As a nonprofit fundraising professional, you’ve likely heard the question posed: what’s better for your program—one gift of $1 million or one million gifts of $1? The answer is, of course, both. But the million-dollar gifts are significantly harder to come by! That’s why it’s so important to have a major gift program.
At DonorSearch, we work with all types of nonprofits to optimize their major gift strategies by targeting the best prospective major givers. To assist nonprofits like yours, we’ve put together this ultimate guide with everything you need to know about major gifts. We’ll cover:
- What Is a Major Gift?
- The Major Gift Fundraising Cycle
- Starting a Major Gifts Program
- Improving Your Major Gifts Program
Are you ready to learn more about major gifts and how to make the most of them for your organization? Let’s start with the basics.
What Is a Major Gift?
Major gifts are the largest donations an organization receives. Studies show that, on average, over 88% of all funds come from just 12% of donors. That 12% constitutes donations from your major gift contributors. Given their respective impact on your fundraising total, it’s clear to see why having a robust major giving program should be a priority.
What a major gift looks like to your nonprofit, however, will likely depend on your fundraising history, your average donation amount, and the size of your organization. Some smaller organizations consider $2,000 to be a major contribution, while other larger nonprofits have higher major gift thresholds at over $100,000.
The Major Gift Fundraising Cycle
The major gift fundraising process is broken into four distinct phases: identification, cultivation, solicitation, and stewardship. This fundraising cycle helps you find your prospects among a sea of dedicated supporters, then lead them to become vital major donors for your cause.
Let’s walk through each phase in more detail.
Major Donor Identification
In order to increase your major gift revenue, you need to first identify potential major gift prospects. Since major gifts make up a large part of your overall funds raised, it’s vital that organizations invest time in pinpointing these prospects.
Prospect identification requires you to conduct research by scanning the individuals in your donor database for common wealth and philanthropic indicators. This reveals both a prospect’s financial capacity to make a major contribution and their estimated openness to doing so. Those who have strong indicators for both capacity and affinity are your top prospective major donors.
Wealth indicators are what people typically think about when considering prime candidates for major giving. Wealth markers are simply signals of someone’s financial capacity to give at the level that your organization considers to be a major gift. These are some of the most common markers that prospect research looks at:
- Real estate ownership: A common wealth marker in donors is their real estate ownership. After all, an individual that owns more than $2 million worth of real estate is 17 times more likely to give philanthropically than the average person.
- Stock ownership: Not only can stock ownership give you an idea of a donor’s potential ability to give, but it also opens up a possibility for donations in the form of stock. This adds another unique way to give and can be more beneficial (if the stock is successful!) in the long run.
- Political giving: Information about political contributions is publicly accessible. Look at your supporters’ political giving histories for further insight into potential philanthropic giving capacity. Studies have also shown that donors who give over $2,500 in FEC and charitable campaigns are 14 times more likely to contribute to a nonprofit than those who do not.
When you take a look at donor characteristics like these, you can better understand a prospect’s ability to give. With this information, you not only gain insight about whether or not a supporter can give, but also the ability to adjust the size of your ask according to supporters’ actual capacity.
Philanthropic indicators speak to a prospect’s inclination towards charitable work in a general sense, as well as towards your mission more specifically.
Logically, it makes sense that a donor who has given in the past, has been involved recently and frequently, or has donated large sums over time is highly likely to donate a major gift in the future. That’s why these charitable markers are most commonly used to determine a prospect’s affinity to give:
- Past giving: It’s a good idea to look at your supporters’ past giving history (if they have one). Donors who gave between $5k and $10k to a nonprofit in the past are 5 times more likely to continue donating charitably.
- Nonprofit involvement: Determine if any of your supporters are actively involved with yours or other nonprofits. Whether as a foundation trustee, a director, a board member, or as a volunteer, someone who has been directly involved with organizations (especially those with similar missions to your own) is miles ahead of any other prospects on your list.
- RFM score: RFM scores speak to the recency, frequency, and monetary value of the gifts that have been made by a prospect. The more recent, the higher the frequency, and the greater the value of past gifts, the more likely that donor is to be an ideal prospect.
Although no philanthropic indicators can guarantee that an individual will make a major gift, it’s a great way to narrow down your target audience to the best possible candidates.
Major Donor Cultivation
Major donor cultivation is based on how your major gifts team connects with prospects and learns more about each one. This way, the eventual solicitation is more informed and better resonates with prospects. Here are a few of our favorite ideas for cultivating relationships with each prospective major donor:
- Schedule a get-to-know-you visit. The get-to-know-you visit is one of the most crucial steps in the prospect cultivation phase. Major giving is a very personal process, and one-on-one meetings build the foundation for a meaningful relationship with your potential major gift donors. If you can’t have an in-person meeting at this time, consider hosting a video meeting instead.
