Your organization needs money. Big money. The kind of money you can't raise by going out and asking for donations of $10, $20, $100, or perhaps even $1,000. Maybe you need the money to expand your services. Maybe you need it to build a new wing. Maybe you need it to match the largest grant you've ever been awarded. Maybe you need it just to stay alive.
Raising big money is a different proposition from chasing down contributions to the annual fund. Let me draw an analogy. Money is the sustenance that nourishes an organization. Just as food nourishes our bodies, money keeps the organization alive, healthy, and growing. It is the lifeblood.
The great majority of us get our food in restaurants a meal at a time and from grocery stores a bag or two at a time. That's not unlike what we do in most of our fund-raising efforts. We go after small money --- enough to keep us going for a cycle. That cycle can be measured in time --- a few months or a year. Often it is measured conceptually --- a specific project or program.
Raising big money is more like growing our own food and then preparing every meal from scratch. That means we'd have to clear the land, plow the ground, plant the seeds, cultivate the crops, harvest the yield, and store it. And that's if we're vegetarians. I don't even want to think about what I'd have to do for a steak.
The point I'm trying to make is that raising big money, like producing all your own food, requires planning, preparation, hard work, patience, and time. Big money is raised by soliciting and receiving major gifts.
Let's begin with what makes a gift "major." For me, the answer is simple, and it is not stated in dollars and cents. The amount of money that comprises a major gift depends on the organization. There are non-profits for which $1,000 would be the most major of gifts, and there are those for which a donation of $10,000 would be hardly a blip on the radar screen. But the definition of a major gift is the same for both.
A major gift is any gift so large that its size:
1. Is of a different magnitude from the organization's usual range of gifts
2. Has the potential to have a significant impact on the organization.
Major gifts come from major donors. If an organization does not have the attention of people and organizations capable of making large gifts, then it simply cannot expect to receive them. But attention alone isn't enough. Every non-profit needs to also have the interest of potential major donors.
Small gifts result from people believing in a non-profit's good works. They are gifts of support. Major gifts result from people committing to an organization's vision. They are gifts of investment. They are the ones investing in your future when they make gifts to capital projects, and they even invest in "perpetuity" when they make gifts to your endowment campaigns. Finding such investors is the key to successfully soliciting major gifts.
Are You Prepared to Go after Major Gifts?
The bedrock of my fund-raising philosophy is the following statement: "Successful fund-raising is simply hard work on the part of the thoroughly prepared." Preparation may not be everything in a major gifts campaign, but without it you will fail.
Remember those great old movies with Mickey Rooney and Judy Garland? The ones in which the "kids" had a money-raising dilemma that perplexed and perplexed them. All of a sudden Mickey would light up with youthful exuberance and optimism. He'd turn to Judy and say, "I know, let's put on a show! We can do it!" An hour later, after a liberal dose of movie magic, they've staged a production worthy of Broadway, the problem is solved, everybody has had a good time, and Mickey and Judy are in love.
There are non-profit organizations that operate in much the same way. Faced with the dilemma of a growing financial need outstripping static resources, officials of those organizations will turn to one another and say, "I know, let's put on a fund-raising campaign! We can do it! We'll get some big gifts and solve our problems!"
Unfortunately there is little movie magic in the non-profit world. Too often the campaign fails, the problem is still there, nobody has a good time, and love isn't exactly what the campaign managers are feeling for one another.
It's not that fund-raising campaigns aren't the answer, or that an organization shouldn't go after large gifts. The problem is that, unlike Mickey's and Judy's show, no campaign is likely to be the first or only time an organization has reached out to donors. Any campaign, including one relying on major gifts, has to fit into the context of an overall development plan.
The General Development Plan identifies how and from what sources an organization will acquire and maximize contributed income. Specific fund-raising campaigns must then be planned and carried out in accord with it.
Every non-profit must plan and prepare for the times when it will need to seek major gifts. If an organization's fund-raising begins and ends with annual appeals for smaller gifts that support its annual operating budget, it will not be ready to reach out for larger donations. You simply can't turn the big-money faucet on and off at will.
Let me stretch that water faucet analogy a bit. Nobody gets in the shower and then turns the water on. The water is turned on first and we wait for it to warm up before we get under it. Soliciting major gifts is the same. If, out of the blue, you ask someone for a large gift simply because that person is capable of making one, the response you'll get is likely to be about as warm as the water that first flows out of a showerhead. We need to "warm up" major donors before we can expect the dollars to flow. That warm-up is the process of donor cultivation and an organization must have a strategy to carry it out.
Donor cultivation is an organization-wide strategy and process to learn more about donors so that we can better initiate and respond to contact with them in order to develop stronger relationships. It is crucial that any organization intending to embark on a solicitation effort for major gifts understand the need for a strategy and then be prepared to implement tactics for cultivating relationships with potential large donors.
Major-Gift Philanthropy Begins at Home
Let's get this out in the open right now. An organization isn't likely to find major donors from out of town. No matter how tempting it is to look for new sources of revenue outside your service area, don't. That's because money usually stays close to home. Don't expect it to come to you from distant individuals, foundations, or corporations that knew nothing about your organization before they were solicited for a gift.
