Special thanks to our guest blogger Ryan Woroniecki. If you haven’t checked out DonorSearch and their amazing services, you must!
Major gifts are very important to a nonprofit’s ongoing success and, as such, deserve careful attention and planning.
In this article, we’ll take you step-by-step through everything you need to know about major gift fundraising:
- What are major gifts?
- Who can seek major gifts?
- Why are major gifts important?
- How do you plan major gift fundraising?
- When should you seek major gifts?
After reading through this guide, you’ll be armed with all the necessary knowledge and tools to get out there and do some serious major gift fundraising!
1. What are major gifts?
Generally speaking, major gifts (1) are among the biggest contributions a nonprofit receives. A single major gift can completely change your organization’s fundraising outlook.
Major gifts is that they have no fixed amount or universal definition. After all, what qualifies as major is going to vary drastically between a small, up-and-coming nonprofit and an established, national organization!
So how do you figure out what counts as a major gift for your nonprofit?
The best way is as follows:
- Find records of the ten or so donors who have made the largest contributions to your organization in your nonprofit’s CRM software.
- Analyze their gift amounts and put them in order from highest to lowest.
- Remove any gifts that don’t fit within the average range, such as a gift that is substantially larger or smaller than the rest of the group.
- Once you have whittled your list of ten to a smaller group of donations that are fairly similar in size, make an educated guess about the major gift minimum you want to set.
- Take the dollar amount you’ve selected and compare it to the other gifts you have logged in your database.
- Decide if that gift minimum is the right number by considering your current donor pool and seeing how many gifts you’ve received of equal or greater value.
Obviously, this isn’t an exact science. You’ll have to fine-tune your strategy over time, but it should be a good starting point to help determine what should count as a major gift for your organization.
Once you figure out what constitutes a major gift for your nonprofit, you can begin putting a plan in place to solicit more.
The bottom line: Major gifts are a huge source of funds for your organization, and figuring out what counts as a major gift is the first step towards generating a comprehensive major gift fundraising plan.
2. Who can seek major gifts?
The short answer is any fundraising organization!
Studies have shown that, on average, over 88% of all funds raised for an organization come from just 12% of donors. That 12% constitutes the donations from your major gift contributors. In other words, major gifts are simply too valuable to let pass by — so any nonprofit or other fundraising institution, like a university, can and should seek major gifts.
Examples of organizations that should pursue major gift fundraising activities include:
- Institutions of higher education
- Greek organizations
- K-12 private and independent schools
- Healthcare organizations
- Arts and culture organizations
- Social service organizations
- Faith-based organizations
- Community foundations
- Advocacy groups
- Environmental groups
It’s not uncommon to hear smaller nonprofits without major giving programs say, “We’re too small to seek these kinds of gifts. We don’t have the capacity to do so at this time.”
While it is true that running a top-tier, incredibly advanced major giving program requires a serious commitment of time and resources, it’s also true that not every program has to be as developed.
It’s even truer that every program has to start somewhere, and you need to learn to walk before you can run.
Essentially, every organization serves to benefit from setting ambitious fundraising goals(2) and beginning the hunt for major gifts.
Even if your program starts off small and doesn’t have an immense operating capacity, that’s okay. In fact, if you can expand your program over time, its growth will spur your organization’s growth and vice versa.
The bottom line: If you are part of a fundraising organization, you can (and should!) start major gift fundraising activities to help advance your organization.
3. Why are major gifts important?
The “why” of major giving should be pretty obvious.
If you want to see your organization grow to new heights, major gifts need to be part of the equation.
As was stated earlier, major gifts are the top tier of gifts your organization will bring in. As such, once your program is up and running, the major gifts you solicit will account for a large percentage of your fundraising total.
In fact, for most mature nonprofits, major gifts will make up 80-90% of your organization’s fundraising totals.
When you look at it like that, it’s hard to deny the immense value.
The bottom line: Major gifts are a huge source of funds for any nonprofit and as a result must be included in your fundraising plans.
4. How do you plan major gift fundraising?
There are plenty of ways to go about securing major gifts for your organization, and that process should start with appointing a leader to take charge. Most nonprofits hire a major gift officer or fundraising consultant(3), but don’t worry if that option is out of your budget.
