The Loyalty Index

Most higher education advancement shops use some form of CRM (Customer Relationship Management) system. CRM systems specially designed for fundraising usually have ranking or prediction functions to help prioritize gift officers’ prospects. Often these ranking functions focus on wealth screening, looking primarily at a prospect’s perceived ability to make a current gift. Planned giving departments aren’t so concerned about a prospect’s ability to write a large check right now as they are about a prospect’s propensity to give in the future.

The Loyalty Index Methodology is a framework used in planned giving to identify high-potential bequest donors who may have low current giving capacity, shifting the focus from current wealth to historical dedication and future capacity.

It operates on the principle that past behavior is the best predictor of future commitment, and that long-term loyalty often translates into inclusion in a donor’s final legacy, especially among middle-to-upper-middle-class donors who hold most of their wealth in illiquid assets (homes, retirement accounts, trusts).

Here is a step-by-step outline of the methodology:

📊 Phase 1: Data Scoring and Segmentation

The goal is to calculate a Loyalty Score for every consistent, non-Major Gift level donor in the database:

Factor	Description	Weighting / Score
Years of Giving Consistency	The total number of consecutive years the donor has given any amount. This is the primary driver.	High: 20 points per consecutive year.
Frequency (Recurrence)	The donor’s primary giving mechanism (e.g., monthly/recurring, annual check, intermittent).	Medium-High: 20 points for monthly/recurring, 10 points for annual.
Engagement	Participation in non-financial activities (e.g., event attendance, volunteer hours, survey responses).	Medium: 10 points per activity type.
Source/Affinity	Giving to a specialized or “passion” area (e.g., NPR station, specific scholarship, campus library).	Medium: 10 points for a targeted/restricted gift.
Total Lifetime Giving	The actual dollar amount given. While secondary, it is a tie-breaker.	Low: 1 point per $1,000 (capped at a defined amount, e.g., $50,000).

Years of consistent giving is the gold standard in the Loyalty Index. It signifies a deep commitment to whatever the donor gives. It means that this particular donor is invested, both emotionally and financially, to that area.

Calculating the Index

All factors are scored and summed to create a numerical Loyalty Index. Donors are then ranked based on this score, regardless of their current wealth screening results.

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🧭 Phase 2: Prospect Prioritization and Review

This phase isolates the high-potential prospects who have been historically neglected by the Major Gifts team.

1. Filtering for “Hidden Wealth”: Create a filtered list of donors who meet two key criteria:
   • High Loyalty Score: Top 10% of the calculated Loyalty Index.
   • Low-Capacity Rating: Currently rated as below the threshold for major gifts (e.g., under $25,000). These are the diamonds in the rough often overlooked by MGOs whose focus is on current capacity to make a major gift.
2. Assignment: This curated list of high-loyalty/low-capacity prospects is then assigned to the Planned Giving Consultant/Director.
3. Cross-Reference: Review the addresses, professions, and affiliations of the top prospects to look for indicators of future liquidity (e.g., they are in a profession often associated with pensions or complex retirement plans; they live in a stable, high-value neighborhood; they are unmarried or without children).

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🗣️ Phase 3: Cultivation and Stewardship

The strategy shifts from asking for a cash gift to cultivating a legacy conversation.

Strategy	Action	The “Advisor Advantage”
Personalized Stewardship	Initiate contact not to ask for money, but to thank them for their consistent, long-term belief in the mission. Acknowledge their many years of dedication.	Build trust and credibility as an advisor, not just a fundraiser.
The Pivot Question	Move the conversation from their checking account to their values and legacy. Example: “How do you want to ensure the radio station you love is still here for future generations?”	Be prepared to discuss complex giving vehicles (Trusts, CGAs) with the technical confidence of an attorney, removing the donor’s anxiety about complexity.
The “Soft Ask”	Present generalized materials about estate planning, making it clear the University can be named as a beneficiary via an IRA designation, a will or a trust. Never ask for a specific amount.	Ensure all discussions emphasize that the donor should consult their own legal and tax advisors, mitigating the University’s liability.

The Loyalty Index is a tool for pipeline diversification. It ensures that the development office balances its short-term need for cash with its long-term need for endowment-building assets.

I have had good success using a simplified version of the Loyalty Index by contacting donors with a long history of giving. One such couple, who had given over $27,000 in monthly automatic deductions, ended up creating a half-million dollar planned gift.