- Invite them to meet with leadership. Hosting an exclusive meet-and-greet with your executive director, board members, and other key members of leadership is a great way to court and ultimately cultivate major prospects. Consider multiple ways to meet with leadership including both virtually and in-person that can be adapted to meet the prospect’s comfort level.
- Invite prospects to a VIP event. Small, exclusive, and personal events show major prospects that they are not just donors, but they play a key role in serving your mission. Informational luncheons offer a casual way to educate prospects about major giving without being too formal. Keep your information action-driven, explaining exactly how major donations can be used to further your cause and achieve tangible objectives.
- Provide an office tour. Show potential donors what you’re all about, what you’re doing on the ground, and how you’re operating day-to-day with a tour of the office. This solidifies a donor’s interest in giving a substantial amount to your nonprofit by providing a tangible look at your operations. If a physical tour is not feasible, consider filming an exclusive virtual tour instead.
Focusing on cultivation before diving directly into a major gift solicitation is critical for ensuring that the prospective giver feels more like a key organizational partner than an ATM machine. This way, they can learn more about your nonprofit, your mission, and what your fundraising needs entail before deciding whether they’ll contribute.
Major Donor Solicitation
Once you’ve identified and begun cultivating relationships with your major donor prospects, it’s time to make the donation ask. Consider the following best practices for the best results:
Account for What You’ve Learned
Data is key when building or improving your major gifts program. The more you know about your prospects, the better equipped you’ll be to make an ask. For example, by leveraging information gathered through prospect research and wealth screening, you can determine a reasonable amount to request.
As a part of your data analysis for major giving, you’ll need to zero in on the information that determines donor giving capacity. At the end of the day, a donor’s wealth plays a significant role in major giving.
Once you have a better understanding of a donor’s ability to give, you can create a targeted ask that reflects their likelihood to support your organization. Ask too much, and you risk being shut down immediately. Ask too little, and you might leave critical funding on the table.
Prepare for the Conversation Beforehand
Putting in the time and effort to prepare for your meeting beforehand allows you to make a better case for why the donor should support your cause. Plus, you can gather resources to better communicate the seriousness of your need.
Supply your donors with evidence that shows them why donating to your nonprofit will positively impact the cause that they care about. Providing prospects with detailed documents that summarize your case for major donations.
You can even plan out your half of the conversation and anticipate what your donor may say in response. Highlight the major points that you might need to hit to create an effective pitch so that nothing important is forgotten in the course of the conversation.
Know Your Next Steps
Have a plan in place to follow up after your ask. Depending on your donor’s response, you may need to confirm a donation, send more information, or try a new approach. You’ll also want to be sure you have reliable contact information and notes from the meeting.
Go into your conversations with the expectation of negotiation. Begin your ask by making your highest request first. Whittle down your original request until both you and your donor feel comfortable.
Major Donor Stewardship
Once your donor has submitted their major gift, it’s critical that you continue to build and prioritize that relationship. These stewardship ideas can help you retain major donors and create a more sustainable major giving program overall.
Correlate Gratitude with Contributions
A successful stewardship strategy is about matching the level of commitment and enthusiasm that a major gift signifies. Usually, that’s a lot more than a single, personalized acknowledgment.
To appreciate major donors well means curating experiences and opportunities to thank and celebrate your major gift donors on multiple occasions. A lot of the same donor acknowledgment principles do apply, just on a grander scale.
Don’t Count Major Donors Out As Repeat Givers
One might think that if a donor has already contributed a significant sum, they would no longer be interested in giving further. But this actually hasn’t shown to be the case!
That’s part of why stewardship is so vital. Proper stewardship efforts ensure the retention of a major gift donor for the long run. Plus, it allows you to build on all the effort you’ve already put in. While you shouldn’t ask for a follow-up gift right away, it’s important that you don’t count major donors out as potential repeat supporters.
Communicate Additional Opportunities for Support
Another impactful way to steward major donors is by encouraging them to get involved with your organization in other ways.
For example, nothing gets donors (of all sizes) as excited or invested in your organization as getting hands-on with your work. Volunteer opportunities are great ways to engage your major gift donors in a fun and meaningful way. Volunteerism lets your major donors in on the action, allowing them to experience your organization’s work firsthand. And when you leverage corporate volunteer grants, you might even get an additional donation out of it!
