25 Feb Major Gifts
All nonprofits are interested in boosting their success in fundraising to bring more revenues in for the work that they do. But not enough nonprofits strategize around truly transformational gifts – the type and size of gifts that would enable them to ramp up the fulfillment of their missions in a truly transformative way.
Raising these transformative gifts is the crux of major giving efforts in nonprofit organizations. Erik Daubert, MBA, CFRE, and AFP master trainer led a daylong workshop on annual and major giving for the Greenville Partnership for Philanthropy and Piedmont Chapter of the Association of Fundraising Professionals. More than 100 staff and volunteers from local nonprofits were in attendance.
Erik emphasized that fundraising is not about money. Rather, It’s about connecting people and their values and passions with those of your organization. The wealthiest people who love us – and those who just care about us the most – have the ability to transform the work we do if we can let their light shine through us to the broader community.
Defining a major donor
Answering the question, “Who is a major donor?” is really about determining who these donors now and who might they be in the future. Whomever you define as a major donor now should ideally be moved to a bigger number as your relationship continues, says Erik. “Some of your donors and friends will reach with the organization to aspire to another level of engagement and giving.
One definition of “how to identify major donors in your own organization was to identify the top 10% of your current donors. If a nonprofit can take all of its donors and run them from largest gift to smallest gift in a spreadsheet type program, it can determine its top 10% of donors. Whatever dollar gift is last on the list of 10% is the threshold of a major gift. Donor type does not matter – United Ways, foundations, and corporate sponsorships should all be included in that list. If major givers include only foundations, nonprofits should consider how they can care/feed/steward both the foundation and individual pool to get individuals to stretch. Erik says nonprofits – in these cases – should likely also widen their donor pools to include more individuals and others who might care about the work of the organization. “Why limit your nonprofit to just one type of donor? The more people who love and support the work you do, the more likely you will be able to keep your mission moving into the future,” states Erik.
To illustrate the impact of major gifts on an organization’s bottom line, Erik reported that the Fundraising Effectiveness Project found that 4% of donors give 76% of philanthropy to nonprofit organizations in their study. “Who are your 4% of donors? What percentage of donors are giving what percentage of philanthropy to your nonprofit?” Erik encouraged nonprofits to use free tools at www.afpfep.org to find out their own percentages and understand the power of philanthropy – and its limitations – at their own organizations.
The good news is that if you have fundraising, you already have major gifts! Who are the people who make these gifts? Where do they come from – places, ways, means? How big are they now and how big could they become if you gave them the focus they deserve?
Creating your major gifts case
Unlike an annual giving campaign that has one central case for support, each major donor should be treated as its own campaign and potentially even have its own individual case expression. What excites them about what you do?
Some nonprofits might wonder, “How do I know what excites a donor about our work?” The answer is – ask them! Working with a potential major donor is about building relationships and having meaningful conversations about your nonprofit’s work and their views of it. Erik shared the fundraising adage, “If you want money, ask for advice.” Potential major donors who believe in your work will be happy to share their thoughts on it if you are willing to listen.
But Erik cautioned that if their interests don’t align with yours, don’t you change your mission and work to suit their interests. Every donor isn’t yours. When you are the best you you can be, you will attract other donors to your work.
Nonprofits should develop individualized plans for their largest prospective donors. Who is the best person to ask this person for a gift when they are ready? How will we determine when the prospective donor is ready to give? Do you need or have more time to cultivate their interest in the work you do? How much could they give if they were motivated?
A major gifts program all starts with your “who” – who are your major donors and prospects to move into your major gifts range? Nonprofits should think through Rosso’s concentric circles of constituency (described in our blog on annual giving) to identify new potential major gift donors. Be open and inclusive while brainstorming. Wealth indicators aren’t always Ferraris and Lamborghinis; things such as growth in regular giving or donor age (for example 55 years old with no more college payments and 10 more years until retirement) can point to potential. Have volunteers and staff help. Don’t just ask, “Who can be a major donor?” but also ask questions like, “Who loves us? Who shows up if we need help?”
