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Major gifts play a significant role in the fundraising success of many nonprofit organizations. The larger your nonprofit, the larger the gifts you can expect to receive—that is, of course, if you have a plan in place to cultivate and steward key donors.
The Pareto Principle, also known as the 80/20 rule, states that roughly 20% of causes lead to 80% of the effects. In the context of nonprofit fundraising, the “cause” is the donor, and the “effect” is the funds they provide. This means that a significant portion of funds raised by an organization often comes from a small percentage of its supporter base.
Effective major gift fundraising focuses on cultivating relationships with that 20% of donors. In this guide, we’ll explore six smart strategies to drive major giving success for large nonprofits.
1. Use prospect research to identify major donor prospects.
Nonprofits often use prospect research to gather and analyze information about potential donors. You’ll typically focus on areas such as:
- Wealth data. This includes financial indicators like income, assets, property ownership, stock holdings, and more, which can provide insights into a prospect’s capacity to give.
- Employment data. An individual’s employment history, current position, and professional networks can shed light on their workplace giving potential.
- Giving history. A potential donor’s past contributions to your nonprofit and others can reveal their likelihood to donate and provide a benchmark for expected giving levels.
Use these insights to tailor your engagement strategies and ensure that your team’s time and resources go to the individuals most likely to contribute significantly, increasing the return on investment (ROI) of your major giving efforts.
2. Establish specific major giving levels.
Many major giving campaigns include predetermined giving levels tied to unique and exclusive benefits that encourage participation. Often, nonprofits set their giving levels by identifying what they already consider a major donor and setting specific goals for how they would like to increase their major gifts.
While the perks and parameters will vary from one organization to the next, here’s a sample major donor rubric:
- Bronze level (e.g., $1,000 – $4,999)
- Recognition in annual report or website
- Invitation to exclusive events
- Subscription to a donor impact newsletter
- Silver level (e.g., $5,000 – $9,999) - All benefits of Bronze, and:
- Inclusion on donor wall
- Invitation to VIP experiences
- Gold level (e.g., $10,000 – $24,999) - All benefits of Silver, and:
- Special recognition at events
- Private meetings with organizational leadership
- Platinum level (e.g., $25,000 and above) - All benefits of Gold, and:
- Exclusive access to high-profile events
- Unique collaboration opportunities
Giving levels provide a useful framework for how you’ll steward and recognize your major donors. Plus, they drive increased generosity through social proof (“Other donors are contributing this amount, so I will, too.”) and tangible incentives (“If I give $X, I’ll receive this exclusive reward!”).
3. Enlist the help of board members and their networks.
Your board members play a crucial role in nonprofit governance. Some may even be major donors to your organization. But their involvement doesn’t need to stop there—they can also help your fundraising team uncover major prospects within their own networks and serve as advocates for your cause.
Several resources your board members can leverage to identify prospects include their:
- Alumni network
- Social media contacts
- Work colleagues
Since your board members already have an existing investment in your purpose, they can be some of your greatest assets for identifying major gift prospects. Furthermore, their financial support demonstrates their commitment to your cause, which sets an excellent example for other donors.
4. Prioritize corporate philanthropy and workplace giving.
According to Double the Donation, companies donate an average of $20 to $26 billion to nonprofits each year. When soliciting major gifts for your organization, don’t forget to tap into corporate giving opportunities.
Workplace philanthropy allows eligible donors to get their gifts matched, doubling the impact of some major gifts and pushing other mid-level contributions into the major giving category. Additionally, learning where existing donors work (whether through prospect research or using a matching gift tool integrated into your fundraising platform) can help uncover potential corporate partnerships as well.
For example, if you notice that a large number of your supporters work for Microsoft, you may decide to reach out to the company and pitch a direct sponsorship opportunity. This would allow your nonprofit to raise more for your purpose and offer the company and its employees a way to give back to their community.
5. Consider hosting a capital campaign.
A capital campaign is a fundraising campaign that aims to collect significant revenue, or capital, for a key initiative. The purpose is often tangible or material, like a new building, renovation project, or equipment purchase, and it’s often primarily funded through major gifts.
Hosting a capital campaign, when relevant, can be an excellent way to engage major supporters above and beyond your standard annual fundraising efforts. That said, this kind of campaign is an extensive undertaking, so before diving in, it’s important to ensure that your organization has the large-dollar support to back your efforts.
Keep these fundraising best practices in mind to ensure your capital campaign’s success:
- Send out regular updates to donors in their preferred communication channels
- Track all of your campaign progress data in one centralized location
- Frequently express gratitude to your supporters.
When approaching a capital campaign, nonprofits typically begin with a feasibility study that gathers input from key stakeholders, such as major donors, to gauge their willingness to support the campaign. If it’s a go, you’ll enter the private phase of your capital campaign, which is generally where your major donor engagement comes in.
6. Promote opportunities for legacy and planned giving.
Legacy and planned giving present a meaningful opportunity for major donors to provide financial support at a future date. These types of gifts typically include:
- Bequests, or gifts made through a will or estate plan that will be made to a nonprofit upon the donor’s passing.
- Charitable trusts, or legal arrangements that designate a trust’s remaining assets to be given to a nonprofit at its termination.
- Endowment funds, or invested assets with the purpose of generating income to support a nonprofit in the long term.
- Retirement account designations, or designating a nonprofit as a beneficiary of a retirement account, such as an IRA or 401(k) plan.
- Life insurance policies, or designating a nonprofit as a beneficiary of a life insurance policy.
These gifts empower donors to make a difference beyond their lifetimes and provide your nonprofit with the funds it needs to continue advancing its purpose.
Since legacy and planned gifts can be a more technical type of support, it’s beneficial to share educational materials on the topic, provide access to or recommend financial advisors for donors to consult with, and conduct personalized discussions about their options.
Leveling up your major gift fundraising
Implementing smart engagement strategies can go a long way toward driving major giving success. From personalized solicitation efforts to leveraging data-driven insights, think of these strategies as your roadmap for optimal major gift fundraising results!
This article is a contribution from our friends at Double the Donation.