Looking for distant benefactors is the longest of long shots when it comes to individual donors, and corporations almost never give to an organization if they do not have employees in that organization's service area. While some foundations are non-geographic in their granting policies, they usually support only exceptional programs that can be replicated elsewhere.
No matter how frustrated you may become with soliciting donors who are geographically near or who have a preexisting relationship with your organization (alumni for example), do not fall into the trap of looking elsewhere. While it is possible for a distant benefactor who knows little or nothing about an organization to give support, such an occurrence is truly the exception to the rule, and a rare one at that.
The money is not greener on the other side of the fence, and time spent looking for distant benefactors will yield less support than time spent at home.
The Board of Trustees
No place is closer to home than an organization's board. Board members are, or should be, an organization's first source for major gifts. Some should be able to make major gifts. Others should be able to influence donors capable of doing so.
However, it is not advisable to base board membership only on an imperative to "give-or-get" major gifts. While every board member must give something, not all members of a well-balanced board are likely to be able to make major gifts. Nor are all those who themselves cannot make a major gift likely to be able to influence large donors. On the other hand, a board that does not have members of sufficient wealth or influence to deliver major gifts is not a well-balanced board.
Board members should be rated and evaluated in the same way as other donors and then solicited strongly. Soliciting board members is the job of the board president, not other board members. The president is the person who recruits most board members, and each therefore has personal accountability to him/her or at the very least, the office of the president.
Board-member donations should account for at least 20 percent of the funds for an annual campaign and an even higher percentage of endowment, capital, and other major gifts campaigns. If this is not the case with your organization, look at the giving records of board members at similar organizations. If that data shows giving levels higher than yours, use it to encourage your board members to do more.
Identifying Potential Major Donors
Any fund-raising campaign, including those relying on major gifts, begins with a question every organization, new or old, must ask at the outset: Who cares about us and why? Make a list. Then ask the second most important question: Who on this list cares most about the purpose of this campaign and why? Never are these questions more important than when an organization is conducting a campaign that will rely on major gifts.
Donors, especially major donors, almost invariably fall into one of
1. Those who are personally touched, inspired, or motivated by the organization's programs and services
2. Those who, while not personally touched by an organization, are influenced and impressed by what it does
Individual donors can fit easily into either of those categories. Foundations and corporations fall almost exclusively into the second group. However, it is possible for the people recommending or approving grants to have been personally touched by an organization.
Those who directly benefit from an organization are most often users of its programs and services, or their family members are users. Hospitals always put former patients high on their list of potential donors. Schools and universities have entire departments devoted to alumni relations.
At the Cleveland Orchestra, we collected the names and address of everyone we could who purchased tickets. Even though these folks were paying dearly for their seats, many of them became significant donors. As a group, they would contribute as much as 40 percent of a campaign goal.
Every organization should have a database of users that it prospects for donors. Even if the organization serves a clientele unlikely to be able to make major gifts, those clients may lead to surprisingly large donations.
One of the first organizations I ever worked with was Big Brothers of Greater Cleveland. At the time it served more than 500 boys who did not have fathers at home. The boys' mothers weren't able to give much, but we did a little research and discovered that more than ten percent of the women were employees of a local utility. Our funding request to the utility pointed this out and came complete with endorsements from many of those employees. The gift we got was far larger than the utility's usual contribution.
When you are looking for prospective major donors, you need to research your existing donor lists relentlessly. To do that you need to develop profiles of each individual donor who contributes on a regular basis. Not all contributors to the annual fund, for instance, are equal in their ability to give. But you won't know which are capable of giving the most unless you have a system of profiling your donors. Also, a person contributing $50 to the annual fund, may be in a position to influence larger gifts. He or she may actually work at a foundation or corporation.
For the most part a major gifts campaign needs to concentrate on individuals. Most successful fund-raising campaigns receive 70 to 80 percent of their money from individuals. Unlike corporations and foundations individuals are able to make a decision on the spot and to direct their money to as many or as few recipients as they want. Individuals are the most flexible and spontaneous givers, and this is true in spades when it comes to large gifts.
The larger the request made to a corporation or foundation for funds, the more involved and drawn out the solicitation and decision-making process is likely to be. A solicitation presentation is made to a corporate contributions manager or foundation program officer. The non-profit then has to rely on that person to present the case to one or more committees.
This makes the solicitation process with corporations and foundations more remote. A lot can be lost in the translation as you deal with stewards of other's money. All of this makes it harder to base an appeal on key emotive factors, such as compassion, that resonate well with individual donors. Individuals also derive personal pleasure and reward from the giving experience in a way that no steward of someone else's money can.
Major gifts campaigns do not succeed without an identified base of prospective donors capable of making large gifts. A non-profit organization contemplating such a campaign needs to have an established relationship with nearly all of those prospects. It also needs to be committed to raising the majority of the money from individuals --- not corporations or foundations.
How to Find New Major-Gift Prospects
Let's make a some assumptions. First, you're in charge of fund-raising for a non-profit that plans to go in search of major gifts. Secondly, you don't have enough solid prospects in your constituency to meet your needs. Third, you have a year before you need to begin the solicitation. What can you do?