Primarily, you just need someone to run point. A major giving program takes a team effort, but every good team needs a leader.
So, appoint one!
Once you have a major gift officer to pave your path to better fundraising, your nonprofit is going to want to think through how it plans to handle the four main stages of the major donor experience.
Let’s discuss those one at a time:
You can’t ask for major gifts if you can’t find any major gift donors! That’s where you’ll need to take advantage of wealth screening and prospect research tools(4).
Through analysis, your team can uncover such pertinent details about your prospects as:
- Past charitable giving
- Other involvement in nonprofit work
- Political giving
- Real estate ownership
- Stock ownership
- Contact information
This background information is going to help you consider the two main questions that determine whether or not someone is a good major giving candidate:
- Does this person have the philanthropic history to indicate that he would be open to making a large contribution to our organization?
- Does this person have the financial capacity to follow through with such a gift?
Once you’ve found prospects who meet those qualifications, it’s time to move on to cultivation!
Major donor cultivation is basically a period of time during which your team members spend time building a relationship with your prospect.
Cultivation is going to vary from donor to donor and organization to organization, but the bottom line is that it is an incredibly valuable time.
During cultivation, your organization should be actively working to increase the likelihood that your prospect will say yes to your donation request(5) when you get to the solicitation stage.
Think of the goals of cultivation like two sides of the same coin.
On one side, you’re trying to learn as much as you can about your prospect so that you can design the most well-informed solicitation strategy possible.
On the other side, you’re hoping to teach the donor as much as you can about your nonprofit and the work their money will help accomplish so that they’re more inclined to donate when the time comes.
Aim to strike a balance between the coin’s two sides.
Solicitation(6) can be nerve-wracking and stressful, but the more prepared you are, the more relaxed your team can be.
Before you go into any solicitation meeting, you’ll want to be prepared with a plan that includes an outline of how you want the conversation to go, a specific ask amount, and next steps.
It’s also always a good idea to practice your ask first on peers or coworkers. After all, practice makes perfect. Plus, an outside perspective can help you identify any areas of weakness in order to craft the perfect gift request.
Once the donor has actually made the donation, the relationship shouldn’t stop there!
Follow up with an acknowledgement, then funnel the donor along a path of other engagement opportunities.
Retained major donors are incredibly valuable(7). You put in a lot of time to secure that first gift — make sure that it’s the first of many with proper stewardship.
The bottom line: Plan out your major gift fundraising by first appointing someone to take the lead. Then, put a plan in place for how you are going to identify, cultivate, solicit, and steward your major gift donors.
5. When should you seek major gifts?
Whether you decide to include major giving requests in your year-end fundraising goals(8) or whether you choose to seek them in conjunction with other campaigns, the short answer is that you can seek major gifts at any time of the year.
Major giving is not directly connected to one giving season or day — as long as you’ve put in the right amount of time and resources into identification and solicitation of donors, you’re free to make the ask whenever you’d like.
The “when” that we’re going to focus on here is more personalized. Although there is no ideal time universally, there is an ideal time for each individual prospect.
Study up on your prospect’s giving history and look for patterns to figure out when you should ask them for a gift.
For instance, if a prospect usually gives once a year in November, design your ask strategy around making the appeal in November.
Your nonprofit’s CRM software(9) is indispensable here. You’ve taken the time to collect a ton of donor information — use it to your advantage and let it inform your solicitation approaches!
Those small details might not seem like much on their own, but in the grand scheme of things, they add up. Taking the time to personalize your ask demonstrates that you care about your donors, and as a result makes it much more likely that they will decide to give.
The bottom line: Examine your prospects’ giving histories to determine when the best time to ask for major gifts is for each individual. They’ll be much more likely to respond favorably!
There you have it! Hopefully you now have a better understanding of the ins and outs of major gift fundraising. Now get out there and start securing those major gifts!
Ryan Woroniecki is the Vice President of Strategic Partnerships at DonorSearch, a prospect research, screening, and analytics company that focuses on proven philanthropy. He has worked with hundreds of nonprofits and is a member of APRA-MD. When he isn’t working, he is an avid kickball player.