Do you dream about your nonprofit doing more for your mission? Wouldn’t it be great if someone with the means enough to make a major difference loved your cause so much that they made a significant gift to your organization? Better yet, how about having a ton of people like that?
These dreams can become reality—really. But they’re not just going to fall out of the sky. You have to work for them by finding out who’s interested in your mission, making connections, bringing them into your world, and most importantly, asking them to walk with you in helping others.
Welcome to the world of major gift fundraising. In this guide, we’ll cover everything you need to know about starting a major gifts program and maximizing the funding for your nonprofit. Specifically, we’ll discuss the following:
- Frequently Asked Questions About Major Gifts
- Best Practices for Soliciting Major Gifts
- 3 Things You Need For a Successful Major Gifts Program
Frequently Asked Questions About Major Gifts
Whether you’re looking to create a major gifts program for the first time or simply aiming to revamp your current major gift fundraising strategy, you likely have some questions about the process. That’s why we’ve compiled and answered some of the most-asked questions on the subject here!
What are major donors?
Let’s start off by defining what a major donor is. The basic answer is easy: anything you want it to be! It seems a bit loose, but it’s true. There are no hard and fast rules when it comes to defining a major gift. What’s “major” to you could be considered “regular” or even “minor” by another nonprofit, and your definition could be unattainable to others.
Your organization can define major gifts as anything you want that suits your circumstances. However, it’s a good idea to have a set standard for your nonprofit, so here are some ways to come to an answer:
- Major gifts as defined by a dollar amount. This is the most popular definition. What dollar number seems big to you? If you regularly get $25 gifts, then $1,000 might be major. If you regularly get $10,000 gifts, perhaps anything over $100,000 is major. It’s all up to you, and will likely vary based on your typical donation size.
- Major gifts as defined by a percent of your donations. What defines the top five percent, or even one percent of gifts to your nonprofit? You can draw the line there to decide what constitutes a major gift.
- Major gifts as transformational to your nonprofit. What size gift would transform your nonprofit? How big does a gift have to be to make a substantial difference? Underlying this question is a well-defined strategic plan for your nonprofit’s future. For example, imagine you’re a nonprofit that rents office space. To really move your mission forward, you need to buy a bigger space so you can run your programs more effectively. In this case, gifts of, say, more than 10% of the total building cost could determine your definition of a major gift.
- Major gifts as a stretch for your constituency. Complete an analysis of your current donor base and figure out what they can give. In a campaign setting, this is usually called a feasibility study, but you don’t need to be in a campaign to use the methodology. Most prospect research firms can analyze your donor list and help estimate their giving potential to define what a major gift would be for your supporters.
- Major gifts as defined by an emotional response. This is a popular definition because it makes major gifts feel real rather than an arbitrary, abstract number. Ask yourself, “at what level, if someone came in with a gift of that amount, would you celebrate with a party, and maybe even give the staff member a day off?” That number is your definition of a major gift.
Whatever definitions and numbers you use, your idea of a major gift should be reviewed at least annually. If you start out defining “major” at $1,000 and become successful at it, you’ll want to look at potentially upping the minimum to $2,500 or $5,000 the following year.
Before we step away from your definition of a major gift, make sure you define how a gift is made as well. Let’s look at three possibilities that are not just one-time gifts of cash or its equivalent (like stocks or bonds):
- Multi-year pledges: For example, let’s say $100,000 is a major gift for your organization. Is it okay for someone to make a five-year pledge to pay $20,000 each year and still be considered a major gift donor?
- Planned gifts: Will you take an insurance policy? A bequest intention in a will? A life-income agreement such as a charitable gift annuity? Do these types of planned gifts count toward your major gifts program?
- Gifts-in-kind: What if someone gives you a boat worth $100,000, a piece of land, or even a business? Would those non-cash donations be considered major gifts?
It’s a good idea to answer these questions now, before diving too deep into your major gifts strategy. This forethought will save you a lot of time and energy when the gifts are considered.
