For small nonprofits, it can be difficult to determine the most strategic way to spend limited resources on fundraising. Among these organizations, annual giving appeals and fundraising events are popular because they can raise more money in a short period of time. But there is absolutely no reason why a small nonprofit shouldn’t focus on raising major gifts.
Why? Because major gifts are the most efficient form of fundraising out there. Major gifts have a Cost to Raise a Dollar (CTRD) ratio of 15 cents to raise $1.00 (compared to 35 cents and 40 cents for direct mail and events, respectively). But receiving major gifts takes time and perseverance…and lots of it. A successful major gifts program does not focus on high net-worth individuals without a connection to your organization. In fact, you probably already know who your major (current and potential) donors are.
Also, major gifts are often thought of as elusive multi-million contributions cloaked in mystery. The reality is that there’s no magic number for a major gift. They are whatever amount makes the most sense for your donor base. A major gift may be $1,000, $10,000 or $100,000. Regardless of the amount, statistics show it makes “cents” (pardon the pun) for smaller organizations to focus on major gifts.
Here are a few ways to start or ramp up a major gifts program:
Identify your current and potential major donors.
To start, dig through your donor database and analyze your individual annual gifts from the last few years. Look at the largest gift you’ve ever received. That is your major gift floor. Expand your lens to see who are your largest 10-15 donors. Then, look at your next largest concentration of large donors. The typical range of mid-level gift size is $500-$9,999.99. Middle donors are a good starting point because they often self-select high annual gifts to you with little effort on your part. Their generosity often comprises the majority of your revenue. They also have higher donor retention rates than your smaller-level donors.
Select a small group of donors and really get to know them.
Major gift fundraising is relationship fundraising at its best. It’s focused on learning about your largest donors’ interests and values and finding ways to align them with your nonprofit to receive transformational gifts. With a small staff, you will want to keep your donor portfolio small (25-30 people is a manageable starting point) so you can devote the staff and volunteer time to building relationships with them.
Find ways to bring your current and potential donors closer to you.
A key way to inspire major gifts is to bring your nonprofit’s mission to life for your donors. That means hosting personal visits with staff, your CEO and volunteer leaders, as well as program site visits, small cultivation events with strong post-event follow-up, and quarterly or bi-annual teleconferences with your CEO to provide a programmatic update. You want your donors to see and feel part of your success and results.
Individual donors, especially major donors, want to make a difference in the world. It generally takes 12-18 months to get to the point where a major solicitation is the right next step in your donor relationship. As you get to know your donors’ interests and giving priorities, work to upgrade their annual gifts to larger levels. You may also present smaller initiatives that, while not a transformational five, six, or seven-figure commitment, still help further your mission.
Launching a major gift program can be daunting. Just remember to stayed focused on these two words:
Inspiration: Your nonprofit does good work. Sharing that work with the right people will inspire them to give.
Investment: Major gifts are not just donations. They are transformational investments tailored to meet a person and nonprofit’s shared dreams.