How to Focus Your Efforts on the Most Likely Major Gift Donors
By Matt Wasserman
We are going to get technical for this article. Are you ready!?!
At MPW Strategies we spend a lot of time thinking about major gifts - why donors give them, why they don’t, and how organizations can secure them more effectively and efficiently in a quicker timeframe.
Let’s start with what is a major gift. We feel it’s a significant decision for the donor. This includes having family members involved in the decision-making process along with a financial advisor and even attorney. This means that a donor making a major gift is not going to tie her gift to your fiscal year end. She is also not going to make this big decision based solely on your organization's need.Instead, the major gift donor decision-making process is typically driven by:
- The people at the organization
- Giving to opportunities and not deficits
- Relationship-oriented: depend heavily on social and professional networks
- Making a positive impact
- Being captivated by a big idea
Taking all of the above into account we tend not to consider regular/annual gifts as major gifts (no matter the size), nor do we usually consider event sponsorship. Additionally, a donor may make a five or even six-figure gifts through an auction or paddle raise, a crowdfunding campaign, or a spur of the moment decision.
All of these are wonderful gifts creating impact, and we don’t want to take away from the hard work of development professionals and the commitment and generosity of the donor. We do want to raise the idea that if these people were engaged in a much more significant way driven by the connection to your organization and the impact they want to make, the giving will increase dramatically.
With this in mind let’s take a look at the donor funnel that we developed to demonstrate the donor journey, points of engagement, and how to focus your efforts on those most likely to make a major gift.
The below funnel describes five levels of engagement a donor could have with your organization. On the left side are the traditional steps taken in building relationships with donors from the ask and acknowledgment. In the middle of the funnel are the levels of engagement a donor might have with your organization. On the right side of the funnel is the length of time it can take to engage donors, and the touch points required to build their involvement.
Moving a donor can be a time-consuming resource intensive process. The data we studied (and our experience) suggests to move someone from the stage of just getting involved in your organization to where they are completely bought in can take up to four personal visits and 18 touch points over 1-2 years. It’s a lengthy process taking skill, planning, and strategy to realize a donor’s first major gift or maximize his/her continued giving.
Where you should spend your time
When it comes to major gifts, one essential element is where to spend your time and focus your efforts. Your time should be spent with those that are the most engaged with your organization and have the highest affinity. They should also have a high capacity (wealth indicator) but not necessarily the highest. Nor are these people necessarily the donors giving the most to your organization. Focusing on donors’ previous gift amounts as an indicator of major gift prospects, say $5,000 and above, is a major flaw, and you will lose sight of your strongest major gift potential.
Why is this? As you can see from the giving funnel it takes a substantial amount of time to connect those that are not as engaged with your organization. Someone who might be very wealthy and made what you feel is a major gift ($10k or $25K) and is just “testing” your organization, is not a ready prospect. By all means, take the $10k or $25k and do great things with it! We would maintain that with the right engagement this person could give 10x that first amount.
Start the major gift process with those that are genuinely engaged with your organization. Wealth is important, but the donor’s level of engagement is much more critical. If you start with those that are very connected to your organization, you can cut the length of time in half to bring major gifts to fruition.
Wrapping it up
So, there you have it! It’s a matter of where you spend your time and with whom. Securing major gifts, of course, does take a lot more than that, including having a compelling vision, understanding the donor’s interest in your organization and where she wants to make an impact. Not to mention a trust that has built, peer approval, confidence in your organization to execute against its mission and vision, and financial stability. With that in mind when it comes to raising major gifts would you rather spend your time with people that are ready to make them or with those that are just beginning to understand your organization!
These are just some of the ways in which you can begin to improve your major gift efforts, and I invite you to comment on other ideas and experiences that you feel would be effective.
If you would like to learn more about improving the way your organization raises funds, please contact me at firstname.lastname@example.org.
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