How do you identify a major gift prospect?
Most major gift programs define their target donors as individuals or family units making personal gifts. However, there’s no absolute reason to exclude foundations and businesses from your major gift definition. In fact, some people who you’ll target as prospects for a major, personal gift will own businesses or control assets in a foundation or donor-advised fund.
Make sure that you see the donor as they see themselves. While you may see a person and a business or foundation as separate, and legally they are, the person making the giving decision could well see all of these as one unit. That means you need to approach them as one giving unit and let them decide which pocket supplies the final gift amount.
Once you define a major gift and the nature of the prospects, how do you spot a major gift donor? Let’s start with the CIA method.
No, not the spy agency! When it comes to major gifts fundraising, CIA stands for Capacity, Interest, and Access. To get any gift, major or not, you need CIA. Without even one of the three, there’s likely no gift. For major donors, in particular, the “C” makes a world of difference. Let’s break down each element in greater detail:
- Capacity: For major gifts, this is where it counts. The person you’re asking needs to have the means, or have control of the means to make the gift in the amount you’re asking. If your prospect does not have the capacity to make a major gift, you’re not going to get one—regardless of how much they care about your mission.
- Interest: The stronger the interest in your mission, the bigger the gift. If a donor doesn’t care about the problem you’re trying to solve, you’re not likely to get a gift, whether they have the money to or not. No interest, no gift!
- Access: Finally, you need to have a connection to your donor. If you’re talking about a letter, you need a postal address. If an email, then an email address. For a personal solicitation, you need to meet them face-to-face (via video or in-person). Simply put: if you can’t get to them, how can you make your ask?
It doesn’t occur to most people that it’s best to start with identifying people with interest, rather than capacity. That’s because by identifying enough people with high interest, the odds that some will have the capacity to make a major gift are high. If someone really loves your mission, they will find a way to support you in a way that is above your expectations.
Next, you have to consider what your ideal donor looks like. What are their personal characteristics? Are they well educated? Where do they live? Do they fall into categories based on ethnicity, religion, gender, type of home, or style of dress?
Don’t forget to include indicators of strong interest, as discussed above. Do they show up for your events? Have they supported your fundraisers in the past? Be as specific as you can. Some nonprofits will create an illustration to make a strong visual image.
When done well, it turns out that your profile will expand, not limit your pool of prospects. Why? Because you have given your brain a definition to find. For example, if you drive a certain car, you likely see a lot of that model on the road. You might check out the different colors, models, or modifications. But the reality is, no matter what car you drive, there are not as many on the road as you think. Your mind is just trained to spot them, and now you’re training your brain to do the same with major gift prospects.
Just remember, your profile is a guideline rather than an absolute. If you identify someone who is a major prospect who meets 75% of your definition, that’s certainly okay.
As you’re building your profile, consider who in your current database might fit your definition. You may have unidentified major prospects right under your nose! You’ll also want to consider that major wealth doesn’t always show. For more on this, check out The Millionaire Next Door book series by Thomas Stanley.
How do you secure a major gift?
Now, the big question… how do you get a major gift? The answer is remarkably simple: you ask.
Really, can it be that easy? It turns out it is. The biggest obstacle is the solicitor’s frame of mind.
The nature of asking anyone for anything is to put yourself in a less powerful position. Think about the last time you asked a parent or grandparent for money (even if it was forever ago). It probably wasn’t comfortable, and for some, it’s almost physically painful. You might even say it was like begging. No wonder people don’t like fundraising! Begging is no way to build a nonprofit that does great things and deserves the community’s support, especially when it comes to major gifts.
Luckily, there’s an alternative, and it comes with a handy formula: 1-2-1/4-1. One-to-one (your and your donor) for one (the person who is receiving the benefits of your mission).
This “formula” defines the nature of a successful relationship between a solicitor and donor and the purpose of the solicitation. As an added bonus, it’s also easy to remember.
