The Art of Recognizing Your Next Major Donor

They Are Closer than You Think

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Just what is a significant gift? And who are major donors?

That seems to be in the eye of the beholder.

Some charities consider a gift of $500 or more to be major, while others only see a major contribution when the check is at least for $100,000. A tiny number of charities are fortunate enough to hold out for $1 million before declaring a major gift.

Unfortunately, even though almost any charity should pursue major gifts, however defined, many do not spend enough time or invest enough money in getting them.

A survey by Bloomerang (2015), a donor software provider, showed that fewer than 20 percent of charities have even one person designated explicitly to pursuing and cultivating major donors. 

To be fair, many charities spread the responsibility for major gifts around to many people, such as the board chair, the executive director, and the development director.

Most small nonprofits don't have the human resources to specialize the way an institutional nonprofit or a large national one could do.

The Bloomerang survey also found that however a charity defines a major gift or designates the major gift responsibility, only about 40 percent of them have a major gifts strategy. 

Consequently, many nonprofits are merely missing out on one basket of income in a world where many baskets are needed to fulfill their missions. 

It may be that many charities don't understand what a major giver is. They imagine a wealthy tech tycoon or a hedge fund CEO. In reality, major donors of the more modest variety are all around them. 

In fact, the best source of a major gift is a donor you already know. Great donors often go undetected because they don't look or act like we think a big donor would.

Yet some of the most generous donors have been unassuming, like the proverbial millionaire next door.

Try looking at your donors in a new way, and you might find quite a few donors who could give a good size gift.

Anthony Powell, the author of a chapter in Major Donors: Finding Big Gifts in Your Database and Online, suggests three indicators that you should look for as you size up your donors.

  • Identify a Donor's Capacity
    • Capacity is usually the deal breaker for major gift prospects. Gauging a donor's ability helps determine the gift range you might consider. Ask yourself these questions about your major gift prospects:
      • How much is the donor worth and how much can he or she give?
    • What is her income, what investments does he have, and what assets do they hold?
    • What are their financial obligations? Perhaps they are already committed to large gifts to another organization or have business debts.
  • Identify a Donor's Inclination
    • How generous is this donor? How involved in civic affairs?
      • Do they give to charities and are they involved with organizations with a similar mission to yours?
    • Are their interests and hobbies in line with your mission and programs?
    • Do they volunteer or serve on the boards of organizations like yours?
  • Identify a Donor's Linkage
    • The importance of linkage can't be overstated. The Bloomerang study found that those nonprofits that pursued major donors started close to home with their current engaged donors already in their database. The second largest source for major donors was wealthy community members, and the third source was wealthy philanthropists who had given to similar causes.
    • Powell suggests that starting with a current donor who already has a relationship with you is not only easier but also the most productive.
    • Look at your database and ask these questions:
      • Are these donors consistent givers? Do they have a high lifetime value?
    • Have they or their families been the recipients of your services? Are there other ways that they are involved with your organization?
    • Do they volunteer? Go to your events? Evangelize to others about your organization and mission?

    Powell points out that prospects that score high on all three of these indicators -- capacity, inclination, and linkage -- should get your full and immediate attention. Prospects that are deficient in any one area might be more suited to the annual fund or even left unsolicited. 

    As Powell says, "Bill Gates may have the world's highest capacity rating, but if he has no linkage to your organization and no inclination to give to your cause, is he really a viable prospect?"

    Sources:

    Major Donors: Finding Big Gifts in Your Database and Online, Ted Hart et al., Wiley, 2006.