Many small organizations protest that they don’t have donors of major gifts, that they don’t know any “rich people.” I believe that every organization that receives donations from individuals has major gift donors, or at the least, major donor prospects — gifts don’t have to be the six-figure variety to be major.
The two key ingredients to a successful major gifts program are, in fact, donors with disposable income, and a stewardship program that maintains/enhances the relationships between your organization and those donors.
First, there are three questions that must to be addressed:
- What is a major gift? It is any gift over the amount that separates the top 5% to 10% of your donors, from all the others.
- What is a small organization? Using only annual income as a measure, in Canada this income figure is $50,000 (just over 50% of Canadian charities have an annual income of this amount).
- What is stewardship? There was a long discussion on this topic on Charity Channel late last year; I have chosen to define it, for purposes of this piece, as “caring for and nurturing donors.”
Donors are most likely to think of your organization when you reach out and touch them. Ignore them from one year to the next and they will take their philanthropic interests to another organization that looks after them.
Let’s assume that an organization has 500 donors who make gifts in the annual campaign in the range of $10 to $250, and that the gift that separates the top 10% is $125. The first question I would ask is “Can we manage a program for 50 individuals?”
A more manageable option may be to look at the top 5% or 25 individuals (who, in this scenario might give more than $175 a year). In other words, don’t give yourself and your volunteers more work than you can reasonably manage.
The following suggestions are based on the assumption that all the stewardship activities are likely to be carried out by the one staff person (the Executive Director) and a group of volunteers.
- Each donor will get a personalized thank you letter from the staff member; it can be based on the information in thank you letters sent to other donors, but it should recognize their special contribution.
- The President will send a hand-written thank you note, in legible hand writing!!
- If someone on the Board knows the donor personally, a telephone call to say, “Thanks,” is appropriate.
- An article in the newsletter will describe in some detail what the collective donations have accomplished.
- Find out as much as you can about these donors: learn about their family and what their hobbies and interests are.
- Talk to others who may know these donors to expand on this information; then, when you come upon an article on their special interest, clip it and send it to them with a brief note (a sticky note will do) that says something like “I know you enjoy whatever, and thought this might interest you.” Send it even if you think they will have seen the piece; they may well have missed it and it certainly tells them that that they are more to your organization than a cheque book.
If there is a milestone in the family – the birth of a child or grand-child, a wedding or special anniversary, a promotion – send a card or note of congratulations. Perhaps this task could be given to a volunteer.
- Make sure these donors are invited to your Open House, or as guests to an event. At the $175 gift level, you can’t afford to give them one or two free tickets if the event is expensive but if the tickets are modestly priced, send two. (Keep in mind the regulations about donor benefit for a gift.) Editor’s Note: It might be possible, if people other than donors are invited as guests, that there would be no tax consequences to the donors of receiving “free tickets.” If the Open House is advertised in the newspaper or your newsletter, have volunteers call each of these donors to extend a personal invitation to attend.
NOTE: having volunteers make phone calls has an added benefit for your fundraising program: many Board members are not willing to get involved in any kind of fundraising where they have to ask people for money. Asking them to phone donors to extend a personal invitation or to say thanks for a gift will gently ease directors into contacting donors to ask for a gift.
They will discover that donors like to talk about the organization and may have questions that they want answered. In time, the volunteers will find that asking a donor to support a cause or project that they are already supporting is actually quite easy.
Provide the volunteer callers with a script to increase their comfort level at the outset of the process. It will not take the volunteers long to discover they can do very nicely on their own and they will soon discard the script.
- If your organization can afford to host a small and short private event for these donors, arrange a modest one once a year. Hold it at the office or a project site. The hospitality need only be tea and cookies or whatever is appropriate. The most important part of the event is what you do when you have the group gathered together. Make it a Show and Tell; have examples of the results of what their money bought; if it is not possible to have clients, show examples of their accomplishments or samples of their work. Your President should speak about the value of these donors and express the gratitude of all for their generosity.
Donor recognition is an important part of a stewardship program:
- Send the thank you letter within 48 hours; don’t wait for the donor to find out the donation has been received when he checks his/her monthly bank statement. If the tax receipts are prepared in batches, send the thank you letter without the receipt. When the receipt is ready to be sent, here is another opportunity for the donor to be thanked by somebody — Chair of the Fundraising Committee perhaps?
- The donors will be identified in the newsletter.
- Donor clubs can be implemented; in addition to the Gold, Silver and Bronze categories for annual gifts, consider a “longevity” club: the following donors have made a gift every year for the last twenty or ten or five years. It is a good way to encourage donors to keep giving on an annual basis.
- If you have the capacity (software and personnel) to track cumulative giving, you can also recognize donors who have given in excess of $x,xxx since their first donation. This recognition strategy requires very careful record-keeping. Many donors will accept the challenge of “if you could give $xxx this year, you’ll be recognized in the $x,xxx club.”
The desired outcome of a major gift stewardship program would be more money. But it won’t happen overnight. Donors must feel that they are appreciated and valued, and that their gift is being used wisely. Only when this comfort level is well established will they be ready to consider larger and more frequent gifts.
Much of my work as a consultant is with smaller community-based organizations, that usually don’t have enough staff or time. However, the lack of time and money should never be an excuse for ignoring the generosity of donors, especially major gift donors. I see too many situations where donors are taken for granted and even a simple thank you seems too great a task.
Many churches are of the opinion that their parishioners don’t want money “wasted” on a thank you letter; surely a church can afford a photocopied letter addressed to Dear Friends to be included in the envelope with the tax receipt, especially when the members of the congregation are invited to pick up their envelope at the back of the church after the weekly worship service!!! This is “taking for granted” at its worst.
Have I mixed major gift stewardship in with some suggestions for recognizing annual giving donors: YES!!… because it is from your annual giving program that many major gift donors will emerge. It is a rare donor that will become a major donor to a charity on the occasion of the first gift. Most will test the water to see how they are treated.
The whole major gift process is about building and nurturing relationships — getting to know and respect the donors and keeping them in touch with your organization. And even the smallest organizations can have a major gifts program.