Major Gifts: All you need to know
Has it been a while since you updated the strategy for your major donor program? It can be tempting to rely on the same major donors year after year, but eventually, you’ll need new support to continue expanding your nonprofit.
At iWave, we are committed to standing by your organization through every aspect of the fundraising process. We put together this refresher guide on major gifts, so you can ensure you’re maximizing your major gift program.
If you have any questions along the way, our team of experts is happy to assist you. We can even provide you with a complimentary fundraising assessment or demo if you’d like to see iWave in action!
What’s a Major Gift?
Simply put, major gifts are the largest donations that your nonprofit receives. A donation amount isn’t standard across all organizations since every nonprofit is unique.
For larger organization, though, this may be a donation well over $100,000. As your nonprofit grows and expands, this number may change as well, adapting to the larger size.
Patterns in your fundraising data will indicate the standard size of major gifts for your nonprofit.
Studies have shown that nearly 90% of all funds can be raised from just 12% of donors. This means that 12% of donors are your major gift donors. As you can see, they play a key role in driving your cause.
Recalculate your major gift number on a routine basis. Simply look at the top 12% of your donors and establish your baseline from that data. Over time, you should see rising trends in this amount.
What’s a Major Gift Officer?
If you’ve been fundraising for a while, you likely already have a major gift officer in place. This team member leads all major giving efforts from identification and cultivation to solicitation and eventually stewardship.
At a large nonprofit, chances are you have a team of officers all working together to keep major gift fundraising organized and on track. How many officers you will need is also dependent on your organization’s (or simply a given campaign’s) size. Keep in contact with your officers, checking in routinely to inquire about how they’re handling their duties.
As you take on more major donors, and even donors in general, you will also most likely need to add more major gift officers!
Anatomy of a Major Gift Donor
In theory, a major gift donor could be anyone, but the vast majority have typical characteristics. They tend to already live in your donor database (not literally!), have a passion or affinity for your mission, have a history of giving (propensity), and have the financial capacity to give.
Finding Major Gift Donors
If you’re interested in building up your major donor program, then you’ll want to identify new people to support your cause. This process is crucial for the lifespan and vitality of your organization, so you’ll want to conduct prospect research on a consistent basis.
Prospect research is the process by which you determine potential major donors. You can do this by analyzing billions of datapoints through fundraising intelligence to see who has the highest propensity and inclination to support your cause. A fully customizable next-generation platform like iWave is perfectly suited for the task and can save your team valuable research time.
What to Look For
There are many prospects out there with the ability to give, but without a desire to support your specific cause, they likely won’t take action to become a major donor. By looking for those with key philanthropic markers that show they have a connection to your cause, you are more likely to earn a significant supporter for your nonprofit.
- Past Giving: Look for past charitable behaviors in potential donors. Those who have made sizable donations previously, specifically to like-minded organizations, are much more likely to support you as well.
- Nonprofit involvement: Search for prospects who are actively involved in nonprofits, including your own. Board members often make reliable major donors as well.
- RFM score: This score speaks to the recency, frequency, and monetary value of gifts provided by a donor. If the donor has frequently—and recently—donated a high-value gift, they may be more likely to be a major gift donor for your organization as well.
- Real estate ownership: Individuals who own highly valued real estate properties or own more than one property are more likely than the average person to give philanthropically.
- Stock ownership: Stock ownership indicates wealth, but it also means that a donor can make their donation by transferring stock—which can actually end up being a higher donation.
- Family information: When evaluating prospects, you should also examine information about their spouse, parents, and potentially their adult children for a more complete picture of their likelihood to support you.
How to Cultivate Donors in Your Current Strategy
Once you’ve found individuals who you think will support your mission, how do you turn them into donors? The most successful donor cultivation comes from interacting with your donors and fostering a solid relationship.
Some of the ways you can achieve this include:
- Introductory Meeting
This is a crucial first step when it comes to donor cultivation. Major giving should be a very personal process, so that the donor understands why they should support your mission. Take the time to get to know your potential donors on a personal level.
This can be done in person or via a video call. Either way, it’s important to put a friendly face on your organization.
- VIP Event Invitation
Special events just for major donors are a great way to encourage continuous support as well as thanking current donors for all they have helped you achieve. You can also invite prospects to these events, so they can get a taste of your nonprofit and connect with other major donors.
