Photo by Ben White

Investing in your Major Gifts Program

Cultivating serious financial investments by your donors takes time and authentic relationship building. Investing in your development department builds the capacity to invest in the donor.

A few things to keep in mind when setting up your major gifts program involve realistic expectations of how development staff spends their time.  When staff participates in meetings, this takes away from the critical time of spending time getting to know donors.  

It is also important that leadership and fundraising staff have very clearly defined expectations when it comes to deliverables. Leadership should participate in setting goals, providing support, and determining what resources are needed to be successful, but leave the “how” to the professional development staff. 

Your donors have options. They may work with you directly or with a community foundation when it comes to investing major dollars in the community.  Due to recent changes to the tax structure, more donors are taking advantage of vehicles known as DAFs – Donor Advised Funds. 

A donor-advised fund is like a charitable investment account, for the sole purpose of supporting charitable organizations you care about. When you contribute cash, securities, or other assets to a donor-advised fund at a public charity, like Fidelity Charitable, you are generally eligible to take an immediate tax deduction. Then those funds can be invested for tax-free growth and you can recommend grants to virtually any IRS-qualified public charity.

Donors make a gift by transferring assets to a community foundation and then make several gifts from the established fund. Because of the simplicity, many donors will do this instead of setting up a private foundation to disburse funds. Donors can set up these funds with a reasonable amount of money – about $5,000 in many cases. 

However, if donors do not want to spread out the term of disbursing their donation and wish to do so in a lump sum, donor-advised funds are not the best route. Instead, they will opt to determine the recipients of their gifts and if you have a solid major gifts program, your donors who wish to pursue this option are excellent prospects.

These individuals most likely already know a lot about your organization through social media (if you have been actively putting information out on the digital landscape) or possibly even know someone who has used your nonprofit’s services.  The key is providing a concrete reason to give.

Do not make the mistake of thinking that someone who has been identified as wealthy but has yet to donate to your organization is a prime major donor.  If the individual has not yet donated to your organization, they are unlikely to donate a large amount even with the most compelling of cases.  They have to share some belief in your mission to be a good prospect. As always, it is key to have total buy-in for the major gifts program across the organization: leadership and staff.  

Prospecting takes a lot of time to get to know your donors and build a relationship.  CauseVox offers this overview of that cultivation path:

1: Qualify Donor– Ensure they meet prospect criteria

2: Research Donor Interests– Research past and current philanthropic affinities, check donor notes in your CRM for any suggestions on passions.

3: Direct Mail Outreach– Acknowledge your donor’s history with your organization, and tell them you’ll be following up to schedule a meeting

4: Phone Call/Email- Schedule the meeting and confirm the donor’s interests

5: Send Targeted Marketing Materials- Use the donor’s preferred communication methods to send heartwarming stories of impact and any other inspirational donor materials.

6: In-Person Meeting- Meet at the donor’s preferred time and location, such as over coffee, at your office, or in their home. Talk about key clients and community impact.

7: Ask-Present major donors with an offer to support a specific program or initiative, either during step 6 or at a later date.

8: Thank- Thank your new major donor.

9: Follow-up Meeting- A month or so after your major donor gives, follow up on their experience. Ask if there are any other ways they’d like to get involved and give them the name and contact information of a point person in your organization who they can reach.

The bottom line is that fundraising should always be a relationship-based activity, not transactional. As you start – or grow – your major donor program, be sure to be organized and authentic. This will lead to engaging the people to support your mission and who have a vested interest in making an impactful investment in your important work in the world.

Resources

Boosting Major Gifts Is A Matter Of Timing

What is a donor-advised fund?

Donor-advised funds sidestep tax constraints

4 Major Donor Cultivation Best Practices In Today’s Connected Economy

Growing your Major Gifts

Dedicating staff time to a major gifts program is an investment of time and energy that is well worth the effort. Not only does it generate more financial investment in the good work of your nonprofit, it also provides an opportunity for your biggest fans to engage on a more meaningful basis.

The key is to use thoughtful planning to set up and grow your program. You need to provide your staff with the support and tools to be successful at it.

In a recent article by The NonProfit Times, the writer of the piece offered several important directions that point to a successful program that came out of the book, The Ask: How to Ask Anyone for Any Amount for Any Purpose by Laura Fredricks. As always, time management and thoughtful goals were part of that list but equally important, planning for the less-than-favorable outcome is a necessary conversation. By evaluating those potential problems, organizations can be prepared and focus time on building donor portfolios.

Another key strategy: always articulate how much staff are valued in their efforts. Last fall, I shared thoughts about the future of our development staff and the importance in recognizing expertise shown by these key employees. As you grow your major gifts plan, one of your biggest assets is your development employee who is managing the program.

Since changes to our tax system have been implemented, the face of major gifts is also different as more donors are setting up donor-advised funds. Many of these investment accounts established for charitable giving are often managed by community funds. There lies an opportunity to develop a new rapport with that funding arm. Donna Jackal of The Rochester Business Journal recently offered some great insights to this shift, especially with regards to the ease of setting one up.

All in all, creating an opportunity for community members to make more meaningful contributions to nonprofits still remains one of the top pursuits in growing your individual giving revenue and with it, a chance to re-frame opportunities that serve both the charity and the donor.

RESOURCE LINKS

https://www.thenonprofittimes.com/fundraising/boosting-major-gifts-is-a-matter-of-timing