Major Gift Fundraising: The 9 Essential Steps To Guide You

Published on May 31, 2024

Why is major gift fundraising so important?

The Pareto principle states that 80% of your results come from 20% of your efforts. In nonprofit fundraising, 80% of your donations and funds will come from 20% of your donors. 

Major gift fundraising is one of the most essential sources of funds for nonprofits. Despite its significance, many fundraisers hesitate to engage in this endeavor. 58.87% of nonprofits do not have a significant gift fundraising plan.

Reasons range from needing to be more confident negotiating a high donation amount to having the right contacts to make major gifts work for them. 

This is why we’ve researched the nine most essential steps for major gift fundraising. Whether you are a beginner or a professional refreshing your knowledge – there’s something for everyone.

The essentials of major gift fundraising

Focusing on donor cultivation with prospective major donors becomes more than just a strategy but a necessity for nonprofits seeking to thrive. The disproportionate impact of major gift programs on a nonprofit’s funds highlights the need for concentrated efforts, dedicated staff, and resources to work on it.

Securing major gifts is a delicate dance that requires a deep understanding of your prospects and developing meaningful relationships that align with a donor’s giving goals. This exercise is about gaining funds for your organization and helping a major donor realize their philanthropic goals, considering that major gifts are a significant portion of their wealth.

Defining your major gift

The definition of major gifts varies from one organization to another. What constitutes a major gift for a small, community-based nonprofit may differ significantly from that of a large, international organization.

43.74% of nonprofit organizations consider $1000 as the minimum donation amount in their fundraising metrics for major gifts. However, each organization is different, and while $1000 can mean quite a bit to a smaller nonprofit, another more prominent, international one might determine that $10,000 is too small an amount to consider for major gift fundraising.

However, the impact of such gifts is undoubtedly substantial. They can help a nonprofit’s major giving program fund future projects, improve infrastructure, secure critical operations, and expand staff.

To determine what can be considered a major gift for your organization, a practical approach would be to look at the median amount of the top 25 most significant donations received over the past five years. This figure can provide a benchmark to define a major gift for your nonprofit, serving as a motivational goalpost for your team and a clear target for prospective donors.

Setting your major gift threshold

Once you set the major gift threshold for your major gift fundraising program, you set the tone for the fundraising strategy and goals. You need to determine a benchmark that showcases what significant donations to your organization look like.

To do this, create a gift range that visually communicates your major gift fundraising goals, making it easy to convey the need for a substantial donation to prospective major donors.

major-gift-fundraising-gift-range

While some donors may be put off or be unable to donate an exact substantial amount, say $5000, a gift range such as $1000-$5000 may help them determine the best major gift prospects for them.

Start with prospect research.

Donor prospect research helps you identify major donors who can contribute to the gift amounts you raise. You will get a good idea about donors who can participate in your major giving program based on critical indicators such as wealth, education and income levels, and past donation history.

One way nonprofits can also identify major donors is through major donor prospect research tools. Investing in a donor database can speed up your major gift fundraising process by quickly identifying donors who can contribute to your gift-giving program.

In the digital age, prospect research tools such as WealthEngine and DonorSearch are a boon to finding donors. These tools cut down on research time and allow for more strategic cultivation of relationships with potential donors, considering factors like age, location, income level, and past giving history. They analyze existing data to determine the initial engagement and long-term donor cultivation solicitation and stewardship opportunities.

Here are two more ways to go about your donor prospecting:

Convert existing donors to major gifts program

The best place to start donor prospecting for major donors is by looking at your current donors.

By evaluating their past donations, financial capacity, and engagement with your cause, you can determine donors who would be excellent for your major gift fundraising program. Recognize donors with a deep and meaningful relationship with your organization, a history of more significant donations, and a passion for your mission.

These people have the most profound trust and belief in your organization and will likely be the first to donate large amounts to your organization.

Read Also: 11 Best Donor Prospect Research Tools To Help You Collate Valuable Insights With Ease

Uncover new prospective major donors through wealth indicators

You can discover new major donors through set wealth indicators.

Wealth indicators include:

  • Real estate ownership
  • Business affiliations
  • Past philanthropic giving
  • Board memberships

Investigating wealth indicators can open doors to individuals with the financial resources to make a considerable impact but may still need to be added to your radar. As millennials’ wealth accumulation and propensity to give grow, they are more and more likely to fit the bill for new major gift prospects.

These indicators signal wealth and an alignment with charitable causes that resonate with your organization’s mission. Referrals from board members and other key stakeholders can also be a goldmine for sourcing new major donor prospects, adding a personal touch to the prospecting process.

Build your major gift fundraising story.

The cornerstone of soliciting major gifts is a compelling story for support that touches the hearts and minds of potential donors. It’s about presenting a narrative that:

  • Educates donors on your nonprofit’s mission
  • Showcases its impact
  • Promotes financial transparency
  • Appreciates the invaluable contributions of existing supporters

To resonate emotionally, you must highlight the project’s significance to the donor, connecting their values to the cause they are being asked to support.

