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?
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.
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
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:
A. IdentificationYou 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
- 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?