Major gifts are an integral part of any nonprofit’s fundraising strategy. Approximately 88% of nonprofit funds come from just the top 12% of donors. Because these large donations are so impactful for your nonprofit’s strategy, savvy fundraisers are moving in the direction of paying additional attention to major individual gifts.
Not only do these gifts make up such a substantial part of nonprofit fundraising strategies, but a trend in the nonprofit sector shows the level of small to medium gifts is also dropping. This idea adds additional value to your major donation program.
That’s why we’ve put together this guide— to help nonprofits kickstart their major gift strategy. Here at Bloomerang, we’ve helped thousands of nonprofits implement the technology they need to identify, cultivate, and steward major supporters. This article will cover some key aspects of effective major gift programs that we’ve picked up over the years.
- What are Major Gifts?
- How to Find Major Donors
- Major Gift Cultivation
- Create a Major Gift Solicitation Strategy
- Say Thank You to Major Donors
- Access Major Gift Results
- Next Steps to Get Started
You’ve probably gathered thus far that your major donations are the largest gifts made to your organization, but let’s dive into a more specific definition to make sure we’re all on the same page about these key donations.
What are major gifts?
In short, major gifts are the most significant donations nonprofits receive. The exact size of what is considered a “major gift” changes per organization depending on the past average gift sizes and the nonprofit’s size.
While some larger organizations may consider major donations to only be $100,000 or larger, other smaller donations might consider $2,000 to count in this category. Either way, it’s no doubt that major gifts are significant for your organization’s fundraising efforts.
In 2017, $410 billion was given in philanthropy, even as fewer households have participated in these funds’ contributions than ever before. However, about 49% of the gifts are given by just the top one percent of donors, and around 91% of high net worth households actually give to charity. This means there is a lot of potential for your major gifts program and a lot riding on its success.
If that’s not enough to convince you of the importance of major gifts, nothing will.
When it comes to capturing major gifts, your organization should start developing a concrete major gift program with plans to build relationships with your supporters and prospects. And to start that process? You’ll need to find major prospects.
How to Find Major Donors
Major gifts don’t come out of thin air. A major donation will rarely be given to a nonprofit out of the blue without a previous conversation between the donor and the organization. Therefore, one of the best ways to encourage additional major contributions to your organization is by building relationships with supporters and focusing on your donor retention strategies.
So long as you have effective retention strategies, you’ll capture smaller donations made by supporters who can continue giving over time and eventually increase their contributions to major donors.
This means the first place you should go to look for your major donors is your donor database. Your donor database should offer several opportunities and data points that allow you to immediately identify potential major prospects hidden amongst your other supporters.
Generally, donors with a history of giving, high engagement with your organization, and a high generosity score (capacity for donating) will be the best candidates for major gifts.
Too often, nonprofit staff and boards say, “Oh, our organization can’t do major gift fundraising.” Why do they think this? They’ve engaged in major donor cultivation in the past, but tell me no one has been responsive. Or they’ve made major gift asks, but haven’t gotten many gifts.
Usually, the problem here is that these organizations have been trying to engage with lukewarm or cold prospects. This approach completely ignores the fundamental principle of successful fundraising: choosing the right donors. To understand this, let’s consider the identification factors of the best major gift prospects.
We mentioned that the best major prospects will be those with a high engagement and generosity score with your nonprofit. But what does this actually look like?
When you start searching your donor database for potential major donors, you’ll want to look at the three C’s of major prospects: the depth of their connection to you, demonstrated concern they have for your mission, and anything you know about their capacity to give.
Let’s review some of the specific identification factors that you should look for in a compelling prospect in a down-and-dirty hierarchy of importance:
- Donors who gave 90% of your funds over the last 12-24 months
- Donors who high on ‘major gift likelihood’ or ‘planned gift likelihood’ on purchased donor prospecting software
- Donors who’ve made multiple gifts over a year
- Donors who’ve already demonstrated loyalty by giving each year
- Prospects rated highly (based on connection, concern, and capacity) by volunteer-conducted peer screenings
- Board and former board members
- Staff and former staff members
- Committee members
- Beneficiaries (i.e., clients, members, subscribers, students, patients, program attendees, ticket purchasers)
- Families of beneficiaries
Once you’ve identified these prospects within your donor database, it’ll be time for you to prioritize your list and move the top options along the major gifts pipeline. If you found yourself with too many prospects (not a bad problem!), you could tier them with labels for “good,” “better,” and “best” to make the process easier.