You can start making some new friends for your organization. Begin with its acquaintances. Remember part 1 of our description of where major donors come from: "Those who are personally touched, inspired, or motivated by the organization's programs and services." Go over your list of clients/users with a fine-tooth comb. Make sure that you have identified everyone with a connection to your organization capable of making a large gift or influencing one.
At the same time explore prospects likely to fall into part 2 of our description: "Those who, while not personally touched by an organization, are influenced and impressed by what it does." Look at the people who support other organizations similar to yours.
Go over those organizations' annual reports for lists of donors. Usually, those lists will be segmented by the size of the gift. Make your own list of everyone who has made large gifts to those organizations, but has not made a similarly sized contribution to yours. Some of those people will already be on your donor list as small givers. Immediately start a process of intense donor cultivation with them. Again, I encourage you to go to the white paper on Building Donor Loyalty to learn more about this process.
For those with whom you have absolutely no relationship, you need to begin a process of introduction. Use your board members and other volunteer leaders for this.
First, bring the board together in the equivalent of a rating and evaluation meeting. Only this time, you will be trying to identify individuals who can introduce the new prospects you have identified to your organization. You are looking for the one person from among your involved, active supporters for each prospect who has the best chance of getting that prospect's attention. Maybe the person will be a close friend. Maybe someone with whom the prospect wants to develop a relationship.
Whatever the case, find that person and then have him or her introduce your organization to the prospect. Once a new prospect has been introduced to your organization, begin the process of donor cultivation.
If for any reason you are unable to identify either organizations similar to yours or individuals who have made sizable gifts to those organizations, then widen the ring of organizations whose donor lists you will prospect. For example, if yours is the only dance organization in the community, you need to reach out to everyone who made a major gift to all performing arts organizations. Then add all arts and cultural organizations. Then, all education organizations, etc.
The point is that you will find your new major givers from the rolls of people already making major gifts. Until you have exhausted all avenues of research with known major givers, you should not be looking for new, novice, givers.
Caring For the Needs of Major Givers
Earlier, I said that small gifts were gifts of support and major gifts were gifts of investment. An organization needs to be prepared to handle this difference as it reaches out for major gifts.
If I send you $50 as a contribution to your annual fund, I am not expecting much in exchange. I just want you to continue doing what you are already doing and to use the $50 wisely.
On the other hand, if I give you $50,000, you can bet I am going to be asking for more in return. First of all, I will see that gift as my investment in your organization, and with investment comes a sense of ownership. At the very least, I'll be looking for:
Any Organization would do well to think of major givers as partners in its endeavors. Some of those partners will want to be very active. Others will be silent by nature. Your job is to understand what these "partners" want and then deliver it while all the time trying to increase the depth of their relationship with your organization so that they will be there with their next major gift when you need it.
In order to do this your organization must be donor centric in its outlook. An organization becomes donor centric when it recognizes donors as its lifeblood and makes their care a central aspect of its endeavors. It may take some adaptation and education to make your organization donor centric, but doing so is crucial for developing a major-givers program. For more on the donor-centric organization read my article The Importance of Being Donor Centric which is part of the white paper on Building Donor Loyalty.
Key Factors to Keep in Mind
When It Comes to Finding Major Givers
First and foremost is the need to prepare today to implement tomorrow's major-gifts campaign. Sooner or later your organization is going to need to look for big money. It will not find it, unless it has brought itself to the attention of persons and organizations capable of making major gifts and cultivated a relationship with them.
Never forget that each non-profit organization must prove to those who support it the value to the community of the good works it does, and the efficiency with which it delivers them. One-person shops, organizations that are totally volunteer driven, grass roots organizations and multimillion-dollar organizations are all alike in this. No nonprofit is entitled to support. All have to earn it over and over. Major givers will judge an organization in part by how hard it works to prove its value.
No one can deliver major gifts to an organization. It has to deliver them to itself. Hiring a consultant to run a major-gifts campaign is not the answer. Hiring consultants to help your organization become donor centric and to develop strategy and tactics for donor cultivation can be.
An organization that communicates desperation is unlikely to succeed in attracting major gifts. People do not want to give their money to an organization that they perceive to be stressed beyond its ability to carry out its mission well.
Strangers almost never give to such an organization. This is particularly true when it comes to large gifts. You have to get to know your potential major givers and they have to get to know you.
And finally --- major gifts begin with the board. If an organization does not have board members capable of giving and influencing major gifts, that organization will never be able to undertake a major-gifts campaign. An organization that does not have wealthy folks on its board is unlikely to be able to sustain growth. Like it or not, money is as important a leadership factor in the non-profit world as vision. An organization must have both.
Tony Poderis was for 20 years to 1993 Director of Development for The Cleveland Orchestra and its Summer Home, Blossom Music Center. He was responsible for Cleveland's largest annual institutional fund-raising campaign. Since 1993, Tony has been a fund-raising consultant serving all non-profit institutions' needs to develop and to maximize their potential to raise Annual, Endowment, Capital, and Sponsorship & Underwriting funds.