For nonprofits, major gift fundraising produces gifts that range in size from $1,000-$100,000 depending on the relative size of an organization’s budget and the sophistication of its fundraising operation. While foundations and corporations may make gifts of these sizes, what motivates individuals to make major gifts looks different than corporate or foundation giving. When I talk about the need to strengthen an organization’s major gift fundraising, it’s really about learning how to raise larger, sometimes multi-year commitments from individuals. While many nonprofits are adept at handling a couple of mailings or electronic appeals and perhaps their yearly gala each year, major gift fundraising seems somehow much more daunting, mysterious and tough to manage. Even so, there are some relatively simple tools that can be put in place to start or strengthen major gift work in any size nonprofit.
Looking at the overall trends in philanthropy, it becomes very clear why nonprofits should invest in strengthening their major gift infrastructure to raise more from individuals. Giving USA is the gold standard of data on charitable giving in the United States. According to the most recent press release from June of 2015 reviewing 2014 data, Americans gave $358.38 billion to charity in 2014. Of that total, gifts from individuals comprised 80% of the giving (72% from living individuals, 8% from bequests). Foundations accounted for the remaining 15% while corporations accounted for 5%. The highlights of Giving USA are available for free and have a ton of useful about giving trend data in various sectors for those who want to go deeper.
Looking at these numbers, it’s clear that individuals are the greatest source of philanthropic capital, but how can small nonprofits without an army of major gift officers tap into this huge but fractured source of funding? To start, I would argue that it’s all about relationships, infrastructure, discipline, the right tools, and a clear plan to focus on your top 25-50 prospects.
In the Giving USA press release mentioned above, W. Keith Curtis, chair of the Giving USA Foundation points out:
“The 2014 growth among eight out of nine types of charitable organizations is good news for the philanthropic sector as a whole. The growth can be attributed, in part, to the ways charities have been working smarter during daunting times. Nonprofits increasingly are making sure they have strong cases for support, communicate frequently with donors and provide proof of the impact charitable gifts make.”
When I work with nonprofits to build a foundation for major gift success, I always start with their case for support, bring up their overall cycle of communication with donors and then get into tools like top prospect lists, gift pyramids, and technology tools. (For an overview of major gift fundraising concepts, check out my previous post, Major gift fundraising 101: There’s no magic drawer of prospects. There is also a previous post on how to write a case for support.)
Even with a basic knowledge of how major gift fundraising should work, Executive Directors new to major gift fundraising want to see concrete example of the tools they need to raise more money from individuals. They want to know that their efforts to spend one on one time with donors even in the midst of so many demands on their time will be worth it in the months and years ahead.
While large institutions can spend lots of time and money on fancy (and effective) software to manage their major gift activity, there are simple tools that small nonprofits can use successfully. Here are 2 examples of what these simple, but powerful tools look like:
Sample 1: A Top Prospect List in Excel
In this example, columns D – L should be exported from your giving database. Columns A -C (priority rankings, strategies, notes) are appended by staff, volunteers and perhaps your consultant so that all of your major gift activity can be tracked and updated in one place. The power of this top prospect list comes in providing visibility to your best donors and prospects so that activity to engage them can be done in a personalized, thoughtful and efficient way. Executive Directors, board members and staffers may feel overwhelmed at first to see the amount of meetings that need to happen, but soon they feel confident that holding one or two consistent slots on their calendars for donor meetings each week will quickly add up to sustained major gift activity that will benefit their donors and their organization’s fundraising results.
Sample 2: A Gift Pyramid (used in a campaign)
For organizations who are looking to raise a specific total for a specific project in a specific amount of time, gift pyramids are useful tools. If you want to raise $1 million, there are lots of ways to get there. You could raise $1 million from 1 generous donor, 2 donors who each give $500,000, 4 donors giving $250,000 or 10 donors giving $100,000. In reality, your actual results are going to look a little different. Your strategies to engage and solicit these donors will also look different in each of these scenarios. Whether you are successful or not with your fundraising campaign also depends on whether you have likely donors and prospects who are capable and inclined to give to you at these amounts. In order to project your ideal or likely outcomes, you need a gift pyramid which is part art, part science.
With larger gifts, it’s common to see a 1: 4 (1 gift to 4 prospects) ratio. With smaller gifts a 1:3 (1 donor to 3 prospects) ratio is a common starting point. A gift table helps an organization take their top prospect list (as shown above) and map specific individuals to the gift sizes needed to raise a total amount. If large gifts at the top of the pyramid don’t materialize, there is much more pressure put on their rest of the campaign.
I hope this post helps Executive Directors and Board chairs and Board members be more aware of the steps they could take to strengthen their major gift program and keep their loyal donors feeling great about supporting their organization year after year. In another post I’ll get to the staff and board training that’s helpful to carry out major gift activity in an expanded way. Major gift work really does pay off over time when an organization can give consistent, thoughtful effort to stewarding its top donors and prospects.