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Cultivating major donor relationships can significantly boost your nonprofit's ability to achieve its mission and tackle large-scale projects.
When it comes to fundraising, every dollar counts - whether it’s a monthly contribution of $10 or a one-time gift of $1,00,000. These major gifts can be harder to come by. When they do, these gifts make up a vital portion of your funds, helping you generate maximum impact for your organization.
With major gifts, your nonprofit can tackle significant projects such as renovations or establishing new programs. This article will cover everything you need to know about the process of major donor fundraising. It will also discuss the steps to create a major gift program and effective strategies to optimize major gift-giving.
Major donors are individuals or corporations that offer the highest level of monetary or in-kind support to your nonprofit.
They typically represent about 10-15% of your donor base but provide a large percentage of your annual revenue, often 50% to 75% of total donations.
The definition of a "major donor" and the threshold for a "major gift" varies depending on your nonprofit's size and scope. To identify these key supporters, maintain a donor database that highlights your top contributors.
By nurturing relationships with major donors, organizations can significantly improve their financial stability and increase their impact. This allows for long-term planning, larger initiatives, and a more sustainable approach to achieving your mission.
What is a major gift?
Major gifts are the highest-value donations a nonprofit receives. The threshold for what constitutes a major gift varies by organization, depending on the typical donation amounts received. This threshold may evolve as the organization grows and its donor base expands.
Here's a simple method to determine your major gift threshold and identify major donors:
Create a list of all existing donors and donations from the past year
Highlight the largest donations at the top
Calculate the average of these largest donations
Based on this average, determine the minimum amount that will qualify as a major gift for your organization
For instance, if your top donations average $10,000, you might set your major gift threshold at $8,000. This means any donation of $8,000 or more would be considered a major gift for your organization.
The major gift fundraising process
The major gift fundraising cycle is a process your nonprofit can follow to identify, cultivate, solicit, and steward donors who can make higher contributions. It helps you pin down major donor prospects beyond your community of supporters and then leads them to become loyal and dedicated donors for your mission.
How to identify major donors in 6 steps
The first stage involves searching for and identifying potential major donors. This doesn't mean finding a new contact - it could be someone from your existing donor pool, too.
Here are ways to identify major donors for your nonprofit:
1. Explore connections with your board of directors
Your board consists of high-net-worth individuals who may have friends, peers, and contacts who are of similar means and might be interested in philanthropic activities. Ask your board members for referrals or a personal introduction to these prospects.
2. Use donor screening tools
WealthEngine and DonorSearch are two notable donor screening tools that help you identify donors who are likely to have the means to contribute. NPOInfo and GivingDNA allow you to delve deeper into your major donors.
3. Research existing donors
Using the insights from your nonprofit’s CRM, you can find people who are ready to make their first major gift. Zeffy's 100% free donor management solution helps you tag donors who reflect strong major giving signs based on behavioral data like form submission, event attendance, and more.
Participate in local and nonprofit events to identify potential donors who align with your mission. Focus on getting to know these individuals and building a rapport with them.
5. Analyze donors’ wealth capacity indicators
Wealth capacity indicators are essential for understanding a person's potential to make significant contributions to your organization. Some of the most common wealth capacity markers include:
Real estate ownership: Donors with more than $2 million in real estate are 17 times more likely to donate than those who do not. Do some research on the property ownership of your prospective donors to uncover major gift opportunities.
Political giving: Those who give substantial amounts to political campaigns typically have funds to contribute to your nonprofit. Information about political giving is accessible via the Federal Election Commission (FEC).
Stock ownership: Stock ownership offers insights into a donor's ability to contribute and a new way to collect donations. You can ask your prospective major donors to give stock to charity, also known as securities donation.
6. Assess donors based on philanthropic indicators
Philanthropic indicators highlight a prospect's interest in charitable work and specific causes. Some of the most common charitable markers include:
Past giving: Reviewing a potential donor's past history helps you determine if they support causes similar to yours.
Nonprofit involvement: Research your supporters' involvement with other organizations. Look for roles such as board member, trustee, or director in similar nonprofits.
Personal information: Your prospect's background can also determine their affinity for your cause. Check out their social media and other networking platforms to see what causes or missions they often engage with.
