While we discussed the high-level overview of 5 Steps to Building a Major Gifts Program previously, there are also more detailed nuances about how to acquire major gift donors. Let’s delve into the minutiae of how to build a strong strategy towards building your donor base for a successful major gifts program.
The End Goal is the Starting Point
Like all successful fundraising campaigns, major gift programs must begin with a clearly defined goal. Why is setting a fundraising goal absolutely essential, when you are just starting out on a major gifts journey? One analogy to understand why it’s important is to view your goals as the final destination on a long road trip. The non-profit fundraising strategy is the map to get there in an expected time. Without written financial goals, it’s difficult to grow year-to-year and to stay on track when your committee discusses progress. In addition to that, the success of your organization depends on the funds raised from these efforts. Not knowing the concrete number your organization must raise is setting your organization up to fail. So let’s discuss the best strategy to define your fundraising goals.
Establishing Donation Tiers
While the relationship with your organization and charitable cause will be a large part of the reason why a sponsor considers giving a major gift, incentives help seal the support. Major donors like to be recognized for their generosity, so establishing gifting tiers is important to provide that visibility. These giving tiers work into the blueprint of who to target as your prospects. For example, having the highest tier of $50,000, with the benefits and rewards include naming a program for one semester after the benefactor and a speaking part at the charity gala. At the lower end of the major gifts program may be $10,000, where the benefits and rewards include naming a table at the gala and using a logo for a step-and-repeat banner at the gala. Once the major gift donation tiers have been established, then comes the planning.
Understanding Major Gift Donation Behavior
Before planning how many donors are needed for each tier to achieve the final fundraising goal, we must understand how they play in the overall fundraising goal of the organization. There is an inverse relationship between the number of donors and the range of funds that they donate. Most organizations have a much larger donor base that makeup non-major gift donations (such as, if your non-major gift threshold is $25,000, it’s normal to have upwards of 60% of your donor base to make up this type of donor). However, because their donations are incrementally less, it’s normal that their donations makeup 20-50% of your total organization’s fundraising goal.
If you have past financial data from prior years, this data can be greatly helpful to plan for your major gifts strategy and to understand the above behavior. As an example to understand what we mean that your smallest donations come in greater numbers, let’s say this is what your donor base looks like from the prior year:
This proportional behavior is a very normal expectation for many non-profit organizations. The number of donors themselves will vary based on the size of the organization or establishment. A young grassroots effort will probably look closer to these numbers, whereas a well-established university will probably have a larger donor base.
When we look at the actual dollar amount of how each tier builds up to the entire picture of the fundraising goal, we can see how vital it is to establish a definitive goal.
|Major Gift Donor Tier||Number of Donors|
Further breaking down the major gift donor base, we can build a goal within the types major gift donor tiers with more precision.
Understanding the data on the prior year’s performance can help bring some of the following discussions to light:
- Actual Major Gift Donors vs. Prospects: The number of actual major gift donors is 16, but how many initial prospects did the committee begin with to successfully receive these 16? The success rate can help plan for how many prospects need to be approached with an ask. Another discussion should also include understanding what tactics, sources of prospects and strategies worked.
- Returning Prospects vs. New Prospects: How many are repeat donors? How many introductions can be requested? How many new prospects are needed?
- Major Gift Fundraising Target: Each year’s fundraising target should increase to show progression and improvement of strategy and tactics, as well as demonstrate the strength of donor loyalty.
Understanding Dynamics of the Ask
Understanding the dynamics of an ask, then practicing it with your committee members is what continues to improve our non-profit’s major gift strategy. Practice makes perfect,as the saying goes.
Remember, it’s always best to have the committee or chair member that has the closest relationship with the prospect do the ask. Here are some aspects that should be discussed in the ask, considering that some can be overlooked based on how much the prospect already knows:
Educating The Donor About the Organization
- What is the organization about?
- How has the organization affected/helped you and why do you dedicate your time, money and effort to help them?
- The new developments or ongoing programs/activities.
The overall major gift fundraising goal to support the organization’s developments, programs or activities.
The Relationship Between the Donor and Organization
- Why did you specifically choose to speak with them?
- Reflecting on your relationship with them, if any.
- The Benefits and Rewards for Donation
Reinforcing a Certain Deadline
- Does a certain program launch a certain date?
- Are there resources lacking that prevent developments?
- Is there an event planned that needs funds before a certain event milestone?
Handling the Outcome
- Prepare to receive a donation or
- Follow up with face-to-face repetition
Understand the Possible Outcomes (Other Than the Perfect Yes!)
With the previous section touching lightly upon the idea of a prospect converting into a donor, we understand that the world isn’t perfect and that not all prospects will want to donate. Here are some expected outcomes to consider:
- A Decline to Donate: The “no” is inevitable, and it’s OK because it can mean “not right now.” There are several reasons why a prospect may not want to donate. One reason would be that the prospect currently doesn’t understand the cause enough or may not be financially available at this current time to donate. In this case, not all is lost. Continue finding ways to have the prospect engaged with your organization in other ways. This may be in the form of volunteering, participating in an event, networking with other committee members in an informal setting or otherwise.
- Agree to Donate but Not Right Now: Oftentimes, prospects don’t donate at the drop of a dime during the ask. Always plan ahead with a reasonable follow-up or the next time that you’ll be speaking or meeting with the prospect to touch base. Keep them engaged with the organization, as well, if possible. Consistent follow-up is the key with many prospects becoming a donor.
- Agree to Donate but Lesser Than Expected: Another reasonable outcome is not getting what was originally expected or desired. Account for this shortfall when planning your major gift program strategy.
Developing a Long-Term Loyal Supporter
Once you have won a major gift, it’s vital that you don’t take the major gift donor for granted. Keep major gift donors continuously engaged and up-to-date with the developments of the organization that were possible because of their support.
- Track Their Donation Activity: As we’ve recommended before, track major gift donor activity in a robust nonprofit CRM software. Always being aware of major gift donations and finding ways to reward donors throughout the year will leave a positive impression.
- Focus on Donor Retention: Always build upon the rewards and benefits for the major gifts donation program. Plan special events for donors and always hand write your thank you letters to them. Here are other great tips on the art of donor retention.
- Request Introductions: Once a solid relationship and deep trust has been created with your major gift donor, initiate the topic of being introduced to other prospective major gift donors. Always continue building the prospect list, as a pre-existing relationship and a positive reputation about your organization can be one of the lifelines to continually grow your major gift donor base.