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Janet Levine

About Janet

A Primer on Major Gifts

In this article, we’ll be focusing on major gifts – that tier above the annual fund and below estate gifts. Before going further, though, let’s drill down a bit on what, exactly, constitutes a major gift because if we don’t, we’ll have fuzziness in deciding whether it’s a large annual gift or a bona fide major gift. Keep in mind that, on the one hand, we are talking about calendar; on the other, about amount.

Let’s assume that in your organization, a major gift is one that is $5,000 or above. And every year, I give you a $5,000 gift.

Am I making an annual gift? A major one?

Both, you might say. But I would disagree. Any gift I can give you year after year after year is certainly not major to me. And if we’ve learned anything at all about fundraising, it is that success happens when we put our donors and their needs, beliefs, passions first.

So yes. That amount is a threshold above which a gift may be major and below which it certainly is not. But major gifts are so much more.

In my new language of fundraising, I would call major gifts “transformative” — gifts that have an ability to change your organization or a program within your organization. According to Merriam-Webster dictionary, transformative means “causing or able to cause an important and lasting change in someone or something.” And this is exactly what a major gift must do.

A major gift should be what I call an “and” gift. It is that special support one makes in addition to the yearly (annual) gift. It is for a specific purpose, or to honor a particular person, or perhaps to receive a recognition that is important to the donor. It is a gift that is singular, extraordinary. It is not your regular gift but one that is made occasionally — or perhaps even just once. It is large, and it may be paid out over a period of years.

Getting a major, transformative gift is both like and unlike getting any other charitable gift. As with all fundraising, it is a process that starts with identifying and learning about prospective donors. It moves to doing the things that will interest and involve them in your organization. At some point, you ask for a gift, and if they say yes, you thank them. And then it starts all over again.

When gifts are small or somewhat automatically received, the process speeds up. The time between identifying prospects — which often simply means pulling a list from your database, with or without segmenting groups — and soliciting them can be a matter of weeks. For true major gifts, it is frequently a matter of months; often of years.

Prospect Research

Identifying prospects for major gifts means research. We start with arm's-length research — the research you do (or have someone else do) at a distance from the prospect. It’s the wealth screening, the internet searching, and — for those who are already engaged at least somewhat with your organization — the data mining you do in your database. You are looking for these signposts :

  • Loyal donors; those who have given to you regularly for a number of years
  • People who, sometime in the not-so-distant past, made a very large gift
  • People who inexplicably increased their annual giving
  • People whose first gift is larger than the average gift you receive
  • People who reside in certain ZIP codes

Armed with these names, begin your research about them. Prospect research can be complex, time-consuming, expensive, scientific even. However, do not lose sight of the purpose of prospect research — it is to help you to get to know as much about your prospect as possible, so you can help her (or him, or them) make the best possible gift — for you and for them.

Start with the internet. Look them up; learn as much as you can. Then find out what your inner circle knows about any of these folks.

Your inner circle is your staff — who often have a wealth of information we never, ever tap into. Don’t make that mistake. And of course, your board.

I can hear the groans and see the eye-rolling. But note, I am NOT suggesting that you go to your board and say, “Give me ten, seven, three names.” I am saying that you bring a list of people (not too many at a time) and ask them to tell you who they know and what they know about those they know. Don’t forget to ask who they know OF, and why they know of them. And finally, who else should be on this list?

While the best prospect is someone who is connected to you already, you do always have to refill your pool. And yes, you need to ask your board members to help you identify prospective donors. This alone makes the case for never, ever putting anyone on your board until that person has made a significant contribution to your organization. That doesn’t always have to be money — but it does have to be more significant than helping you get the centerpieces for your gala made. If they are not already sold and passionate about what you do, they will never be a great ambassador and certainly never become an asker for your organization.

It also makes a strong case to ensure that your board members are well connected. I would rather have a board member with many tentacles into the communities I want to reach, than one who has money but no connections. Both, of course, are the ideal.

Beyond this, there is the usual way we find out who may be of interest. A few weeks ago, I went to a dance performance. The friend I went with smiled knowingly as I immediately turned to the back of the program to see who was listed as a supporter.

“You don’t DO fundraising anymore, Janet,” she said. But old habits die hard.

Old habits also include face-to-face networking — showing up at places where the people you think have the capacity and might have the interest in supporting your organization will be. Then engaging in conversation, exchanging cards. And then following up. That, alas, is where it too often falls apart.

