It simply makes sense to follow the money.
Where is it? Let’s begin with that elephant-shaped piñata in the middle of the room. It’s filled with 80% of all philanthropy. You’ve got to figure out how to get the goodies out of it or you’ll just be scrambling for spare change.
The most recent data from Giving USA shows 72% of gifts come from living individuals and an additional 8% from bequests. That’s 80% of all giving coming from people! Not foundations. Not businesses. Not government.
And major gifts is where the real money is. 2/3’s of all household charity in the U.S. comes from the top 3% of U.S. households.
This is your elephant.
How do you get inside?
Any organization, large or small, can do this. You just need to know the secrets to success.
10 Secrets to Major Gift Fundraising Success
Plan the Work (Part 1)
- Your Major Gift Amount
- The Right Prospects for You
- The Best Case for Support for this Campaign
- A Gift Chart Tied to Your Fundraising Goal
- A Cultivation Plan for Each Prospect
Work the Plan (Part 2)
- The Right Solicitor(s)
- The Right Decision-maker(s)
- The Prepared Solicitor(s)
- Honest Assessment of What Success Will Look Like for Your Organization
- Honest Assessment of What Success Will Look Like for Your Donor
I’m going to review these in two parts. Today, we’re going to cover the behind-the-scenes essentials. Just like anything else, without a plan you’ll spin your wheels. You might work hard, but you won’t work smart.
1. Your Major Gift Amount
You can’t begin without defining what a “major gift” is for your organization (for some it’s $250; for others it’s $1K, $10K, $100K or more). The bottom line is there is no single definition of what constitutes a major gift. Not only does the definition of a major gift vary from organization to organization; it also varies within the same organization over time.
For years many organizations used $1,000 as their benchmark. What’s strange about this is it was true when I began in fundraising 35 years ago, and it’s still true today! You’d think there would have been at least a teensy bit of inflation, no? Why does this matter? It matters because if your major donors are getting away with giving you $1,000 when they could/should be giving you $10,000 or even $100,000 (and you’re praising them to high heaven) then you’re leaving money on the table. And you simply may not be raising enough to fulfill your mission.
ACTION TIP: Figure out a reasonable major gift target based on your own history. Don’t just copy other organizations. The easiest place to begin is to review your donor records to identify the top 10% of your annual individual donors over the past 24 months. Then find their average and median gifts. See what patterns develop, and how many donors are giving above these levels. You may not have enough donors at this level, in which case you might begin by looking at anyone who makes a gift higher than your average gift.
SECRET: The goal, ultimately, is to put your energy into those folks who give you 80 – 90% of your budget. Generally, roughly 10-20% of your supporters will account for 80-90% of all your contribution income. According to one Network for Good study, on average 88% of dollars raised comes from 12% of donors. So focus your energies on those folks where you’ll get the biggest bang for your buck.
2. The Right Prospects
Once you’ve got your number, then you need three things [LIA] to make someone a viable candidate: (1) linkage to your cause (e.g., they’ve given before; they’ve been a client or patron; they know one of your board members, etc.); (2) interest in your cause, and (3) ability to give.
ACTION TIP: Don’t just start with the rich folks in your community. If I had a nickel for how many times I’ve sat in a campaign screening session and folks in the room have named the wealthiest person in the community as the “go to “ prospect, I’d be a wealthy woman. Seriously! Just because someone has capacity doesn’t mean they’re interested in your cause, or even that they’re philanthropic. Similarly, just because they’re passionate about your mission doesn’t mean they have the resources to make a major gift.
ACTION TIP: Begin with your “insiders” – current and past board; current major donors; staff; volunteers; members; service users; close friends of insiders. Who is currently giving at or near your major gift amount? Could they give more? You may not know now, but that’s what you’re screening for. What you do know is they have linkage and more than a passing interest. Two out of three ain’t a bad place to start.
ACTION TIP: Move on to others who have at least two of LIA. Begin to “qualify” these folks using (1) research, and (2) reaching out to see if they respond to relationship-building moves. Getting major gifts relies on building relationships, but only about 1/3 of your initial list of MG prospects will be interested in building a relationship with you. If they’re not going to “play,” putting them in your MG portfolio will waste your time.
SECRET: Your prospect list will account for 80% of your success with major gifts fundraising. So it pays to spend time building and honing this list.
3. The Best Case for Support for this Campaign
Will your prospect readily understand why you’re asking? The prospect must feel their gift is essential.in order to create a valued outcome. Something they care about as much as you do. Remember, major gifts is not about “money.” It’s about outcomes. Making something happen that otherwise wouldn’t. Don’t just say “Last year you gave $500. Will you give $1,000 this year?”
The best case for support incorporates storytelling.