Another great way to engage with major donors and prioritize your relationship without asking them to reach back into their pockets is by leveraging corporate matching gifts. Since more than 65% of Fortune 500 companies (along with thousands of other corporations as well) offer matching gift programs, the chances that your major donors are eligible for a match is high.
Start a Major Donor Society
Major donor societies are essentially members-only clubs for your most generous contributors. These types of groups function as fantastic opportunities for building a close-knit community of major donors.
The exclusivity makes donors feel as though they’re a part of something special—because they are. Plus, it offers a unique incentive for making a major gift. Setting a minimum donation amount for acceptance to the society encourages donors to give more than they otherwise might have.
Show Major Donors Their ROI
Because they’re giving a substantial sum to your organization, major donors understandably want to know exactly how their money will be used. That’s where communicating their ROI (or return on investment) is critical.
Show them the nitty-gritty, day-to-day details of the work and projects impacted by their contribution. This way, they can better visualize their financial support in practice. However, you’ll also want to communicate the bigger picture and show donors how their contribution extends beyond a singular project.
Starting a Major Gifts Program
If you’re looking to start a major gifts program for the first time, the process may seem overwhelming. By following these eight steps, you’ll be securing major gifts in no time.
1. Get leadership on board.
Major gift efforts require everyone on your team to be involved in some way, shape, or form. So you’ll need as much support from your leadership team as is possible.
As previously discussed, a great technique for courting major donors is to introduce them to your organization’s executive director or board chair. Your leadership team likely has valuable major donor connections, as well, and may be able to start some conversations with prospects.
But to do so, you need to make sure your organization’s leaders are on board from the get-go.
2. Recruit your fundraising team.
In addition to having your leadership on board, you’ll also want to have board members, fundraisers, prospect researchers, and even some marketers to have a well-built-out major gift team. And, of course, you’ll need a major gift officer (also known as an MGO) to lead the charge.
From identification to cultivation to solicitation to stewardship, your major gifts team will coordinate the process of identifying and building relationships with prospects who have the capacity and affinity to contribute a major gift. Other key responsibilities might include determining the direction of the major gift program, selecting prospects for cultivation, soliciting major donations, and designing a stewardship program.
For maximum impact, the individuals on this team should have an extensive familiarity with fundraising, excellent communication skills, a willingness to power through challenges, and a deep passion for your cause.
3. Determine your threshold for major gifts.
What qualifies as a major gift will vary from organization to organization. For instance, a smaller organization may consider a few thousand dollars to be a major gift, while a larger organization might require a gift to be over $100,000 to be considered major.
As you grow, your standards will naturally change and grow alongside the organization. It’s important to update your standards every so often, as this standard will dictate the strategy dedicated to cultivating and soliciting certain prospects over others.
4. Conduct prospect research.
You might be surprised by the number of major gift prospects that already exist within your existing donor database. Prospect research is the best way to find out who among your current supporters is likely to give a major gift.
Keep in mind that you should be scouting out prospects who have a history of giving to nonprofits as well as tangible wealth markers. If those two factors are in alignment, there’s a high likelihood that that person could be a potential major gift donor.
5. Establish tangible outcomes.
When a major donor gives to your organization, they expect to see tangible results from that contribution. They also might expect some kind of program perks. Incentives for donating never hurt! For instance, if a major gift donor gives a significant contribution to your capital campaign, they may want to have the opportunity to name the building they’re helping fund.
Be sure to communicate these outcomes and incentives beforehand so that prospective donors can know what to expect.
6. Draft your major gift proposals.
The next step is to begin the solicitation process. These helpful tips can assist you in making the ask!
- Personalize your appeal. Creating a customized proposal is vital. Leverage the relationship you’ve built with your major donor to craft the most effective proposal possible. Make sure to use your major gift donors’ preferred name in letters, emails, and in-person conversations. Use their desired titles and pay attention to the level of formality that they prefer.
- Summarize the options. Present your major donors with a few different campaigns or programs that their gift can support. These options will each create a slightly different impact in the community, allowing the supporter to give to the sector they’re most passionate about. Try to guide your donor toward high levels of need, but make it clear that they have the option to spend their money as they see fit.
- Align your goals. Your donor is already acquainted with your organization and its cause. Now, explain how the donor fits into the bigger picture by showing how their specific interests align with your nonprofit’s goals. Once you’ve determined your donor’s philanthropic interests and objectives, show them how they can serve those interests through your nonprofit.
- Make a direct, specific ask. Use the data you’ve compiled to persuade your major prospect to contribute. You should know from your research what their giving capacity is so that you can make an informed and accurate request. Using the information you’ve gathered about your donor, make a direct ask that includes the amount you want, the program that needs the donation, and why this particular program requires this gift.