How to cultivate major donors effectively
The next stage is about building donor relationships with prospects so that they develop an interest in your mission. In this phase, prioritize getting to know your donors and giving them opportunities to know your organization.
Focusing on cultivation before directly asking for a major gift ensures that prospective donors feel they are a key part of your mission and not just sources of funds. Use Zeffy’s 100% free donor management software and start cultivating better donor relationships.
Here are some ways to cultivate relationships with each of your identified donors:
1. Schedule one-on-one meetings
Major gift donors require special attention and care if you want them to donate a significant amount. An in-person meeting is a great first step in making connections with your major gift prospects and introducing them to your nonprofit.
2. Extend invitations to fundraising events
Inviting them to your exclusive and high-end fundraising events will allow them to meet other donors and your nonprofit team. It will help these prospects form a complete picture of your nonprofit and what it does.
3. Organize a meet-and-greet with your leaders
Hosting a meet-and-greet with your board members, executive directors and other key leaders is another good way to introduce prospects to your team and mission.
With your leader's support, you make a positive and strong first impression, increasing your chances of securing major gifts.
4. Provide a first-hand experience
Major gift prospects would like to know that their contribution will be spent on worthwhile ventures. This strengthens a donor's interest in giving a substantial amount to your organization by getting a closer look at what you do.
Use the information gathered through wealth screening and prospect research to create a tailored proposal for your prospective major donors. Decide on a ballpark amount that would suit these prospects. Make sure that this figure is neither too high nor too low.
2. Set up a formal meeting
Schedule a solicitation meeting with your potential major donors. Make a clear case about your cause and impact. Share other relevant information to communicate the seriousness of your needs.
3. Prepare for negotiation
Enter the meeting prepared to answer questions and negotiate. Begin with your highest request, then be ready to adjust based on the donor's response and feedback.
4 strategies for major donor stewardship
The final phase is donor stewardship, where you thank supporters for their large donations and continue to build a positive relationship.
Maintain ongoing relationships with major donors to secure continued support for your mission and grow a community of committed donors.
The following stewardship ideas will help you retain major donors and develop stronger ties:
1. Express gratitude and show appreciation
Beyond a personalized thank-you message, express gratitude in person or send over a gift basket. Have your executive director or board chair call donors personally to show appreciation.
2. Keep major donors in the loop
Share an impact report that breaks down how your nonprofit has used donors' gifts or is planning to use them. If you've received major gifts to fund a specific project, provide your donors with regular updates on its status.
3. Offer different engagement opportunities
Invite your major donors to engage with your cause in other ways besides donating. Provide volunteering opportunities, share invites to fundraising events, or organize special events for these major donors.
Determine what you want to achieve with your major gift program. Break down your goals into specific, measurable objectives, such as the number of major gifts you will need to secure.
Ensure that your goals align with your nonprofit's definition of major gifts and are realistic.
2. Connect your mission to your program
Center your major gift strategy around your mission to engage donors emotionally. For example, if you're raising $1,000,000 for a new shelter, clearly illustrate how each major gift contributes to this goal and impacts lives.
Hope Always Foundation aims to provide pediatric patients in long-term care with 'Warrior Bundles'. Your gift will include a tablet, headphones, and backpack, which will directly support a child's comfort and education during their hospital stay.
Helping potential donors picture the major difference their contribution will make to your mission is key to unlock large donations.
3. Create a proposal with different giving levels
Asking for major gifts demands a high level of personalization. When creating your proposals, tailor the approach to address each potential major donor's needs and interests.
In your proposals, present your prospective major donors with different levels of charitable giving. For instance, if you're raising funds for a specific project, create a gift chart outlining different gift sizes and allowing prospects to choose their level of contribution.
Provide options for different campaigns or programs that their major gifts can support. This approach allows supporters to direct their contributions to the aspects of your cause that resonate most with them. Zeffy's 100% free donor management software enables personalized communication and detailed donor tracking, making it easier to align your asks with donors' interests.
4. Develop a major gifts team
Build a major gifts program team composed of supportive board members, prospect researchers, fundraising staff, and marketing members.