On the other hand, if you don’t have enough prospects, you might plan to conduct a treasure hunt to find more options both within and outside your existing records.
Prioritize Potential Prospects
You won’t have time to qualify each prospect in your database. That’s why you’ve made an initial list to work off of. While you care about each of your donor database donors, not everyone needs to end up on this initial list of prospects.
This is why you should use the old Pareto Rule: Put 80% of your resources into the top 20% of prospective donors likely to give you 80% of your funding. Prioritize your list of identified prospects to make sure you’re hitting the right demographic for this top 20%.
One of the first ways you can prioritize your donors is by simply asking the question, “do you want a deeper relationship with the organization?” The donors who answer “yes” will be a great place to start. Then, you can consider other qualifications such as if they’ve made past donations higher than your average gift, if a major donor or board member referred them, or if they’ve otherwise demonstrated a passion for your mission.
If you’re looking inside your donor database for major donor prospects, you might take the following steps to prioritize your supporters:
- Do a wealth overlay to determine which prospects you might want to conduct more research about. Prospect research software like DonorSearch or WealthEngine provide software that will automate analyzing wealth information for each of these prospects. You can also take the DIY approach and analyze Zillow, real estate records, Google searches, and other public records to get an idea of wealth capacity.
- Look at the giving trends within the histories of each supporter. Who is giving year-after-year or multiple times per year? The longer and richer the history of giving with your organization, the higher on your prioritization list these supporters will likely fall.
- Consider your mid-level donors who haven’t changed their giving level in some time. Too many nonprofits either focus all of their attention on acquiring new donors or stewarding their major supporters, so mid-tier supporters often get left in the dust! In reality, many of these supporters could quickly become your next major donor with a bit of extra attention on your part.
- Review your planned giving donors to see if they might be asked for a major gift right now as well. If these individuals have made a provision for your organization in their estate plans, you know they must love your mission!
While you’re most likely to find your major prospects within your database, don’t discount potential acquisitions of new supporters who your organization can cultivate to become your next major donor! You can always go outside your donor database and sit down with board members and stakeholders so see if they have any potential referrals for new donors for your mission.
Qualify Your Prospects
Not every one of your prospects wants to be wined and dined. This is why you should be sure to qualify your prospects, narrowing your list to a manageable level for your major gift program’s cultivation and stewardship steps.
The qualification process is all about getting to know your prospects personally, nurturing them, and getting them to agree to a more personal relationship with your organization leaders.
One of the most effective ways to get to know your donor is with the rule of seven. In most cases, it takes seven tries to get a conversation with a potential donor. If you make an effort, reach out seven times, and your prospect doesn’t ‘bite,’ move on to other donors who might.
These seven steps will likely look something like this:
- Start by sending an introductory letter.
- Follow up with a phone call, thanking them for past engagement and discussing what they love about your mission.
- Leave a message if you don’t reach them.
- Send a follow-up email or letter.
- Send a survey if you don’t hear back.
- Follow up on a different marketing channel.
- Make one last phone call.
You don’t have time or likely the energy to continue chasing every one of your major prospects. Qualifying them is a great way to make sure they’re interested in maintaining a relationship with you and your organization before you launch into the rest of the primary gift cultivation process.
Major Gift Cultivation
You wouldn’t walk up to a random person on the street and ask for $5,000. When you don’t have a good relationship built between you and your supporters, that’s essentially what you would be doing when asking for a major donation. That’s why it’s so important to build strategies that will help you develop relationships with prospects and cultivate these major donors over time.
Cultivation is likened to gardening. You plant a seed, nurture it with water, soil, and fertilizer, oversee its growth and blossoming and, when the time is right, you pluck the fruit from the stem and allow it to spread its seeds to grow new plants.