Virtual events are an added bonus because they allow you to expand your donor pool and reach out to people who might not be able to attend an in-person event due to travel restrictions or safety concerns.
- Office Tour
Since personability is very important for cultivation, take potential donors to your headquarters and show them your team in action! When they see how hardworking your staff is, and meet a few key members, they may be more inclined to jump on board.
Once again, if an in-person office tour isn’t feasible, you can easily arrange a virtual tour! Look into 3D video software that can fully immerse users in the video. You can include quick blurbs about various parts of your office as well, similar to info you would give during an in-person tour.
- Leadership Meeting
When at your office, schedule time for the donor to meet with your leadership staff. If a tour isn’t possible, a virtual meeting is also a great option. Either way, you want this meeting to be separate from your initial getting-to-know-you session.
Another way to show potential donors what makes your nonprofit unique is by asking them to volunteer. They’ll be able to see firsthand what you’re doing to enact change in your community and might feel compelled to assist in any way they can.
Testimonials from active volunteers and the community are also important, because they give a face to your organization.
- Informational Luncheon
If a prospect is interested and you’ve forged a personal connection, you’ll want to go ahead and start talking specifics. At an informational luncheon, you can go into the details of how the donor can become involved. This should be the last step in the cultivation process.
New Solicitation Strategies: How Can You Change Up Your Process?
When it comes to soliciting major gift prospects, there are many different avenues you can take. If you’ve been utilizing the same strategies for a while, it may be time to shake it up.
Ask yourself the following questions and build your new strategy from there.
What Have You Learned?
Analyze data from current strategies as well as from your existing major gift donors to look for trends. For instance, you may notice that when you use your donor’s name frequently in letters there’s a higher conversion rate. On the flipside, maybe the email marketing strategy you’ve been employing has not been as effective as you expected.
Make adjustments to your solicitation strategy based on these trends!
How Much Should You Ask For?
When you head into gift asks, do you have a specific gift amount in mind? Or have you just been asking for a major donation of any kind? Did you know that the more specific you get with your asks, the more likely you are to gain the funding you’re searching for?
You can use the fundraising intelligence from iWave and other key data to analyze a prospect’s background and craft an accurate and fair gift ask. Be mindful of any past donations they have made to either your organization or other like-minded nonprofits—affinity is crucial!
Do You Have a Backup Plan?
Sometimes you may find yourself in a situation where a prospect has declined your original gift ask. If a donor says yes right away, there’s a chance you’ll leave money on the table. Additionally, if a prospect says no, there’s no need to walk away completely.
Try heading into gift asks with a higher number than you think the prospect will agree to. Employ a backup plan (or backup gift amount) to whittle down the original request to an amount both parties feel comfortable with. This back and forth will also help prospects communicate with you better, eventually fostering a stronger relationship.
Do You Have the Right Documents?
Support documents are crucial to major donor cultivation because they show prospects why they should support your nonprofit as well as what donation avenues they can take. Look at the documents you’re handing out to your prospects. Are they conveying the right information? In other words, are they personal, do they provide examples of donation impacts, and are they compelling?
There may be times when you’ll want to bring on a marketing consultant to provide additional expertise. They’ll provide pointers on how to convey the most important information in a fun and personal manner.
What’s Your Conversion Rate?
It’s crucial to understand how many prospects are being converted to major donors. This will help you analyze data more effectively and also to understand where your strategy may need to be improved. Highlight the important parts of your pitch to learn if your message is being conveyed accurately.
Additionally, consider your digital conversion points. Does your website include enough contact forms, donation buttons, and ways to reach out to your team? The more digital conversion points you have, the better!
What Are Your Next Steps?
After your gift ask meeting, what are your next steps? You want to make sure you’re fully prepared, so no prospects fall through the cracks.
Ask yourself these questions:
- Do you have reliable contact information?
- How are you reaching out, and how often are you doing so?
- Are you keeping prospects well informed?
If you don’t have a clear strategy after the gift ask, then it’s time to craft one with your team. You’ll gain more supporters and strengthen retention with the ones you already have as well.