Request that your prospect researchers compile profiles on your major gift candidates with recommended asks. Then, divide the profiles among your fundraising team. Each team member should work in conjunction with your board and marketers to create a presentation that is personalized for each of the major gift prospects.
7. Implement a stewardship plan.
Major gift donors invest a lot into your organization. It only makes sense to reciprocate and invest back into your donors as well.
Because there likely aren’t an overwhelming number of major gift donors within most donor pools, you should absolutely take the time to cultivate meaningful relationships with each and every one of them. This is also the best way to ensure long-lasting support!
Stewardship is one of the most important steps in the major giving process. Make sure you have a firm plan in place for how you maintain relationships after the gift has been made.
8. Assess your results and make improvements.
It’s always a good idea to set and evaluate key performance indicators (KPIs) when implementing any sort of fundraising strategy. It’s especially important to do so when you’re going through the major gift acquisition process.
Although the KPIs you track will depend on your organization’s goals and chosen strategies, many nonprofits choose to assess return on investment, gifts secured, average gift size, and average giving capacity. That’s because all of these metrics help indicate the success of your major gift strategy and its impact on your overall fundraising.
With these metrics in mind, you can assess your existing campaign and identify improvement opportunities for the future.
Improving Your Major Gifts Program
If your nonprofit already has an existing major gifts program, these tips can help you take your strategies to the next level. After all, there’s always room for improvement!
Integrate Major Gifts Into Overall Fundraising
A major gifts program is likely to be most successful if it integrates seamlessly with your overall fundraising approach. As a starting point, these three aspects of your fundraising strategy can perfectly align with your major gifts efforts.
Planned gifts and major gift prospects share some similar traits. Both often have a long-term relationship with your organization and a proven connection to philanthropic work associated with the mission. They also often have similar giving capacities from a financial perspective.
However, planned gifts are simply promised at a later date, often as a part of a will when a supporter passes away. Because of the shared predictors, it’s important to compare respective donor pools for the giving types.
A successful annual fundraising strategy places an emphasis on strengthening existing relationships. Because of this, your annual fund donors are some of your nonprofit’s most dedicated supporters. Your team should look towards annual givers when identifying major giving prospects.
Once you identify a prospect with the right financial capacity and a proven record of annual fundraising support, make your solicitation!
During a capital campaign’s quiet phase (before the fundraising effort is publicly promoted), the whole team works diligently to secure major gifts. In fact, approximately 60% of the average campaign’s total is raised during that major-gift-centric phase. As such, a dedicated major gift solicitation strategy is absolutely crucial for conducting a successful capital campaign.
Invest in Major Gift Fundraising Tools
Like any fundraising strategy, having the right tools can drastically simplify the process while maximizing collected revenue. While there is a wide range of software and resources to choose from, these are the most critical categories to consider.
Prospect Research Software
To design an impactful major gift program, you’ll need extensive project research. The more research you put in and the more data you’re able to compile, the better prepared your program will be. As a result, you’ll need more support and tools to maximize your efforts.
Luckily, with the help of a prospect research screening tool, you can drastically cut down on the time your team spends researching, freeing them up to focus on cultivation, solicitation, and stewardship.
Look for a software solution (like DonorSearch) that also offers you a mobile-responsive view of your prospects so that you can stay updated on the go. This will help you brush up on information as you prepare for in-person meetings with prospects.
Between the donor engagements leading up to the ask and the solicitation itself, you’re going to create and send a lot of marketing content to major donor prospects. Your best bet is to craft templates for common engagements to help speed up the process now and in the future.
You’ll be able to personalize each template for the needs of each major gift prospect, helping improve your relationship with your prospects.
Don’t forget that the way you send your message can also impact how supporters react to your nonprofit. Create the best impression possible and forge stronger relationships by using both direct mail and digital strategies to build a personal connection via physical reminders of your nonprofit.
Gift Range Chart
Helpful in mapping out the gift amount you’re aiming for, major gift range charts offer a great way to represent how your team should approach your fundraising goal in a visual format. They’re especially important if your team is conducting a capital campaign and you’re working to reach a certain threshold before you push your campaign public.
A major gift chart tells you how many gifts you need to acquire at various giving levels to reach your goal. For instance, if your nonprofit wants to raise $100,000, you may decide that you need one $50,000 gift, two $10,000 gifts, four $5,000 gifts, and ten $1,000 gifts.
Donor Database Software
From identification through solicitation processes, your organization will be presented with tons of new data. Nonprofits with the expertise to effectively manage that data are the ones that have truly successful major gift programs.