Having a dedicated team ensures that other fundraising activities and operations are not neglected. The team can also ensure that your major gift program doesn't face any setbacks because of a lack of resources or pressure on one person for the job.
Provide each member with a specific area to focus on to share the workload and enhance efficiency based on their unique skill set.
For instance, if someone has strong communication skills, let them handle the donor solicitation. If another member is good with details, let them be part of prospect research or donor cultivation.
5. Determine major donor incentives
When a major donor gives to your nonprofit, they want to see tangible results and some perks. Providing incentives for their level of major donations is a good idea.
For instance, if a major gift donor gives around $50,000 towards your $1,000,000 program goal, you can give them the opportunity to name the building they're helping create.
Communicate these incentives during your proposal so that prospective major donors know what they can expect and entice them to contribute.
6. Analyze your results and adjust your program
It's always a good idea to assess your fundraising program's results, including your major donor fundraising strategy. This helps identify future opportunities and areas for improvement.
Analyze performance by setting and tracking key performance indicators (KPIs) for your major giving program. These can include:
Program ROI
Number of gifts secured
Retention rate
Average donation size
Number of asks
Average giving capacity
These metrics help you understand the overall success rate and whether your approach needs to be changed.
For instance, if your retention is low, you may have to revamp your major donor stewardship strategies.
People like to be part of something special and unique. A major donor society is a member-specific club offering the exclusive kind of experience that they are looking for. It is made up of members who have gone above and beyond to support your organization.
You can decide a certain financial threshold for your major giving society. Donors can become members only when their donation meets that threshold.
Once part of the society, your major donors receive specific benefits such as tickets to an exclusive charity gala or naming rights to projects they’ve been a part of.
2. Host events catered to major donor acquisition
Special events for major donors don't necessarily have to be fundraisers. You can host events to acknowledge their major gifts or thank each donor. You can also organize one to simply network with your current major donors. Ask them to bring along interested friends, colleagues, or family members to the event.
Keep your event focused on your work, mission, and initiatives. Move around and try to engage in conversation with as many prospects as possible. After the event, send a major gift donation appeal to the attendees.
You can also give them a chance to contribute on the event day but don't focus too much on making an ask. Prioritize building relationships and strengthening ties.
3. Sign up for donor management software
Zeffy's 100% free donor management software offers powerful features tailored for major gift fundraising. Its user-friendly filtering and segmentation tools help you develop targeted major donor groups. With Zeffy, you can:
Personalize communication based on donor interests and giving history
These capabilities streamline your major gifts process, allowing you to focus on building meaningful relationships with your most impactful supporters.
Most corporations have a company gift-matching program. It is part of their philanthropic initiative, where they match their employees' gifts to charitable organizations.
Every company will have its own rules regarding the maximum/minimum threshold they match. Though they won't match the entire amount, they can still contribute a part of it.
Nonprofits should actively promote matching gift programs in their major gift fundraising strategy, highlighting the potential for donors to make an even greater impact with their contributions.
Finding, cultivating, asking, and stewarding major donors is a job all on its own. It is difficult to stay on top of each phase of a major gifts program and eventually secure larger donations.
A consultant or a consulting firm with experience in major gift-giving can do the major legwork with more finesse and expertise. They're well-versed in prospect research tools and stewardship strategies, which can be a great asset to your organization.
You can hire a consultant for specific tasks like wealth screening or to handle the program end-to-end. They help you develop an effective major donor stewardship plan for the long run.
Note: While appointing a dedicated major gifts officer is ideal, it may not be feasible for smaller nonprofits. In such cases, consider training existing staff in major gift strategies or seeking volunteer expertise.
6. Ask for a major contribution to specific projects
With a specific cause, you can create a sense of urgency and encourage major donors to contribute. Try to align donation requests with projects your major donors have shown interest in.
For instance, if a donor has recently expressed interest in your food bank, encourage them to focus their support there. This targeted approach works because it taps into the donor's personal interests and passions, making them more likely to give generously.
It also allows donors to see a direct connection between their contribution and its impact, increasing their satisfaction and likelihood of future support.
7. Give importance to mid-level donors
Many nonprofits ignore mid-level donors when soliciting major gifts. However, most of your major donors start giving at a lower level below your major gift threshold.