The Importance of Major Gift Donor Retention
How do you hold onto your donors for many years? How can you change up your strategy for them to encourage continuous involvement? It’s easy to see a major donor as providing a one-time gift and then moving on, but in reality, major donors frequently become repeat donors.
Gratitude is crucial in keeping the major donors you already have. After a gift has been given to your nonprofit, you’ll want to issue a personalized thank you note right away. Make sure to detail how their donation aids in your cause, helping encourage them to continue their support.
Thank you letters should only be the start though. Exclusive events and celebrations are a great way to engage with major donors and let them know you appreciate their help. Whether virtual or in person, these events are crucial to retaining your most valuable donors.
Pro Tip: Be Open to All Donors
We’ve talked a lot about exclusive events for major donors—those closer to the top of the donor pyramid. However, as the overall fundraising climate changes and strategies evolve, you need to be open to reaching out to mid- or lower-level donors as well.
Host virtual events that incorporate donors from all levels! Craft each event based on your guest list. For example, a high-end silent auction may not be best choice for your mid-tier donors, but a dinner party is probably a good fit.
You can even use iWave’s donor insights to identify your Hidden Gems. These donors might just surprise you!
How to Ramp Up Your Major Gift Program
Ready to upgrade your major gift program? It’s time to look at your strategies with fresh eyes. These tips will be your first steps forward:
Step One: Trust in Leadership
Your leadership should always lead by example, so you’ll want them to make the first donations. If you’re looking for a way to reinvigorate your existing program, you’ll want to check if every executive board member has pledged support.
Even if a leadership member has already contributed, you can ask for their support in finding donors as well. Since board members are very connected to the community, they may know someone with the ability to become a major supporter.
If a board member does know a good prospect, have them arrange for a personal introduction. You can schedule a lunch together or simply meet up at an event. By having your board member introduce you to them, you have a greater chance of turning them into a donor as well. Once again, donor cultivation often comes down to personal connection!
Step Two: Evaluate Your Fundraising Team
Your fundraising team should consist of prospect researchers and marketers. If you want to take your major gift program to the next level, sit down with each member and discuss their role and what their next steps should be.
It’s important to keep everyone on the same page during this process. Clearly define end goals, so team members are always working towards the same great achievements. Once again, reevaluating roles regularly is important since more team members may be needed with time and growth.
Step Three: Determine What Makes a Major Gift
As noted before, the amount of a major gift varies per organization. When you first put this program into place, you may have had a different major gift number in mind than you do now that your nonprofit has grown.
Sit down with an analyst and look at the donations your organization is receiving. Major gifts should be well over the average donation, making up the top portion of your donor pyramid. With an updated number in mind, you’ll be able to go into major gift asks with more confidence.
You’ll also be able to use iWave software to find the proper supporters to raise major gifts for your cause. Has your major gift number changed? Just use our platform to raise the wealth indicator bar with new parameters in mind—it’s that easy!
Step Four: Prospect Research
When was the last time you conducted a wealth screening? How often are you making use of wealth screenings? Are you searching for the right philanthropic and wealth indicators?
Revisit your prospect research practices and see if any changes need to be made. Our team is happy to grow along with you to show you how to take our platform to the next level of fundraising.
iWave is fully customizable, meaning you can adjust the parameters of the platform to perfectly fit your organization’s size, mission, and current campaigns. Our new Multi-Lens Modeling feature allows you to search based on even more parameters, narrowing down your searches to the best matches with more accuracy than ever.
Have you screened your current donors? By segmenting and rescreening your already existing donors on a regular basis you may find opportunities for them to support you further.
If you’re launching a smaller side project, screening current donors can help you find the right major support. Let’s say your donor, Nancy, contributed to your annual fund at the beginning of the year. Recently, you and your team have decided you need to build another wing for your rec center, so you launch a capital campaign.
Even though Nancy has donated before, she may be willing to support this new project as well—the affinity is already there, after all. By performing a wealth screening, you’ll be able to uncover existing donors like Nancy with the ability to make a secondary donation.
Step Five: Demonstrate and Promote Tangible Outcomes
Let’s assume your cultivation efforts have been successful, and your annual fund donor, Nancy, made a contribution to your rec center expansion. For her generosity, Nancy deserves to stay in the loop long after her gift has been received. She clearly felt passionate about the project and will want to see the end results!