It’s an apt metaphor because, just like the seeds you plant, not all of your prospects will yield fruit. Some of the candidates, like seeds, will be stick-in-the-muds. They don’t want to be nurtured. They don’t want to grow.
Start the cultivation process by developing a concrete case for support that you can use to explain why you need support. Donors don’t give to your organization; they give to your mission. Explaining why you need their support and how they’ll make an impact is a key element to obtaining gifts.
Start by creating opportunities that allow you to get to know your supporters on an intimate level. For instance, you might decide to host opportunities such as:
- Host intimate and exclusive events, allowing your major gift officer and support staff to mingle and interact with several supporters personally.
- Communicate regularly through email and social media posting. Ensuring a constant presence on these platforms will help you establish your brand, provide mission updates, and show prospects that you’re actively engaging with the community.
- Ask for help and opinions about various strategies at your organization. By showing your prospects and stakeholders that you care about their opinions, you’ll be able to establish a trusting relationship with them better.
- Set up face-to-face meetings during which your supporters can get to know your team members and ask questions about your mission.
- Invite prospects to volunteer so that they can see your mission in action and know exactly how your organization operates and creates the most significant impact possible.
Create a Major Gift Solicitation Strategy
So you’ve started building relationships and cultivating prospects. But cultivate by definition means that you’re leading up to something— and that something is a solicitation. You’re leading up to making the ask for a major contribution.
But if you were to do this without a plan, it’s likely to be a disaster. That’s why you need a specific strategy for how you’ll approach the solicitation process before you dive into the actual ask. There are two primary parts of this strategy that you should keep in mind: the meeting setting and the actual language you use to ask for a donation.
The Meeting Setting
While you might currently be using virtual meeting software that you use as a part of your work-from-home toolkit to make these meetings possible, this won’t always be the case. Because virtual meetings won’t disappear entirely after the COVID-19 pandemic, you may consider asking donors if they have a preference as to whether they’d instead meet virtually or in person.
Virtual meetings are convenient for many individuals with tight schedules, also allowing organizations to reach further geographically. However, they leave something to be desired as they don’t allow for the same personal interaction level with supporters as the in-person counterpart.
When you schedule meetings with prospective major donors, make sure the space you choose provides an intimate conversation environment.
It’s ideal for these meetings to occur in quiet spaces such as a home or office rather than a public setting, allowing for additional privacy and fewer distractions for both parties.
Who should attend the meeting? Generally, it’s best to keep the numbers small. You don’t want your prospect to feel as though they’re being ganged up on by your team. Your executive director, major gift officer, or another team member with whom they’ve developed a relationship is the best choice to show the meeting’s importance and personal nature.
Language to Ask for a Major Gift
Many fundraising professionals feel uncomfortable or awkward when asking for major gifts from their prospects. But there is no need for this discomfort. Chances are, your major prospects understand that you’re going to make the ask and have predicted the purpose of your meeting. Therefore, the critical part of the meeting is simply ensuring that you ask the right way.
The first step to asking for a major gift is to show appreciation for past contributions simply. As we said before, it’s not likely that this person is brand new to your organization and your mission. They’ve gotten involved in several other ways, whether through donations, volunteer work, or event attendance. Tell them about the impact they’ve made and how much you appreciate their support.
Then, when you get to the actual asking portion, you should frame the ask as a “consideration” and provide a specific amount. For instance, you might say something like,
“Would you consider contributing a gift in the range of $5,000 for the Save-the-Farm program?
You should also be sure to include the specific program that would benefit from the gift. In the example above, that would be the Save-the-Farm program.
Say Thank You to Major Donors
While many fundraisers consider the solicitation to be the most challenging and essential aspect of major gift fundraising, they’re incorrect. One significant donation can help you in the present, but the promise of future major gifts is one of your strategy’s greatest strengths because it strengthens your program as a whole.
That’s why stewardship is such a vital part of major gift fundraising.
Stewardship starts with two simple words: “thank you.” Show your appreciation for everything your major donors do for your organization. This helps cement the relationship you’ve built with them and encourages future involvement with your organization. Plus, it’s simply polite.