- Share the need (“Once upon a time…”);
- Show how you address need (“these bad things happened, and this was what was done to improve the situation… then more bad things happened…conflict/band-aid; conflict/band-aid… bringing you to today);
- Show how donor can create a happy ending.
Your story should demonstrate what would happen if your nonprofit ceased to exist. Or if the program for which you’re seeking funding doesn’t come to fruition. If your prospect feels you’re simply asking for “money” they cannot make a passionate, values-based gift.
ACTION TIP: The prospect must feel the amount you’re asking is the right amount. There’s a concept in Judaism known as t’rumah. Loosely translated, it means “a gift from the heart that’s enough to get the job done.” It comes from the story of the delivery of the Ten Commandments. Beforehand, Moses came to the people and asked them to donate to build an ark worthy of receiving such a gift. They were told precisely what was needed. Nothing more. Nothing less. What was needed was “enough” to get the job done. Your donor wants to know what will be enough. What will your entire project cost? Then they can figure out where they fit within the scope of the impact you want to make possible.
SECRET: Your case for support should be specific and outcome oriented. Because “we want as much $$ as we can possibly raise” is not inspiring. Who doesn’t? But why should your donor give to you (as opposed to someone else), and why should they give this amount?
4. A Gift Chart Tied to Your Fundraising Goal
Most organizations simply do not have a large enough donor base (or mailing list) to be sustainable without major gifts. So it pays to figure out precisely how you can get to your goal. A formal gift chart, (which you can use for an annual as well as a more formal capital campaign) outlines at the outset how many donors you’ll need, and at what levels, to reach your goal.
If you have a $500K annual giving goal chances are good you’re not going to get there with 50,000 $10 donors. You’ve probably heard of the Pareto Principle (aka the Rule of 80/20) as it applies to fundraising. It states that 80% of your fundraising will come from 20% of your donors. These days, I find it to be closer to 90/10. In some cases it can be as much as 97/3.
ACTION TIP: It’s not a bad idea to share your gift chart with your major donor prospects regardless of whether you’re in a capital campaign. Annual campaign donors also like to know where they stand. And your board members should understand this as well. They’re your leaders. If they aren’t leading, how can you expect others to give passionately? If you need board members to give $1,000 gifts, and they’re giving $100 gifts, you’re dead in the water. Nothing demonstrates this quite as simply and clearly as a gift chart.
SECRET: A serious successful major gift fundraising program has goals and prospects to meet those goals. Simply asking random people for big bucks is not a major gifts strategy. It’s a shot in the dark. The fundamental reason you need to have this gift chart is the same as the reason you need to have any type of plan. Or to paraphrase Lewis Carroll, “If you don’t know where you’re going, you’ll very likely get there.”
5. A Cultivation Plan for Each Prospect
Your next step is to move your prospect down the road through a series of “donor experiences” that engage their passions and get them primed to make an investment. The Paul Masson wine brand had a great 1970s marketing campaign that said: “We will sell no wine before its time.” Ask no donor before their time! You’ll know when they’re ready if you’ve created a personalized “moves management” plan for each individual in your major donor portfolio.
ACTION TIP: I adhere to the “Goldilocks Model.” You’ll know your donor’s time has come only if you’ve been getting to know them through a planned series of cultivation “moves.” People generally move along a continuum, from interest… to awareness… to engagement… to investment.
- Your prospect won’t be ready if you’ve done too little. If someone has an interest in a cause similar to yours, but knows nothing about you, it’s a bit too soon to ask. Would you take a first date on an overnight to a ski lodge? Enough said.
- But folks can get to the investment stage fairly quickly, especially if they already have strong connections to you, so you don’t want to do too much.
- That’s where many nonprofits go awry. They have a hard time mastering just right They cultivate, and cultivate and cultivate… and never get to the ask. This is something you want to avoid at all costs. It’s a waste of your time, and it’s very confusing to your prospects. At some point, they expect to be asked.
SECRET: Put in place a just right plan. Monitor it. Don’t get prospect “A” right up to the threshold; then ignore them and move on to prospect “B.” When you’ve made all the “moves” you planned, it’s time for the ask.
You’re not quite ready to shake that piñata. Not yet. But you’re getting close! In Part 2 we’ll look at the final five secrets you need to make your major gifts program a success,
Want to Attend Major Gifts Fundraising Wizard School?
Whether you’re new to major gifts or a seasoned pro, I invite you to join me for my 8-week online course: Winning Major Gift Fundraising Strategies.
If you’re serious about fundraising, you’ve got to get serious about investing in major gifts. This is true no matter your size. There’s no more cost-effective fundraising strategy. It’s a struggle to figure out how to do it on your own, and it wastes time. Enroll yourself and your team (up to six people per organization)
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