Once the new rec center wing is built, you’ll want to update Nancy and all your other contributors, so they know their money went to the right place. You can invite them to the recreation center or show them pictures of kids enjoying the space.
Tangibly connecting the dots between donors, their contributions, and positive outcomes ends up forging far stronger bonds. By appealing to donors in this way, they may be more likely to support future fundraising campaigns.
Tackling a smaller project? Your headquarters should have a major donor wall where you can place the name of your most significant supports. Once your new donor’s name has been added, invite them to the unveiling or send them pictures of their prominently displayed name.
Step Six: Strengthen Your Solicitation Strategy
Your prospect researchers will want to gather profiles on each of your major donors as well as any candidates. Analyze these profiles to understand how you can best personalize your relationship with them, whether through major gift prospect meetings or events.
By understanding the best way to reach donors, you’ll have a better chance of receiving the gifts your nonprofit needs.
Step Seven: Your Stewardship Program
A solid stewardship program is crucial to retaining your major donors. Since your major donors comprise the smallest percentage of your donor pool, you can take the time to get to know each one personally. A strong relationship is a great marker for long-lasting support.
Some of the ways you can cultivate these relationships include:
- Check-in Calls: Ask how your donor is doing to see where your relationship stands. In periods of uncertainty, this can prove especially important.One-on-One
- Conversations: Separate from your check-ins, these should involve some face time, whether in person or through a video chat.
- Recognition: Give them a shout out in your latest newsletter or on your website. You can also craft a social media post to thank them—just make sure you have their consent first.
- Thank You Notes: Even if they haven’t recently donated, you want to let your major donors know their gift will always be appreciated.
- Talk About Opportunities: When you speak to your donors, you don’t just want to discuss their past gifts. Make sure you’re letting them know about new events, exciting opportunities, and any resources that have been added to your website.
Step Eight: Analyze Results
If you’re ever stuck with your current fundraising strategies and are unsure where to go next, you may want to analyze your successes and failures. Have an experienced member of your team go through the following factors:
- Return on investment: How much are you spending on donor cultivation compared to how much you’re getting back in donations?
- Secured gifts: How many donations are promised and how many are already in hand?
- Average major gift size: What’s the typical size of a major gift?
- Average giving capacity: How much can the average major donor give? How does this amount relate to your average major gift size?
These stats can help you build a more accurate donor search, leading to a more effective major gift program.
An Effective Major Gift Proposal
Crafting the proper proposal is vital to gaining the support you’re looking for. Want to make sure your major gift program is as successful as possible? Take another look at your proposals to see where there is room for improvement.
Personalize Your Efforts
While it can be tempting to send the same cultivation letter to every single prospect, it’s more effective to take the time to draft a personalized letter for each potential donor. You can include the same marketing materials for each prospect, but make sure the introduction is unique and personalized.
If you’ve met a donor before this letter, perhaps at an event, be sure to mention something from past conversations you’ve had. Surely, they’ll appreciate the fact that you remember them specifically. Next, set up a time to meet in-person or virtually and start working on establishing a relationship.
Once a prospective donor is aware of your organization and your personal mission, you’ll want to let them know where they fit into your plan. Determine their philanthropic interests, then see how you fit into their goals. Make sure your mission aligns fully with theirs, so you can feel confident it’s a solid match.
This can be a great time to offer a volunteer opportunity. With a hands-on experience, donors can be sure all your goals align.
Acknowledge Their Generosity
We can’t emphasize enough how crucial it is to recognize your donors. In addition to thanking them in public and private, reach out to them and ask for an impact story. This generates testimonials for your mission to provide to future prospects, while also giving your donors the credit they deserve.
Present Multiple Options
When you provide potential donors with various avenues for giving, you increase the likelihood they will support you for years to come. Knowing that there will be different campaigns and programs that they have the opportunity to get involved in encourages donors to continuously provide major gifts.
Not every donor is the same. Some may want to be planned givers while others are interested in supporting your current capital campaign. By showing all the options available, donors can be more personalized in their giving.
Your major giving brochure should include plenty of information on the various departments and programs your organization has to offer, so prospects can choose the best option for them.