The nature of any solicitation should be “one-to-one,” whether in person, by mail, or in another way. You and the donor are in partnership for a cause. It’s not begging. Why? (And this is important!) Because you are not asking for your own benefit. Instead, it is fundraising because you are asking for the benefit of someone else. You’re not even asking for your nonprofit. You’re asking for the person who receives the services of your nonprofit, the end constituent.
The 1-2-1 partnership to help someone else is the leveler between you and your prospect. The donor meets their goal by providing the resources, whether that’s because of their dedication to the cause, an interest in the community, a need for a tax deduction, or another reason. You meet your goal by driving your nonprofit’s mission forward. Together, you serve the person who ultimately benefits from your nonprofit.
How do you start a major gift program?
One person makes one solicitation for a major gift, and that’s a major gift ask. One person makes a lot of asks, and you’ve got a major gifts officer. More than one person making more than one ask, and you’ve got yourself a major gifts program.
So what exactly constitutes a major gifts program? A major gifts program has:
- Goals. Financial goals, yes, but real financial goals are your mission’s program goals reduced to numbers.
- Messaging: Messaging is your program goals described in a way that your donor can understand and put in light of the people who benefit from your mission.
- A list: The better your list of major donors and prospects, the more successful your solicitations will be. What makes a good list? The people on it should follow the CIA method of prospect profiling!
The key to a successful major gifts program is the coordination of resources and consistency of messaging. This drives toward meeting your fundraising, programmatic, and mission-based goals—all from a list of people to ask.
Best Practices for Soliciting Major Gifts
The steps to getting any charitable gift are remarkably similar, regardless of the solicitation method. They are especially important to follow in major gift fundraising. Let’s walk through these four basic steps:
- Identifying your prospect – Know who your prospect is.
- Engaging your prospect – Make contact with the prospect and introduce them to your mission. Take steps to get to know them and let them get to know you, your nonprofit, and your mission.
- Soliciting your prospect – Make the ask.
- Stewarding your donor – Say thank you, and show your gratitude for their gift.
But how can you follow each of these stages effectively? Take these best practices into consideration at every step of the way.
Identify your donor through prospect research.
When was the last time you hired a plumber, electrician, or mechanic? You likely did an online search to find who was nearby. You read reviews. Maybe you asked some friends or neighbors—all before you made the call.
You identified who you needed through prospect research. Nonprofit prospect research isn’t too much different. You’re just looking in different places and using different data sets.
And in the end, prospect research is to find out who has the C, I, and A to be a donor at the dollar level you need to support your mission.
Start with you, your board, your development committee, your staff, or your fundraisers to make a list of everyone you know who might even have the slightest interest in your mission. Show everyone in that group the list, and mark it with columns each for C, I, and A. For example, for I, does the person on the list show no interest in your mission, have a mild interest, or show great interest?
Then conduct a brief online search to collect additional information such as where they work and in what capacity, any interest indicators, other organizations they belong to, and other nonprofits they serve.
Notice that we haven’t yet contacted a professional prospect researcher. That’s because you can do much of the process yourself. Only after you get to the point where you are certain that there is some potential, perhaps even after your first meeting with a prospect, should you do an in-depth study on whether they would be interested in a deeper relationship with your organization.
Through a variety of online tools like prospect research databases, you can determine who in your network has the capacity to make a gift of the size you need, or who might have an affinity toward your mission.
Finally, be broad. You don’t know people’s history or interests. For example, you may not know that the mother of a highly successful business person had an alcohol problem. That makes that individual a good potential prospect for your substance abuse clinic.
Build personal relationships with major donors and prospects.
Once identified, you move to the engagement and cultivation steps.
In major gifts work, engagement is all about connections. Who in your network, or the network of your volunteers, knows the person and can make an introduction? Perhaps it’s for lunch at a club, coffee before work, or drinks afterward? You could get an introduction at a chamber of commerce mixer or an event for another nonprofit. The point is that this should be planned, not random.