The first step of managing your donor data is having a comprehensive major giving CRM, so make sure you choose the right software for your organization.
Track Your Major Gift Fundraising Metrics
What better way to improve your existing efforts than keeping detailed track of your progress and determining where you can optimize your strategy? Consider tracking the following fundraising metrics to measure the success of your major gifts program.
- Major Gift Program ROI: Return on investment (ROI) is a metric that tracks the fundraising profit relative to its costs. Specifically, it calculates how much money you raised per every dollar spent. To calculate, simply divide the net revenue of your major gifts efforts by the total cost of the program. If the number is greater than 1, you’ve made a profit.
- Average Major Gift Size: The average major gift size is simply the average amount of donated money that qualifies as a major gift. To calculate, divide your revenue from a certain time period or event by the total number of major gifts in that same frame.
- Major Donor Retention Rate: Your major donor retention rate is the percentage of recurring major donors over a certain period of time. Be sure to update your donor information frequently so that you can identify donors who are no longer active. To calculate, divide the number of recurring major donors by the total number of major donors. Then, multiply by 100 to view the metric as a percentage.
- Average Giving Capacity: Giving capacity is an informed estimate of how much each donor can give and can help you to make more targeted, accurate requests for donations. Compare your average giving capacity to your average major gift size to ensure there isn’t a sizable discrepancy.
- Major Gift Asks Made: This metric tracks the amount of times your major gift officers have asked for a donation. Keep a running tally of your asks within your donor profiles. Tracking asks made will ensure that you reach your target number of asks without asking the same donor too often.
To make the most of these data points, be sure to continuously track over time to determine whether your major gifts program is growing overall. If not, consider making necessary adjustments to get your program back on track.
Be Prepared for a Crisis
It’s no secret that COVID-19 has affected how nonprofits and other organizations raise money. It also led a lot of organizations to consider how prepared they are to adapt to future crises as they arise. Here are a few best practices to keep your nonprofit afloat in difficult times.
Determine Whether You Should Rethink Your Strategy
While you likely shouldn’t continue “fundraising as normal,” that doesn’t mean you should pause engagement altogether. If anything, this is a great time to work on developing your supporter relationships and start a meaningful dialogue that strengthens your connection with them.
However, you might need to rethink your current major gifts strategy. Instead of a significant gift as the end goal, focus on developing those relationships to set yourself up for future success.
You already know that keeping your existing donors is more beneficial and cost-effective than trying to acquire new ones in the future. By focusing on your donor relationships now, you set the stage for continued engagement down the road.
Implement Donor Segmentation in Communications
Times of crisis often mean that your donor relationships are more fragile than usual. One mistake or wrong email can turn the supporter off from your cause. Make sure to segment your major gift donors to ensure that you create specific content targeted just for them.
For example, you can use video tools to continue scheduling important meetings with donors. Nonprofits often meet with their major gift donors one-on-one to update them on important organizational changes and to continue developing the relationship. You may also choose to ask your major donors for their opinions on programming to make them feel more connected to the actions your nonprofit is taking during difficult times.
Provide Targeted Engagement Opportunities
Times of crisis also offer opportunities to increase your non-fundraising communications. Consider whether this is the best time to ask for a major gift. If not, consider non-fundraising communications like asking your major donors how they’re feeling, providing helpful resources regarding the situation, continuing to host online experiential opportunities, and more!
Virtual fundraising events and other online opportunities are a great way to keep your major gift donors engaged even when face-to-face interactions are infeasible. Even as times continue to change, make sure to ask your supporters how they’re most comfortable meeting before you set up the interaction.
Major gifts can have a significant impact on your organization, its programming, and the mission you’re striving to achieve. However, they tend to take a bit more time, planning, and resources to secure than a typical-sized donation.
Whether you’re launching a major gifts fundraising program for the first time or seeking to optimize an existing plan, the tips, practices, and resources discussed in this guide are sure to help.
If you’re looking to learn more about strategic fundraising practices and how to raise more with major gifts, be sure to check out these other useful resources:
- Prospect Research: The Ultimate Guide. Set yourself up for success by targeting the best prospects. Find out how to screen for common wealth and philanthropic indicators with this guide.
- Capital Campaigns: Understanding the Basics. Capital campaigns rely on major gifts to reach their goals, especially during the quiet phase. Explore this resource if you’re thinking about launching a capital campaign.
- Major Donor Fundraising: Most Effective Strategies. Behind any major gift is the major donor who gives it. Find out how to identify, cultivate, solicit, and steward these invaluable relationships.