Event attendees, annual fund donors, volunteers or people who have engaged with your nonprofit on some level are often great candidates to move up the donor cycle - they just require a little attention and incentives to motivate them.
By creating a specific mid-level donor stewardship plan, you can build a solid relationship foundation to make the big ask.
8. Develop a major gift range chart
A gift range chart helps you decide how many gifts you need to acquire to meet your major gift strategy goal. It also helps you identify the number of potential major donors you must cultivate relationships with to secure larger donations.
With this understanding, your major gifts team can focus on reaching out to a specific number of top-tier donors. They can prioritize the candidates capable of giving the following amounts and direct all resources to secure donations from them.
While some major donors will want or may be able to offer major donations in the form of cash, others may prefer the option to donate in other ways.
Offer major donors various methods for contributing to your cause as it increases your chances of securing a donation.
Here are a few popular types of major gifts beyond cash:
1. Gifts of stock
This can include publicly traded stocks alongside gifts of mutual funds. Corporate and municipal bonds, treasury bills and notes, and stocks in privately held corporations are also forms of gifts of stock.
2. Major gifts of real estate
Real estate gifts include undeveloped lands and commercial or residential properties.
3. Donor-advised funds
Donors make contributions to a private fund administered by a third-party organization like Fidelity Charitable. They can then recommend grants from the fund over time to their preferred and qualifying charities.
A rapidly popular gift type, cryptocurrency is a hybrid of a digital asset and a currency. It can be used to purchase goods and services and be invested for long-term gains.
Case study: How Community Music School of Santa Cruz found a free solution in Zeffy
The Community Music School of Santa Cruz (CMS) has provided affordable music education for over 30 years. When their previous donor management system discontinued its free version, CMS sought a new solution.
CMS discovered Zeffy's 100% free donor management software, which not only replaced their existing system but expanded their capabilities. The impact was significant. Through Zeffy, CMS raised $47,664 and saved $2,383 in fees over 17 months.
By switching to Zeffy, CMS not only found a free alternative but also gained a comprehensive tool that enhanced their fundraising and operational capabilities, allowing them to redirect more funds towards their mission of providing affordable music education.
"I love the ability to quickly email people who’ve attended any one of our past events—it’s simple and the “from” line in the customer’s email is our name, so there’s no confusion." - Susan Willats from CMS
Conclusion on major gifts
You can't rush major gift-giving. There is a lucky chance that you will find a major donor prospect who will contribute straight away, but these chances are often few and far between.
Enter major donor fundraising with the knowledge that you're in it for the long run. This fundraising strategy takes a bit more time, planning, and dedicated efforts to yield results.
Even after you secure a major gift, you want to ensure that the donor keeps on returning and upping their gift size.
With Zeffy as your donor management system, take the hassle out of organizing your major donor prospects. Effectively find major donors, solicit donations and save time by automating stewardship activities like thank-you notes, reminders, and more.
The two major types of donors for nonprofits are individual and institutional donors.
Individual donors typically include philanthropists, community members, and those who contribute a large amount to causes they care about.
Institutional donors are organizations such as foundations, government agencies, and corporations.
Some notable examples of institutional donors include the Bill & Melinda Gates Foundation, Rockefeller Foundation, Carnegie Corporation of New York, and Pew Charitable Trusts.
According to the Nonprofit Impact Matters Report, the whole nonprofit sector generates over 80% of its revenue via private fees for services and government grants and contracts.
Over 80% of donations to nonprofit organizations come from individuals. That’s why it's crucial to cultivate relationships with individual donors and make them the central focus of your fundraising model.
There is no nonprofit industry standard for how much money is considered as a major gift. Each charitable organization must look at its own donation base and decide what it means to them.
For an older, more established organization, it can be any gift over $50,000.
For a smaller, newer nonprofit, it can be a gift of $1,000 or more.
The definition of a major gift ultimately depends on your organization's size and supporter base.
Securing a major donation for a nonprofit organization can vary significantly in duration. It often depends on several factors such as the relationship with the donor, the donor's decision-making process, the size of the gift, and the nonprofit's fundraising strategy. Generally, the process can take anywhere from several months to a few years.
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