Make Specific Asks
Are you currently asking donors how much they would like to give or are you providing them with a specific gift amount? Many nonprofits are simply asking for a donation of any kind, which means they may not be maximizing their efforts.
Our software will help show you how much you should be asking prospects for, so you can feel confident you’re maximizing your gifts received. This not only creates a more effective fundraising strategy, but it also helps you save time and resources.
Use Hard Data
When showing your prospects why they should support your cause, you’ll want to use specific and clear data to demonstrate your results. If your hospital has successfully treated 76% of cancer patients, for instance, then you’ll want to make this statistic clear in your gift ask.
Major Gift Best Practices
To ensure your program is as effective as it can be, you’ll want to follow these best practices.
To Cultivate a Donor
Host Events Catered to Your Donors
Events are a great way to drum up support while also getting to know potential donors on a personal level. Reach out to your donors to see what types of events they would like to be a part of, and then coordinate your events around what they say.
Leverage Board Connections
We touched on this earlier, but it’s a vital step in the major giving process. Not only should your board members make donations of their own, but they can also use their connections to find other supporters for your cause.
Have your donors provide you with information on any prospects they may know. You can then perform a wealth screening to see how they will fit into your donor pyramid and also how much of a gift you should ask for. Not every connection may lead to a major donor, but you can strengthen connections in the community to fuel your nonprofit for years to come.
Talk About Return on Investment
Before a major donor makes a commitment, you’ll want to show them their return on investment. Discuss the program’s impact on the community and what your future plans will be.
Emphasize specific areas of interest to the donor as well. For example, if a donor graduated from the science department at the university you represent, you’ll want to discuss how the chemistry labs have expanded and what research grad students have been performing.
Start a Major Donor Society
Your most generous contributors should be placed in a special major donor society. This group allows your donors to build a close-knit community that encourages engagement in your cause for years to come.
This will help donors feel like they are part of something exclusive and special—and they will be! Set a minimum donation amount to qualify for this program and establish benefits to this society. You can mention a small blurb about the society in your brochure to encourage more members.
As mentioned before, major donors can be cultivated by asking them to volunteer with your nonprofit. By showing your prospects tangible, firsthand results, you can increase the chances of them donating a major gift.
Be Transparent About Operations
Be as specific as possible when talking about how your organization or programs run. Show potential donors your day-to-day operations are running smoothly. You can also highlight areas where their donations could help improve your mission.
This transparency makes donors feel like they’re truly a part of your mission. Not only that, but it’s a positive indicator of success.
Vital Metrics for Major Gift Programs
As mentioned earlier, measuring success is very important for running a fruitful major donor program. The following are some of the most important metrics to measure for more effective fundraising efforts.
- Return on Investment: Tracks the fundraising results relative to the cost. Simply put, are you spending more on cultivation than you’re getting in return? You want to ensure your major gift efforts are paying off so you can meet your goals.
- Retention Rate: Shows you how many major donors are continuing to contribute to your cause. Look not only for what percentage of supporters donate again, but for when they are contributing. Do certain donors give around the same time every year? Do other supporters wait until an event is in place? This is all helpful information to know when putting together fundraising plans.
- Major Gifts Secured: The number of gifts received during a set period of time. Again, this can help you determine annual trends in giving so you can craft your strategies more effectively.
- Average Gift Size: The average amount of gift received from your major donors. When heading into meetings, your ask shouldn’t be lower than this number. You and your prospect(s) can agree on a number lower than this based on unique circumstances, but the average gift size should serve as a statistical baseline amount.
- Average Giving Capacity: Shows how much your supporters are able to give. This metric is different than the gift size in that it can help you determine if you are leaving money on the table. If there is a huge discrepancy between actual gift size received and giving capacity, meet with your team to discuss how to change your gift asks to be more effective.
- Asks Made: Determines how many times your major gift officers have asked for a donation. If you’re asking for donations more times than you are receiving gifts, then what can you do to be more effective in your asks?
How to Integrate Major Gifts into New Fundraising Strategies
Annual givers are towards the top of your donor pyramid, so they have a large impact on your overall fundraising strategy. You can count on these supporters to make a contribution around the holidays or your anniversary, so you may want to build up this program more.
