Learn how to create a resilient Major Gifts program.
Major gifts, which include planned gifts, are the largest form of gifts an organization receives. A major gift can be a game changer for even the smallest nonprofit. Studies have shown that almost 90% of total funds of an organization can come from only 12% of donors who have the capacity to give large amounts of money. That said, the definition of a major gift is evolving in the face of income inequality, and that means we can ask for more from folks with deep financial means as well as honor and recognize consistent giving at lower financial levels as part of being a ‘major’ giver.
While all of these major gifts play a significant role in keeping your nonprofit going, it is important for a nonprofit to have a focussed effort on soliciting high-net worth and ultra-high net worth donors who have the potential to support its mission and also, raise significant amounts of money, with fewer resources and less time.
WHAT IS A MAJOR GIVING PROGRAM?
A major giving program is the key tool in cultivating a designated group of “Major Donors” or traditionally, high-net worth donors who can make the largest gifts to an organization in size and in impact. Many programs focus on donors who can give $1,000 or more or who have given for 5+ years and cumulatively have given $1,000 or more.
The program focuses on building and maintaining relationships with a portfolio of donors who have the capacity and the affinity to stick with the mission and resource it ongoing.
WHY SHOULD A NONPROFIT LAUNCH A MAJOR GIVING PROGRAM?
Any nonprofit, no matter how small, can start a major gifts program. But why should an organization launch a major giving program?
Major gifts enable a nonprofit to fund its transformational programs.
Major gifts support organizations in creating key allies to continue redistribution and reparations efforts, particularly when fundraising for missions is rooted in justice work.
These forms of gifts have a higher return on investment (ROI) than regular gifts.
Major gifts are the greatest driving forces behind your ability to make greater change and exert a larger impact for more people.
STEPS TO CREATING A RESILIENT MAJOR GIVING PROGRAM
DEFINE “MAJOR” FOR YOUR ORGANIZATION
There is no industry standard defining what a major gift is. The gift size is unique to each organization. But, there’s a technique you can use to identify what “Major” is for your nonprofit.
Identify the 25 largest gifts made to your organization in the timespan of the last 5 years.
Inspect the range of those gifts and take out the donations that don’t fall in that range. For instance, if your range is between $15,000 and $20,000, you have to eliminate a $30,000 gift, since that doesn't represent the majority.
Calculate the median of your range and set an estimation of a minimum amount for a major gift.
Make sure to be flexible with the minimum amount set. If you notice you’re getting donations lower than the minimum, you’ll have to decrease your minimum amount and vice versa. You may also want to conduct this same analysis with lower or mid-level donors and decide to have cumulative gifts represented as well (such as $1,000+ donors across 3+ years.)
2. CREATE A MAJOR GIFT DEPARTMENT OR HIRE A MAJOR GIFT OFFICER
Having a department made up of professionals to take care of the whole process of relationships building and retaining is a must. And if you see a lot of capacity, you’ll want to hire a point person as the Major Gifts Officer (MGO).
The MGO leads the process of building relationships with potential prospects and takes care of all aspects of the program. The duties of a MGO usually are:
Setting up and coordinating the major gifts fundraising program
Determining the direction of the program
Identifying major gift prospects for cultivation
Building relationships with the prospects
Soliciting donations from the chosen prospects
Planning and designing a donor stewardship program
3. MAKE SURE YOUR WEBSITE HAS THE OPTION OF RECEIVING NON-CASH GIFTS
Since 97% of an individual's wealth is usually held in a non-cash form; like real estate or stocks, you’ll have to make sure you have an easy and accessible way for donors to make their contributions through your website. Moreover, a study has shown that organizations that accept non-cash gifts realize a 50% growth in fundraising revenue, while the ones who accept only cash realize a growth of 11%.
4. RESEARCH AND IDENTIFY MAJOR PROSPECTS
Prospect research or prospect identification comes next. Your organization's database or donor CRM can be scanned to search for prospects. If you don't have an extensive CRM, LinkedIn or professional sites on the internet can be used to search for and learn about potential donors.
Wealth and philanthropic indicators are the 2 factors that qualify a donor as a potential prospect.
Wealth Indicators: These indicate the financial capacity of a donor which allows him/her to give at a certain level. The capacity formulators are:
Real Estate Ownership
Philanthropic Indicators: Donors who have a frequent involvement in the philanthropic sector and are known to have a history of donating large sums, are more likely to be qualified as prospects.
The philanthropic indicators are:
Past giving patterns
Involvement in the nonprofit sector, whether as a foundation trustee, a director, a board member, or a volunteer.
Personal information; like their background, values, and beliefs that might align with your organization’s values and mission.
Membership at a donor-serving organization or community of some kind.
5. HAVE A STRONG DONOR CULTIVATION STRATEGY:
Building genuine relationships with potential prospects who care about your mission and have a high interest in making a contribution is necessary to secure major gifts. This process is called donor cultivation.
Cultivation can take six months or longer to be authentic and thoughtful. Throughout the cultivation process, you should make sure to explain your goals and clarify why you need support while also listening to a donors’ desire to make a difference and engaging them in networks and resources that complements their interests.
Some strategies that can be used to get closer to your potential donors are:
Schedule calls or one-on-one meetings to understand what motivates them to support your cause.
Utilize texting to reach out to donors. Emails are formal and effective, but texting has a higher open rate. Especially with millennial donors.
Organize exclusive events and invite them to meet your executive director, board members, volunteers, and beneficiaries of your nonprofit’s work.
Take them on a tour of your operations.
Meet up with them at a conference or gathering with like-minded allies in your movement area.
Create videos or presentations that showcase the transformational work you’d like to achieve with their support, showing the ROI of their gifts.
6. APPRECIATE YOUR DONOR’S EFFORTS AND STEWARD THEM FOR FUTURE GIFTS
After the donor has made their contribution, your work is not done! Donor stewardship comes next. It is the relationship building process that happens after a gift is made and allows you to begin to establish trust around your partnership. You don’t want to lose connection with major donors who are most likely to become repeat givers if they see the ongoing impact of their financial gift. It’s important to acknowledge their contribution and to thank them for bringing you steps closer to mission making.
Donor appreciation should be an integral part of your stewardship plan. These donors’ efforts should be recognized thoughtfully as they have the highest chance of recurring. Public recognition can also be a motivation for other donors to get involved themselves. Think about ways that are equitable yet meaningful to acknowledge donors’ contributions.
Some appreciation ideas:
Post a well-crafted video or photo on social media to thank donors for their support.
Prepare social media posts showing the impact you were able to make because of their gifts.
Send a donor thank you email to show gratitude. Make sure to send it within 2 weeks after you receive the donation.
Recognize their efforts on your website’s impact page.
Keep sending invitations to volunteer or for exclusive events.
Update donors regularly on your organization’s progress.