Then, it’s up to you to evaluate their interest in your mission and invite them to get to know your organization and any particular projects you have in mind. They could be with a tour, an introduction to a program manager, a meeting with a client or mission recipient, or any number of dozens of activities.
The point of all of this is to build their interest—or their “I“—so that they can see themselves being a major part of the solution you’re trying to achieve for your beneficiaries. You are making them an insider, or a partner, in your organization through deep, interpersonal relationships.
Determine the targeted ask.
Ah, but how much to ask? Too little and they may not take your cause seriously. Too much and they won’t see themselves as part of the solution.
Unfortunately, there’s no secret formula to determine the perfect ask. But here’s what to consider in creating a strategic plan:
- Their enthusiasm for your mission and the specific project you are discussing with them. The more enthusiasm for your work, the more they will stretch to help you.
- Their gifts to other nonprofits. This may be your best indicator for a baseline. Consider that you should ask at least what they gave to a similar organization.
- Their position in your community. If they see themselves as a leader, they may be interested in showing that by appearing higher on your donor lists.
- Their assets and salary. Can you get this? Sometimes, yes. They may even tell you. A prospect researcher might find out if they own a high interest in a company. You can easily evaluate their home value online, and see if they have other properties as well. Sometimes, hobby assets are a good indicator of wealth. Boats and small aircraft are notorious money pits, so you need a certain level of wealth to afford them.
- Their life stage. Are they building a career? Have small children? Growing wealth? Retired? This is a major indicator of their relative assets and inclination to give. Someone with children may have school fees and other expenses that eat into their disposable income. Empty nesters, however, have shed much of their financial responsibilities and are ready to make major gifts to organizations like yours.
By considering a number (or all) of these elements when determining your exact ask, you set yourself up for an increased likelihood for success.
Show your appreciation and follow up with major gifts.
Stewardship is too often overlooked because once a gift is made, there’s pressure to find the next gift. This is short-term thinking. In long-term, sustainable fundraising, great stewardship will lead to the next great gift.
So what to do?
Number one, say thank you! Obvious, huh? Yes, but so often overlooked. And don’t stop at one. A handwritten note, a personal phone call, a visit (when you can do that), a small token gift, anything that recognizes that their gift was valued. Don’t forget to be prompt. If someone makes a gift that’s important to your mission, don’t wait to connect with them.
After that, keep them involved. This is probably the biggest mistake people make after receiving a gift. They gave because they cared, so show your donor the results of their caring.
Of course, depending on your mission, doing things like introducing them to your beneficiaries or whisking them off to the other side of the world may not be possible. Logistics and privacy concerns can get in the way. That’s where letters, photos, and videos from constituents can make a big difference. If you did your job to make them an insider, they’ll understand the issues in a real way.
In some cases, you’ll also want to create financial reports on how their gift was spent. You’ll likely know whether this would be appreciated by your earlier interactions with the donor. It’s also a great opportunity to engage your accounting staff in the fundraising process!
3 Things You Need For a Successful Major Gifts Program
Although there are certainly a ton of moving parts when it comes to managing an effective major gifts program for your organization (especially if you’re building it from the ground up!), these three things can really set your team up for success:
Effective Major Gifts Officers
In some organizations, being a major gift officer is akin to being a navy fighter pilot on the nonprofit aircraft carrier. It’s what many aspire to, and where most think the action is.
Fancy sunglasses, travel opportunities, and cool uniforms (err, nice suits) aside, an effective major gift officer has a difficult job. Contrary to mythology, they’re not all slap-their-back extroverts, either. They are able to interact with a variety of people and cultures and keep good records of their interactions.
Most of all, a great major gift officer is a great relationship builder. And not just one relationship. Dozens, each with its own nuances, and each at a different stage, all that lead to a gift to their nonprofit.