Because your major donors are such a big deal, your signs of appreciation should also be a big deal. For instance, you might decide to implement the following strategies as a part of your donor appreciation plan:
- Donor recognition wall. Donor recognition walls provide a visual sign of appreciation for your major supporters. With their permission, you can add their name to a physical or virtual board that signifies their support for your organization to the rest of the community.
- Phone calls. Bloomerang recommends not only calling your major donors but calling all of your donors. It’s a great stewardship opportunity to build relationships with all supporters, but you should vary the script based on the type of donor you’re calling. For instance, you might say a simple “thank you” to new donors, but you may ask for opinions and input about strategic plans from your major contributors.
- Exclusive events. Invite your major donors to exclusive events where they can mingle with one another and with your team members. This allows you to say a collective “thank you” to your supporters while also continuing to develop relationships. Be sure not to ask for additional money during these events to show them that you’re really appreciative and don’t have an agenda.
- Handwritten letters. It’s often easy to send an email. We can send one in five minutes or less and give very little thought to it. However, handwritten letters are a much more personal way to show your appreciation for supporters. Ask your major gift officer or executive director to write and sign these letters personally.
Ideally, your nonprofit will apply multiple of these strategies to show appreciation. Be sure to time out each of your chosen strategies so that they’re spaced out over time. Eventually, you’ll be able to ask for another major donation from these supporters.
Assess Major Gift Results
Once you’ve set up a major gift program for your organization, you should be sure to assess the results to determine how well the program works and identify opportunities for improvement. When you set up the program, be sure you also have a report template pre-set in your CRM to measure your program’s essential impacts.
This report should list out metrics such as:
- Program ROI
- Retention rate
- Number of gifts secured
- Average donation size
- Average giving capacity
- Number of asks
When you review these metrics, you can likely identify opportunities to continue improving your major gift program. For example, if your retention rate for your major gift program is low, you might consider revamping and adding onto the stewardship and appreciation program for your major donors.
You should also see specific trends in these numbers over time. For instance, your average donation size and giving capacity will likely increase as your nonprofit grows. If it doesn’t, then you should probably consider conducting additional prospect research or increasing your ask amounts.
Simply building a program isn’t enough. Your nonprofit needs to track the program results and analyze the impact that it’s had on your fundraising as a whole. Only then can you find opportunities to continue improving and identify your strong suits.
Next Steps to Get Started with Major Gifts
Major gifts are an essential part of your nonprofit’s fundraising strategy. The statistics show this importance, and building a program is the first step to success.
To conclude the piece, we want to provide you with a list of the next steps to take to start building your major gift program. We suggest taking the following steps:
- Discuss a major gifts program with your nonprofit’s leadership. Make a case for starting the program and make sure everyone is on the same page about its importance.
- Recruit your major gift officer either internally or externally at the organization to have a dedicated leader of the program itself.
- Define what major gifts look like for your organization. Do the calculations to see where the top 20% of your donations come from, and identify the amount that is considered “major.”
- Determine major prospects with the capacity to give in the range identified. Look first at your donor database, then start doing prospect research in the community.
- Create a cultivation strategy with your major gift officer to start building relationships with your prospects interested in developing a relationship with your organization.
- Build a solicitation strategy to guide the conversation for each of your prospects. Then, schedule meetings with them to make the asks.
- Steward your donors after they’ve contributed to your organization to continue building relationships with them and to set yourself up for future donations.
- Assess the results of your major gift program and look for opportunities to improve and build even stronger relationships.
If you don’t feel completely ready to get started, no worries! Conduct some additional research (try some of the articles below!) on the subject of major gifts and your fundraising efforts to be sure you’re ready to move forward with this incredible initiative.
- The Ultimate Guide to Nonprofit Strategic Planning. Learn more about how major gifts will fit into your nonprofit’s large-scale strategic and development plans.
- Nonprofit CRM: The Buyer’s Guide + Solutions for Success. Major donor relationships are built on data and your CRM is where you store this information. Check out this buyer’s guide.
- Buying Fundraising Software: 6 Important Factors to Consider. Software will help you raise funds at all levels. Make sure you have the best solutions to back up your strategy.