Major donors can also plan to be annual donors. This will help you accurately plan your budget for years to come and ensures engagement with your cause over the years.
Planned giving is at the top of your donor pyramid and is therefore crucial to fundraising. With planned giving, donors pledge their support in the future. The time may be indeterminate, but these gifts are substantial.
Usually coming from a will, planned gifts require a delicate and practiced hand to deal with the intricacies. Speak to your team about setting up a planned giving program and what steps you will need to take to implement this strategy.
Capital campaigns are a strategy used when you need to complete a project—usually constructing a building—by a set end-date. These campaigns are then designated by two fundraising phases: Private/Quiet and Public. During the private phase, you’ll want to reach out to major donors to receive about 60% of your total fundraising goal.
If you want to launch a successful campaign, identify ideal private phase supporters through wealth screenings.
Fundraise with the Proper Tools
You can’t build a house without the right tools and materials, and the same goes for your nonprofit. Smart fundraising tools are essential for creating strong and long-lasting structures that will ensure years of success for your organization.
The following are necessary tools to propel your nonprofit forward:
Prospect Research Solutions
Your team works hard to locate the best supporters for your cause, but how much more effective could they be with the right platform by their side? You can build a house without a ladder, but it would make reaching the top of the structure extremely difficult–and in some cases, impossible. Fundraising software can be the ladder that helps you reach the top tier of donor cultivation. The right platform works quickly to uncover the right supporters for your mission by analyzing philanthropic and wealth indicators.
With a next-generation platform to take the reins and scan the bulk of this vital information for you, your team has more time to focus on cultivation and retention efforts. As a result, your organization will be even more effective!
Marketing is crucial to get your mission seen and heard. It will also show major donors why they should support you as well as the various ways they can do so.
Invest in materials that clearly outline your mission statement as well as the programs your organization offers. From planned giving to your annual fund, there should be quick blurbs in every promotional element you hand out.
Additionally, you should examine the materials you currently have. Do you have a lot of flashy pamphlets and brochures, while your digital presence is somewhat lackluster, for instance? Consider focusing more efforts on social media and other online platforms to reach a wider audience.
Major Gift Calculator
As your organization grows, so will your major gift amount. In the beginning, $10,000 may have been a large gift, but as your nonprofit started changing the community and gaining recognition and supporters, this gift amount has become more common for mid-level donors.
Analyze your major gifts at the close of every year and then reevaluate if this number should change with your growth. This is another great way to help track progress as well.
Online Fundraising Best Practices
Major donors can come from all over the world, which is why online fundraisers are a great option for donor cultivation. You want your strategies to be a good mix of in-person and online events with digital backup strategies in place for when face-to-face events are not an option.
The following are practices you will want to utilize when crafting your online strategies:
As with all fundraising efforts, communication is key, but this is even more important when it comes to online events. Since you won’t be able to meet with major supporters in person to shake their hands and have conversations, there are other ways you will want to show gratitude and get to know them.
Host online one-on-one meetings or small group events with major donors where you can have personal conversations and get to know each other better.
Regular communication needs to go beyond emails. It’s important to send regular correspondence when fundraising online, but you should also segment these emails. Include personal information like names or snippets from past conversations to let the donor know that you are talking to them specifically and not your audience as a whole.
Making your donors feel special and valued when you can’t be together in person is crucial for successful online strategies.
Utilize Video Marketing
Videos are a great way to keep your audience well informed. Newsletters can sometimes get skimmed through or lost in the shuffle of packed email inboxes. Have your team work on video updates that show volunteers out in the field, include testimonials, and incorporate facts in a fun and dynamic way. This will ensure your audience stays engaged and informed.
Convert Traditional In-Person Events to a Virtual Format
Many in-person events can also be held online. Look into online galas and auctions. Get creative with your efforts to help attract a larger audience. Remember, since these events are held online, you’ll have unlimited reach and even greater potential for fundraising.
Take Your Major Gift Fundraising to the Next Level!
No matter where you’re at in your fundraising efforts, our team at iWave is here to help you. Reach out to us today to learn more about how our fundraising intelligence can help you cultivate major donors and start rejuvenating your fundraising strategy.
New to our platform? Contact us to set up a free demo to see how we can get you started on uncovering the right donors for your specific cause!
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