An Enhanced Definition: LAI Equals Long-Term Appreciative Investors
Each week I share with prospects or donor’s information about our organization from a fundraising perspective. It is always brought to my attention that you should identify potential donors first and then employ the concept of “LAI.” The features of LAI are very important to the fundraising process. What are we specifically talking about when defining this concept?
According to Quizlet “Current and Prospective Donor Research,” people give to people—not organizations. People can give only what they have, not what organizations think they must give. People give only when they are interested and involved in a cause or organization. The best way to identify prospective donors is to use the people and information resources already found within an organization through research.
The first phase of the research process is having an organization compile a list of “suspects,” or individuals who with further research may become qualified, prospective donors. The most effective method of identifying new prospects is to consider those individuals who are currently or previously involved in the organization, such as board members, gift club members, donors, volunteers, staff leaders, affiliated groups and special event attendees.
Using prospect research, donors should be identified and qualified, cultivated, solicited, stewarded and renewed for a gift, according Indiana University Fund Raising School. Each fundraising professional should create a specific strategy of cycle engagement for each donor. As the relationship deepens with a donor, new data from the donor must be generated and processed. Over time, greater and richer data will be available to create more in-depth strategies. Data should obviously be generated from face-to-face meetings, plus any research tools available.
According to Association of Fundraising Professionals, significant donor gifts fall into the realm of major gifts. A major gift is fueled by a donor’s passion for a cause and his or her desire to leave a lasting mark. One should not think in terms of amounts to be raised in the past or basic needs of the nonprofit.
Instead, focus should be on the donor. A major gift is meaningful to the donor both emotionally and in proportion to their assets. Major donors make a deep investment. Keep donors on the inside of an organization. The six rights of effective major donor solicitation are having the right person (1) ask the right donor (2) for the right amount (3) for the right project (4) at the right time (5) and with the right approach (6).
Scott Decksheimer, Sue Lee and Cindy Nuefeld, in their Association of Fundraising Professionals Fundamentals of Fundraising Course, note that LAI stands for Linkage, Ability and Interest (Inclination).
The LAI principle of prospect rating assists in rating prospects, allowing fundraising professionals to direct cultivation and solicitation energies toward those individuals that are most likely to provide funding support.
- Linkage—A contract bridge or access through a peer to the potential donor. What is the relationship of a donor to your organization? How are they linked to your organization? You are trying to find a link to the gift source. A primary factor for linkage is a donor’s past giving history and relationship to the charity.
- Ability—The rater’s perception that the prospect has a gift capability at a certain level; the prospect’s own reception that such a gift capability is a reality. Through research, it can be determined that the potential gift source has enough discretionary holdings to justify a gift solicitation at an appropriate level. The ability rating is based upon their ability to give, not what we think they will give.
- Interest—An understanding of the organization’s mission and accomplishments. The interest of a person in your organization might determine if they could be engaged in the organization. How interested is the prospect in your organization? Is there something connecting them to the organization? If the potential donor has no interest in the charity or little knowledge about its work, then the individual will be prone to make a small gift or none.
A LAI score can be obtained by placing a score to degree of linkage, ability based upon research and degree of interest. The LAI rating is achieved by adding up the scores up to a maximum of 15 points.
Interest or inclination? According to the Helene Brown Group, inclination is the most important element of the ratings scorecard. She suggests using a simple system that is numbered one through seven to rate prospects in your portfolio.
- Our organization is their top philanthropic priority. Strong relationship. May give 100 percent of ask amount.
- Our organization is in their top group of philanthropic priorities. Good relationship. May give 80 percent of ask amount.
- They have shown an interest with further cultivation. Positive attitude. May give 60 percent of ask amount.
- Low interest. Significant cultivation will be necessary. May give 40 percent of ask amount.
- Inclination unknown. Neutral to positive affinity for now. May give 20 percent of ask amount.
- The prospect has no interest in our cause. Zero percent of getting any amount.
- They feel positively toward us, but personal circumstances do not allow a gift currently. Zero percent of getting any amount—for now.
In the article, “3 Strategies to Choose a Research Tool, “the five profile building blocks in obtaining LAI information. Information can be gathered on donors from institutional information—linkage; biographical and contact information—inclination; community involvement information—philanthropic inclination; occupation information—ability; and assets information—ability.
LAI: linkage, ability and interest (inclination) knowledge is critical to one’s fundraising success. Prospect research is the heart and soul of a professional fundraisers ability to succeed with donors. The definition of LAI is sound. That said, my enhanced definition of LAI is L equals Long-Term, A equals Appreciative and I equal Investors.
You want to build such a relationship with your donors that they feel like special investors in your organization. If you provide all the right resources that they need, then they will truly feel appreciated by the organization. They will return the appreciation and will be satisfied that your organization is the right investment for them. Always remember that the process of cultivation and stewardship takes time but will pay huge dividends.
Duke has extensive experience as a nonprofit practitioner, author, lecturer and consultant. He has been a contributing author to NonProfit PRO for the last 11 years. He has been a long-standing member of the Association of Fundraising Professionals where he was previously named the AFP Indiana Chapter Fundraising Executive of the Year and has held the CFRE designation for many years.
He received his doctorate degree from West Virginia University with an emphasis in education administration, master's degree from Marshall University with an emphasis in public administration and a bachelor's degree from West Virginia University with an emphasis in marketing/management. He has also completed post graduate work at the University of Louisville.
He is currently executive director of development for The Salvation Army Indiana Division in Indianapolis, IN plus Adjunct Professor for Olivet Nazarene University. Contact Duke at firstname.lastname@example.org or 317-224-1029.