Some might think that this requires a measure of insincerity. Nothing could be further from the truth. It’s the major gift officer’s sincere commitment to their nonprofit’s mission that makes them the most successful. Their job isn’t about extracting as much as they can out of each prospect, or going for the easy “low-hanging fruit” gifts. A major gift officer works best when they discern the need of the donor and match it to the need of the mission.
A good major gift officer can pick up the signals and propose a gift that is a true win-win—for the donor and the nonprofit.
Powerful Nonprofit Software
Everyone is human, and to keep focused on relationships, it helps a major gift officer to have a solid donor database in hand. In fact, you could argue that a good database is the heart of every nonprofit’s fundraising program at every level—from direct mail and grant proposals to major gifts and planned giving.
Some business CRMs (or customer relationship management programs) can be adapted for nonprofit use. Yet a database tailored specifically for nonprofit fundraising (also known as a gift processing program or donor management system) enables the major gift officer to get a holistic view of the donor’s relationship with the nonprofit. The most important function of this class of programs is their ability to record and report on a variety of charitable contributions.
For example, few business CRMs can be modified to record multi-year pledges or the charitable gift amount from an event ticket purchase, properly report on gifts-in-kind, or provide present value calculations on planned gifts. Yet it would not be unusual for a major donor to engage in all of these kinds of giving over a short period of time.
Combine these features with the ability to record each step in a relationship, the traditional purview of a CRM, and the nonprofit gift processing program can be a very powerful tool for any major gifts officer.
Strategic Training Resources
Nobody is born a major gifts officer. Few people even imagined it as a career out of high school or college. So, while some people may have a natural inclination toward the best traits of a successful in-person fundraiser, education and training can make a significant difference in their success—and the success of their nonprofit’s mission.
It starts by knowing the basics of fundraising—CIA, donor profiles, the fundraising cycle, and more. It also helps to have a solid grasp of what your software can do so you can fully utilize its capacity to record and project relationships and identify new donors.
Keeping up with new methods of giving also helps. Every day new donors come into a major gift pool who are younger and more adapted to the technology of philanthropy—like peer-to-peer campaigns. A major gift officer can’t afford to say “that doesn’t apply to me, ignore these new methods.” Their donor will be disappointed that the expert they know can’t explain how their grandson’s school is raising money for their sports program.
Then, there are the changing tax laws. These aren’t just the concern of planned giving officers who work with retirement plans, gift annuities, bequests, and trusts. To be helpful to donors, you need to be up-to-date on deductibility rules, changes in how assets can be gifted, and more.
Perhaps the most important training someone can get is about how they make and maintain relationships. That’s all about knowing yourself. For example, there are studies on how one’s Myers Briggs profile impacts their fundraising approach. Knowing that about yourself and exploring similar ideas can make you a much more effective fundraiser altogether.
More than 70% of American philanthropy comes from individuals, and if you count what assets those individuals control among businesses, foundations, and bequests, that number may even reach the high eighties. Nonprofits who ignore major gifts from individuals are leaving a lot of philanthropy on the table.
And major gifts bring other rewards as well. The relationships built through major gifts bring community engagement, and with it, increased awareness for your mission. Major gifts are not just about big money. They’re about giving the people you serve the kind of services they deserve.
In other words, major gifts are about your mission at its best.
For more information on strategic fundraising and other nonprofit operations, be sure to check out these additional resources:
- Nonprofit Professional Development: Top Resources and Ideas: Professional development can take any career to the next level—nonprofit careers are no different! Take a look at these free and low-cost development resources to bring you and your own team to the next level.
- Building a Fundraising Strategy: Resources and Ideas: Any effective fundraising efforts start with a well-laid-out plan. Begin crafting that plan with ease by building a targeted fundraising strategy. These resources can help you do so!
- 29 Nonprofit Resources for Fundraising, Development, and More: Finding the right assets to train your nonprofit team of staff and volunteers can be a difficult and costly task. These resources from Nonprofit Courses can help you cover a wide variety of nonprofit-related topics.