Clarity and specificity are your allies in this endeavor. Donors need to understand precisely the difference it will make. Instilling a sense of urgency and detailing the needs are critical in fostering trust and encouraging immediate action from potential donors.

Developing your nonprofit’s annual report.

Your nonprofit’s annual report is more than a summary of the year’s activities; it is a strategic storytelling tool that can ignite the interest of major donors. It should include:

  • A well-defined mission statement
  • A recap of significant achievements
  • Detailed financial information
  • Recognition of major contributions

It is all presented in a visually engaging format. By personalizing the annual report to highlight the specific impact of donors’ gifts, you can nurture relationships with major donors and attract further investment from new or existing supporters.

The report is a testament to your nonprofit’s accomplishments and a beacon for future aspirations. It demonstrates accountability and impact, key to retaining and inspiring major donors to continue their support.

Craft the perfect donation pitch.

When it’s time to make your next big ask, preparation is paramount. A compelling case for support must:

  • Align with your organization’s branding
  • Communicate the critical nature of the campaign effectively

This involves crafting a draft script and being adaptable enough to deviate from it when it is necessary to connect with the donor more personally.

Understanding the optimal timing for major gift asks is another critical factor. Researching the donor’s previous giving patterns and being attentive to the timing and approach can distinguish between an awkward conversation and a successful solicitation. Equipping representatives with specific ask amounts and pertinent information to the donor ensures that the first impression is impactful and memorable.

Hire a major gift fundraising officer.

You do not want your major gift fundraising program to be an afterthought. You want someone dedicated to securing crucial funds for your nonprofit. This is why you need to hire a major gifts officer.

The role of the major gifts officer includes:

  • Being the architects of donor relationships
  • Crafting strategies to engage potential donors who can make significant contributions
  • Communicating effectively and listening actively
  • Soliciting donations that can make a substantial difference to the organization

These officers are pivotal in the tapestry of major giving, significantly contributing to the cause.

Only some nonprofits may require a full-time major gifts officer, but having an individual dedicated to this role is invaluable for those with more significant or more specialized needs. A major gifts officer should have:

  • A deep understanding of the organization and its targets
  • The ability to navigate the fundraising landscape
  • The passion to successfully drive efforts to fruition.

This expertise is crucial for a major gifts officer to be successful in their role.

Appointment and responsibilities of a major gifts officer

This individual’s key responsibility is to identify and categorize prospects into tiers based on their giving capacity and inclination, allowing for a more targeted and efficient approach to fundraising.

A spirit of collaboration is also essential. The major gifts officer’s role is not just about soliciting funds; it’s about cultivating meaningful connections that extend well beyond a single campaign.

Determine the proper communication channels for your major gift fundraising.

Understanding how to communicate with your donors is crucial. Reaching them where they are increases your likelihood of converting them.

A multichannel approach to reaching major donors is the best way to ensure diversification of your outreach. It addresses individuals who prefer to be reached via personal phone calls, text, and email communications.

Some communication channels through which you can reach donors are:

  1. Face-to-face conversation at your organization
  2. Personal phone calls to build relationships with major donor prospects.
  3. Text messages for sharing donation links, reminders, and announcements
  4. MMS for sharing engaging audio, video, and image content.
  5. Letters for donation appeal.
  6. Social media posts to reel in your digital crowd.
  7. Your nonprofit’s website is soliciting donations.

The major giving program blueprint

A major giving program is an essential blueprint for nonprofits aiming to secure substantial financial support. Yet, an astonishing 58.87% of nonprofits lack a defined strategy for major gifts, often due to limited resources in workforce and expertise. A successful major gifts program is crafted with consideration of the organization’s history and donor capacity, setting achievable and challenging targets that align with the broader strategic goals.

Key personnel, including the executive director, development director, and major gifts officer, are integral to leading and implementing these efforts. They ensure the major giving program is in sync with the nonprofit’s mission and strategic vision. A gift range chart can serve as a practical tool in this regard, helping to categorize donation levels and set objectives for donor contributions.

Structuring your major gift program

The framework of a major giving program has a structure that:

  • Identifies potential major donors
  • Cultivates relationships with them
  • Solicits donations 
  • Stewards and maintains relationships with donors

Each team member plays a distinct role in this process. By setting achievable targets and considering the nonprofit’s operational capacity, the program can be crafted to guide the organization toward its fundraising aspirations.

Strategic tools like annual reports can also be leveraged within the program’s structure. They showcase past achievements and outline future goals, assisting in retaining and attracting support for the program. Integrating donation levels with corresponding benefits into the program structure is another strategic approach to acknowledging and motivating major donors.

Documenting the process

An organized and well-documented major gift program is the backbone of successful fundraising. It ensures that every interaction with major donors is tracked, providing invaluable insights into the evolution of each donor relationship. This is where an organization’s CRM system becomes an indispensable tool, allowing for effective tracking of interactions with supporters and prospects and managing the cultivation process efficiently.

