Building a strong process for raising major gifts involves strategic planning, personalized donor engagement, and ongoing stewardship. By understanding the importance of major gifts and implementing the right steps, your nonprofit can secure the necessary funding to achieve its mission and make a lasting impact. Remember, the key to success is building genuine relationships with donors and demonstrating the transformative power of their contributions. In this podcast, Julie Ordonez from Courage Lab and Stephen Halasnik from Financing Solutions, discuss building a process to raise major gifts for nonprofits.
Summary
A Spotlight on Building a Process to Raise Major Gifts for Nonprofits
Raising major gifts plays a vital role in sustaining and advancing nonprofit organizations. These substantial donations hold the power to influence your organization’s capacity to fulfill its mission significantly. Therefore, building a process to raise major gifts is one critical aspect of fundraising that you must take seriously if you wish your nonprofit to perform well.
This article will lead you through the essential steps to establish a successful major gift fundraising process, thereby fortifying your nonprofit’s ability to flourish and extend its impact within the community.
What Do We Call Major Gifts for Nonprofits?
Major gifts are the biggest donations that a nonprofit receives from individual donors. These donations are typically used to fund specific projects, meet fundraising goals, or support general operations. Depending on the size and focus of the organization, the specific amount of a major gift can vary, but it generally constitutes a substantial portion of the organization’s annual fundraising target.
Why are Major Gifts Important to Your Nonprofit?
It is important to keep in mind the following information:
Technically, 80% of your gifts come from 20% of your donors. Assuming your nonprofit organization has a pool of 100 donors, it’s worth noting that around 20 of them contribute to 80% or more of your fundraising revenue. This is called the “rule of 80/20” or the “Pareto principle.” This means that these 20 individuals play a significant role in sustaining your organization’s financial health. As a result, it is only wise to prioritize building and nurturing strong relationships with these key donors. Their consistent support has a tremendous impact on your organization’s ability to fulfill its mission, cater to its beneficiaries, and compensate its workforce.
In all, building a process to raise a major gift is important as it helps you allot your cultivating time properly. In other words, you can spend more time cultivating the 20% of people who are your major donors than you spend on the other 80%.
Who are the major donors?
If you wish to build a process to raise major gifts for your nonprofit, you must answer this pertinent question- who do you consider major donors in your organization? Major donors can vary widely among nonprofits. However, they generally share the common traits of having the capacity and willingness (giving affinity) to make substantial donations.
Giving Capacity
This refers to a donor’s ability to make a significant donation, often indicated by factors such as high net worth, prestigious professional titles, and ownership of real estate and stocks.
Giving affinity
This involves the willingness of a donor to support your nonprofit’s mission due to a strong alignment with its goals and values. This affinity may be demonstrated through past engagement with your organization, serving on the board, and showing a personal connection to the cause through their actions and support.
Steps to Building a Process to Raise Major Gifts for Nonprofits
Establish Major Gifts Threshold For Your Nonprofit
The first step towards building a process to raise major gifts for nonprofits is establishing a major gift threshold. This means you should first identify your unique major gift range. You can achieve this by taking the mean of the top 20% of donors of your nonprofit in the past. For instance, if the range is between $10,000 to $20,000, then you could set it at $15,000.
This allows you to understand who your major donors are, what leads them to give at a high level, and how you can build relationships with them and potential major donors to foster a sustainable giving stream.
One of the most common challenges that nonprofits encounter is engaging with lukewarm or cold prospects when seeking major gifts. Hence, it’s crucial to approach the right donors at the right time. Here’s how you can identify the best major gift prospects for your nonprofit
Identification factors
Remember to consider the two main factors when identifying potential major gift donors for your nonprofit- giving capacity and giving affinity. The best major gift candidates are donors who have both the capacity and affinity to give. In other words, they must have what it takes (capacity), a history of giving, demonstrate high engagement with your organization, and have a high generosity score (affinity).
So, when searching your preferred donor database for potential major donors, focus on the three C’s of major prospects- their connection depth to your nonprofit, the concern they have shown for your mission, and their capacity to give.
Building a Strong Team
Apart from having leadership support, it’s important to establish a well-rounded major gift team, which includes supportive board members, a major gifts officer (MGO), prospect researchers, and relationship managers. However, the team should be spearheaded by the major gift officer (MGO).