Then comes the verification of the potential of those prospects. Erik said that there are numerous ways to verify our hunches. Tools such as OpenSecrets.org that show political donations, Salary.com giving salary ranges for the person’s job, Zillow, Facebook, county tax records, and more can provide you with indications of an individual’s giving potential.
As staff accumulate this information, it should be put in donor files to ensure it is captured for the organization. Remember, the fundraiser’s job is to connect the person and their passion to the organization, not to connect the person to the fundraiser. Because of this, it is important that appropriate information is stored in the organization’s files and kept accordingly. Do not put anything in the donor file that you would not want the donor to see, and don’t collect information that isn’t appropriate for the donor or the organization in any way. Ethics are important and Erik emphasized this strongly in his presentation.
Cultivating a major gift ask is critical not just to a successful request but also to preserving the organization’s relationship with the donor. The process is really a matter of taking time to build authentic relationships. Make and take time with key people when they come to visit you. Visit with key donors and prospects when you can during events or your regular programs. Take the time to infuse and create a real culture of philanthropy within your organization and it will reap rewards. One simple example of this is – when giving a tour – make sure to have visual reminders throughout your facilities of the role that philanthropy played in making it happen.
Think about who should be doing the cultivation. You want the most authentic and appropriate person to work with each prospective major donor as much as possible. These individuals can be equipped with cultivation questions such as “tell me about your family” and “how did you first get connected to our organization?” Make sure to take the time to learn and listen when people share information that is important to them. Listening is a skill that is not cultivated enough in our society but if performed properly can allow us to learn a lot about the people who can help us make our world a better place through philanthropy.
At some point, it will be time to present the donor with an opportunity to make a transformational gift. If you aren’t sure if the time is right, you should have a strong enough relationship to ask “when is the right time to ask you for a gift for this campaign?” By asking permission to ask for the gift, prospective donors will often share why they do or do not want to support your efforts – or may just tell you the best time and way to ask them if you listen!
Stewardship and thanks
Erik emphasized that we have to do a better job of saying thank you than we do saying please. Having stewardship plans in place can ensure that this is done well.
Recognition doesn’t have to be a name on a wall. It just needs to be personal and meaningful. Some nonprofits provide thank you gifts to donors, and it can be useful to get these sponsored by a donor so other donors don’t say, “Why are you spending money on this?” (Please note that the IRS has guidelines about what is appropriate financially in terms of thanks.). Erik offered a few ideas for stewardship:
When he goes on a donor call, he takes an addressed envelope and blank notecard so he can fill it out right away. After call, he gets in the car and writes a thank you note and makes notes for donor file. If he has a volunteer with him, he has the volunteer do the same.
Nonprofits can establish a committee of the board or other volunteers to help with donor stewardship throughout the year, from tours to thank you notes to thank you calls. Having board members and other volunteers call donors to your nonprofit has been shown to make donors feel valued and appreciated. These types of calls have been shown to improve fundraising as people feel and understand that their gift really was important and is helping to make a real difference in their community.
Your donor stewardship process is a real and tangible way for you to stand out as a nonprofit. We can all work to prevent donor fatigue by thanking donors and reporting back on how their gifts were used. Once we have done this, donors are likely to be ready to be asked again.
You can better understand how you are stewarding donors (or not) by looking at your organization’s donor retention rates. The Fundraising Effectiveness Project has a number of tools that can help look at things like a nonprofit’s donor retention rate.
If you want to raise seven-figure gifts for your nonprofit, Erik says you have to have an eight-figure vision. Major gifts take time – time to identify prospects, time to build relationships, time to provide proper thanks for and reporting on gifts. But if we want gifts that are truly transformative for our organizations and missions, it is worth transforming our fundraising processes for more impact.