You got the names, and you have done the preliminary research. So now you sort by who seems to have the most money and go out and solicit them! NO, though I have to tell you, I see many fundraisers do just that. In truth, you are only at the beginning.

Now you must qualify. That is, are they truly a prospect for you? And if so, are they a major gift prospect, for those will require time and energy and because at least the former is limited, you want to make sure you are expending it wisely.

Are Wealth Indicators Present?

First , you are considering wealth indicators — which, to the best of your ability, you have already gathered. If I own property in an expensive ZIP code, I probably rate more than if I rent in a not-so-desirable one. If I have a job that probably pays really well — a partner in a large law firm; a senior manager at a public company; the CEO of a company that has assets exceeding $100 million — I’m rated higher than the someone with a job that probably brings less income. Do I donate to political parties or PACS? Am I a big donor to other nonprofit organizations? These are the things you find out from a variety of websites — and from what your staff and board members have told you. Those with high capacity get moved to the top of the list.

Now you rate their level of commitment and willingness to be cultivated and solicited for a major gift. This means looking at their affinity to your organization. This usually involves personal knowledge of the prospect. There are three distinct ways to get this information:

  • Gleaned from information gathered over the years; this can work well if the prospect has been a consistent donor at a major gift level and has interacted with staff, who has documented those interactions.
  • Screening and rating by board members and other leaders of your organization. These can be done in groups or individually.
  • A qualifying call or visit, but you may want to wait a minute for this one.

What Stage of Life?

Next consider where in life they are. People today are always going on about millennials, but I remember when the conversation was all about how the boomers were so different from the greatest generation — and we were NEVER going to be as philanthropic.

While I don’t want to take anything away from millennials, what I find more important is the stage of life of our donors.

Top Candidates

Those most likely to make a major gift now will include those who are at the very top of their careers or reached that pinnacle and are now retired. They also:

  • Don’t have children or if they do, their children are adults and self-sufficient. Can I tell you how much more disposable income my husband and I have now that our kids are out on their own and doing well? And yet, how much we try to help with the grandkids?
  • Are single or their spouse is healthy (or deceased). The cost of taking care of a sick or impaired partner can be devastating. It can also make the healthy spouse feel a greater need of hanging onto income with the thought that “this could happen to me.”
  • Clearly have wealth and are at the point where they are ready to dispose of (at least a large portion of) it. These are the people you want to be talking with about what they want their philanthropic legacy to be — not just as they think about gifts from their estate, but also from the gifts that they are giving now.

Middle-Tier Candidates

Just below those are prospects at the height of their careers or who will be inheriting a great deal. Caution here: It is unwise to count those chickens before they hatch. Still, these are donors you want to be cultivating for the long term. While they are not ready yet for that major gift, they should be populating your midlevel donor and prospect pools.

Their children are starting their own families. Young children — yours, your grandchildren—are expensive! We all talk about the cost of college, but wise families start saving for that many years before the children are even in high school. Remember that major gifts are a long game; keep talking about their goals, and where you can, help them to move closer to achieving them.

In a nutshell, prospects in this group are accumulating wealth but are not yet disposing of it.

Least Likely Candidates

The least likely major donors are young. We know that many of today’s young people want to be involved and give — often randomly — to many different organizations. Good ways to capture this population is with ongoing, hands-on activities. But they probably are not major gift prospects now or for the near term, for these reasons:

  • Their children are home and at the age where they need lots of attention.
  • They are midlevel career-wise. Many are building their resumes—so do think about a Young Professionals Council to help you figure out how best to engage—and keep on engaging—their peers.
  • They are often supporting their parents. Enough said!

Now that you have a ranked list of people you want to focus on this quarter, you still have another important qualifying step — and that is the qualifying meeting or meetings, sometimes referred to as the discovery call. This is the first step of what is sometimes called cultivation.

We talk about the cycle of fundraising which starts with prospecting and then moves on to cultivation, which too many have decided means we bombard them with information about US. Instead, think about nurturing your prospects — and you cannot do that unless you know a lot about them. Not their wealth but their values; their passions; what matters to them. And by and large, the only way to find out about that is to talk with them. Note, I said WITH not TO. And the best way to do that is via conversation.

Of course, before you can have those conversations, you must get in front of (or next to) your prospects.

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