The major gifts team will be responsible for identifying and building relationships with potential donors who have the capacity and affinity to make major gifts. Key duties will involve:
– Establishing the organization’s major gift threshold
– Identifying prospects and selecting the most promising candidates for cultivation
– Requesting donations from major donors
– Developing a stewardship program
For optimal results, team members should possess extensive fundraising experience, strong communication skills, a determination to overcome challenges, and a deep commitment to the cause.”
Cultivating Donor Relationships
You must understand the Major donor cultivation process. This involves your major gifts team connecting with prospects and learning more about each one. When your team goes through this process, the eventual donation solicitation will be more informed and resonate better with prospects.
To kick off the cultivation process, create a compelling case for support that you can present to potential donors. It’s important to remember that donors are motivated by their passion for your mission. In fact, in a study, 42% of donors stated that hearing personal stories from the people helped by a nonprofit influenced their decision to donate. Clearly explaining why their support is needed and how it will make a difference is crucial for securing donations.
You could start by creating opportunities that will bring more intimate relationships with your donors. For instance, you could use the following strategies:
- Host intimate and exclusive events: Organize special events for the prospects. During the occasion, allow your major gift officer and support staff to interact with these prospects personally. This event could be something like luncheons or tours of your nonprofit’s facilities.
- Regular communication via email and social media: Constant presence on these platforms will establish your brand. Ensure to provide mission updates, and show prospects that you’re actively engaging with your community.
- Seek their help and opinions: Let your prospects and stakeholders know you care about their opinions. This will help to establish a trusting relationship with them and increase their interest in your mission.
- Organize one-on-one meetings: Let your prospects know your team members and ask questions about your mission.
- Invite prospects to volunteer: Encourage prospects to see your mission in action and understand how your organization operates.
Ultimately, remember to track each interaction you have with your supporters and prospects in your CRM. This helps you to understand the cultivation process and the status of the relationship.
Asking for a Major Gift
Timing and Strategy
When planning to ask for a major gift, it’s important to consider the timing and strategy carefully. Take into account the donor’s existing relationship with your organization, their willingness to contribute, and any external factors that may affect their decision.
Crafting the Proposal
Creating a thorough and well-structured proposal is crucial. Your proposal should clearly outline:
– The precise amount of the donation you are requesting
– The specific purpose of the gift and how it will be used
– The potential impact the donation will have on your organization
– Any form of recognition or benefits the donor will receive as a result of their contribution
Presenting the Ask
When it comes to presenting your request, it’s essential to be both confident and respectful. Ensure that you:
– Express gratitude for the prospect’s previous contributions
– Clearly articulate your request
– Highlight the positive outcome that the gift will bring
– Address any questions or concerns the donor may have
Following Up
When following up with donors, you must express sincere gratitude for their contribution. Timely and heartfelt thank-you notes or messages help reinforce the significance of their support.
In addition to expressing gratitude, it’s important to keep donors updated on the impact of their contributions. Providing detailed impact reports that illustrate how their gift is being utilized and the difference it’s making can go a long way in strengthening their connection to the organization and fostering future giving.
Finally, regular communication is key to maintaining strong relationships with major donors. This includes informing donors about the organization’s activities/ accomplishments and inviting them to special events and opportunities. Personalized updates and reports tailored to each donor’s interests and previous contributions can also help maintain their engagement and commitment to the cause.
About Our Guest, Julie Ordonez from Courage Lab
Julie Ordoñez is a major gifts strategist and coach on a mission to equip leaders with the courage to ask for more and raise multi-billions to solve the world’s most pressing issues. With 14 years of experience in major gifts, Julie was top 1% performer at United Way of Greater Los Angeles among 90 FTEs, and at LIFT as well as New Story raised $2.5M in her first 12 months in the role in 2022. She has coached and trained over 200 nonprofit executives and major gifts teams since 2018.
She’s the founder of CourageLab, a 6-week major gifts training for leaders
Learn About Stephen Halasnik
Stephen Halasnik co-founded Financing Solutions, the leading provider of lines of credit for nonprofits and church financing. The credit line program for nonprofits & churches is fast, easy, inexpensive, and costs nothing to set up, making it a great backup plan when cash flow is temporarily down. Mr. Halasnik is also the host of the popular, Nonprofit MBA Podcast. The podcast brings experts to discuss fundraising, nonprofit grants, executive director leadership, nonprofit boards, and other important topics. You can learn more about the nonprofit line of credit program here or call 862-207-4118.