The correct documentation and forms are equally crucial for managing major donations. This preparedness facilitates a smooth transaction and instills confidence in donors that their contributions are handled with professionalism and care. By documenting the major giving process, nonprofits can ensure consistency and reliability, which are essential for building trust with donors.

Enhancing donor stewardship and relationship management

Enhancing donor stewardship and relationship management is about:

  • Deepening the bonds with those who have shown their commitment to your cause
  • Consistently communicating with donors
  • Expressing genuine appreciation for their support
  • Providing feedback on the impact of their donations

The goal is to build personal relationships that transcend transactional interactions, creating a foundation for long-term engagement and continued support.

Creating a donor stewardship plan

A donor stewardship plan outlines a nonprofit’s approach to engaging with donors after they have donated. It’s a commitment to not just saying thank you once but continuing to show the impact and value of their gift over time. Maintaining detailed records of interactions in the CRM helps monitor the evolution of the relationship and track the progress of donor cultivation, ensuring we cater to details.

Expressing gratitude can take many forms, including:

  • Recognition walls
  • Personal calls
  • Exclusive events
  • Handwritten letters

Each of these acts of appreciation shows donors how much their contributions are valued. A stewardship matrix can assist in scheduling and customizing communications, ensuring each donor receives thproperht engagement at the right time.

Seeking donor feedback is also crucial, as it helps refine donor relations strategies and ensures that the nonprofit meets its supporters’ needs and preferences.

Measuring success and continuous improvement in major gift fundraising

Measuring success in major giving is not just about tallying dollars raised; it’s about evaluating the effectiveness of each element of your fundraising strategy. By tracking key performance indicators, nonprofits can gauge the health of their major giving program and identify areas where they can improve. Some metrics to consider include:

  • Return on investment
  • Gifts secured
  • Average gift size
  • Average giving capacity

Continuously identifying trends in these metrics is essential for pinpointing areas for improvement. This may involve enhancing prospect research methods, increasing targeted ask amounts, or refining the donor cultivation cycle. Evaluating recurring donors and the accuracy of targeting helps refine a major giving strategy to achieve better results in future campaigns, ensuring that the nonprofit remains agile and responsive to changes in donor behavior and contributions.

Read Also: 6 Easy Steps to Craft the Perfect Donor Cultivation Plan

Evaluating major gift metrics

Evaluating major gift metrics is a critical component of a successful fundraising operation. Key performance indicators (KPIs) such as return on investment (ROI) help nonprofits understand the financial efficiency of their major giving programs. Donor retention rates, another vital metric, provide insight into the long-term viability of the donor base and the effectiveness of the organization’s stewardship efforts.

Identifying opportunities for growth

The landscape of philanthropy is ever-changing, and so, too, should be the strategies for major giving. Nonprofits must periodically reevaluate their major gift criteria to align with evolving donor behaviors and economic conditions. Factors such as global events and economic shifts can influence donor capacity and willingness to give, necessitating adjustments to fundraising strategies.

By doing so, nonprofits can ensure that their fundraising operations continue to evolve and succeed.

Avoiding common pitfalls in major gift fundraising

Successfully soliciting major gifts is as much about preventing missteps as it is about executing well-planned strategies. Here are some common pitfalls to avoid:

  1. Failing to demonstrate a clear and tangible use for contributions can leave donors uncertain about the impact of their gift.
  2. Neglecting to build relationships with donors before soliciting their support.
  3. Nocorrectlyly researching and targeting potential donors results in wasted time and resources.
  4. Failing to follow up and steward donors after they have made a gift.

Building relationships is the cornerstone of donor engagement and should always precede and inform the solicitation process.

Gratitude for past donations sets the stage for future requests and should always precede specific asks in major gift solicitations. Fundraisers must be prepared for any outcome and approach each solicitation with professionalism and dedication to the cause. The effort and care put into well-edited nonprofit documents can significantly influence donor impressions and underscore the importance of a project.

Learning from mishaps

Learning from past solicitation efforts and donor relationship mistakes is essential for refining future fundraising strategies. When making a significant ask, it’s crucial to base the request on a prospective donor’s known giving capacity, ensuring that the amount is realistic and within their ability to give. Including all necessary decision-makers in the solicitation process, such as family members or business partners, can also increase the likelihood of a successful outcome.

Understanding why a donor says ‘no’ to a major gift can offer valuable insights that help refine future strategies. Each refusal provides a learning opportunity due to timing, the amount requested, or a misalignment with the donor’s interests. Fundraisers can consider asking for a more modest contribution at the time or plan to return with another major request in the future.

Following up with a donor after a refusal is respectful and opens the door for future interactions and potential support.

What’s next after major gift fundraising?

As we’ve navigated the intricate pathways of major gift fundraising, it’s clear that the journey is both a science and an art. From understanding the essentials and defining what constitutes a major gift for your organization to building relationships and crafting compelling cases for support, the strategies outlined here are designed to lead you to outstanding results. If you are ready to begin your outreach to major donors, we suggest you start by learning about the 5 Strategies for Engaging Major Donors.

This article is written with the help of AI.
Featured Image Source: Monstera Production