for prospects and donors who support organizations in your same NTEE category.

Affinity

Affinity is defined as whether someone gives to causes similar to yours. At Kindsight, we understand affinity (or linkage) as the strength of a person’s connection to a cause or mission. Affinity is all about relationships and connections.

While it is important to know about a prospect’s wealth and philanthropic history, affinity is arguably the most important element of the PAC rating or score. The likelihood that someone will give a large gift depends heavily on the connection they have with your organization.

There are five primary strategies to find (or create) donors with an affinity to your cause, which we explain in further detail in our article Affinity to give: The key to unlocking donor support:

1. Look to your existing donors
2. Ask everyone in your database for an annual donation
3. Leverage your networks
4. Use wealth screening tools strategically
5. Cultivate affinity

Capacity

Donor capacity refers to how much a prospect has to give. Capacity ratings are based on how much a potential donor has to contribute to all causes over a five-year period. 

There are three types of capacity ratings:

1. Baseline: An unverified rating based on valued assets identified using a manual search, electronic wealth screening, or prospect research tools.
2. Verified/confirmed: Manual research + a method that creates a capacity rating.
3. Strategic: Deep manual multifactor research that is detailed enough to craft an ask amount.

This information is typically determined from available data, but gift officers may know of other indicators of a more qualitative nature. There is also no one-size-fits-all formula for calculating donor capacity, and there are no 100% right answers. 
A donor capacity rating or range does not include propensity or affinity. Many organizations have a multi-pronged approach that takes all three ratings into account but still think about them separately. The wealthiest prospects may not have a history of sharing their resources with others, or may not be passionate about your cause.

Sources of information about capacity

The following are the most common and accessible sources of information about a potential donor’s capacity to give. We explain each in more detail (with formulas for estimating capacity) in our dedicated article about donor capacity:

1. Stock holdings and transactions
2. Annual income
3. Real estate holdings
4. Charitable and political giving

Keep in mind: Ratings are only as good as the records used to calculate them. Records are only as good as the public information available and the cleanliness of your database. Your gift officer, board members, and networks may be able to provide additional insights about a given major donor prospect to fill in the picture. The more accurate and complete your information is, the more precisely you’ll be able to hone your gift asks.

Cleaner data means smarter outreach.

Take a look at iWave’s new data enhancement feature that cleans, completes, and enriches your donor records.

Learn about Appends

Find the major donors of your dreams

Your organization’s ideal donors will have all three ingredients: a general propensity for giving, an affinity for your cause, and the financial capacity to give a gift that would move your organization’s mission forward. Finding these people requires a three-dimensional view that takes in up-to-date publicly available information, records from your internal database, and personal connections. 

Investing in prospect research software that scores prospective donors on all three keys is the fastest way to find the people who sit at the intersection of the Venn diagram. Your fundraising team can then focus on building meaningful connections with these people for long-term, mutually rewarding relationships.

Jill Mccarville

Jill Mccarville is a marketing leader and content creator. She's been working with nonprofits, healthcare and higher education for 10 years, helping to share their stories and tactics for more effective and efficient fundraising.

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