Guest Writer | J.A. (Tony) Myers, MA, LLB, CFRE

Ah, “major gifts” the dream of every charity: a reality for those most successful in developing meaningful relationships with major donors. Consider this: 

• In a University of Toronto $1.2 B campaign which ended after the turn of the century, over 97% of the money came from 3 % of the donors
• In a recent $80 M campaign held at SAIT in Calgary clearly 97% of the money came from 3 % of the donors. 

A couple of things seem evident.  First, the majority of the money came from what the two organizations would obviously call major gifts. Second, the 80 / 20 rule does not apply in the examples given.  You know, the rule that says 80% of donor income comes from 20% of donors.  It seems that when it comes to major gift solicitation the rule no longer applies.

And it begs the question.  If 97% of money can come from 3% of donors in the form of major gifts, and if I don’t have a major gifts program in my charity, then am I missing something?  The answer is yes.  Let’s talk about major gifts.

What Are Major Gifts For?

Many of us dream about the major gift that comes into our organization and al­lows us to operate worry free for several years.  The “undesignated” gifts that al­low us to operate worry free for several years are very rare indeed.  Gifts that are not destined for a specific purpose and usually used for general operating ex­penses generally come to us as a result of annual appeals.  Though some chari­ties may have been fortunate enough to get major gifts that are “undesignated” and can be used for general operating funds, the majority of major gifts are “des­ignated”.  Designated gifts are those assigned for specific uses within an organi­zation and are most often (though not exclusively) directed for uses in program delivery.  That does not mean that charities will not be successful in acquiring gifts that are designated in areas such as capital construction and general oper­ating – it is however more common for donors to want to give to programming areas.

What Is a Major Gift?

A major gift differs in size and scope from charity to charity.  What might be a major gift in one organization may not qualify as a major gift in another. Much depend on the charity, its stage of development, and the stage of evolution of its fundraising program.  For the University of Calgary, a major gift may be a gift from an individual in excess of $10,000 per year, or one from a corporation in excess of $100,000 per year.  For a smaller organization like the Alberta Mentor Foundation for Youth (AMFY) a major gift might be anything more than $250 per year from an individual and anything more than $1,000 from a business, foundation or corporation.

So, you see, it depends on the organization and the stage of development of the organization.  So what about your organization?  What is a major gift with your charity?  And what if you don’t have a major gift program, how do you get started?

1.    Getting started – Developing a “prospect list” and identifying those most likely to give to your organization or those most likely to give more to your organization is the best starting point.  This step is called identification.

2.    Learning more about your potential “Major Donors” or prospects – Prospect analysis leads nicely into prospect research and lays the foundation for qualifying potential donors and allows you to make a preliminary determination of who is most likely to give.  Qualifying your prospects.  (See the section on Linkage, Ability and Interest on page 8 in Chapter 13 of this manual which).  This step is known as qualification.

3.    Getting to know those most likely to give – Getting to know potential donors in a process known as “cultivation” is probably one of the most enjoyable aspects of major gift fundraising.

4.    Asking those most likely to give – At some point along the way, somebody on your team has got to ask for money.  This “solicitation” step is essential to success in major gift fundraising.

5.    Take care of your donors and their gifts – If you’ve received a gift, the work is just beginning, because now is the time you need to begin to take care of the person, corporation or foundation as a donor, and now is the time you need to begin to take care of the gift.  It is your golden opportunity to build and maintain the relationship and move it to the next level.  Taking care of donors and their gifts is generally referred to a stewardship and when done well, often results in further gifts.

1.   Getting Started (Identification).

Getting started means making a decision to have a major gifts program and taking action.  The first thing you want to do is to go to your current donor list and identify your top donors.  I like to consider the top 10% of my donors as a starting point.  But if you have a small donor base you may select 15 or 20 % of your top donors, or if you have a particular large donor base and a small staff, you may choose to select 5 to 7 % of your donors and make a decision to learn more about them. The second thing I want to do in getting started is to go back and look at Rosso’s Concentric Circles (see page 3 in Chapter of this Manual) and ask myself two fundamental questions.

• Who are those people closest to my organization and who I suspect will be most supportive? 
• Which of those people, do I suspect, based on what I know, could give our charity a major gift?

And if I only “suspect” they can give me a gift, then how might I go about finding out if they really can give us a gift?

2.   How do you “Learn More About” Major Donors (Qualification)?

Working with major donors begins with getting to know them.  Start by examining and analyzing the information you have about an individual, corporation or foundation that you’ve qualified as a potential major donor.  Gather the general information first, and then go to the more specific information about them.

Generally, what is the gender breakdown of your donors?  What is the age breakdown? Where do they live?  What is their education background and achievement level?  What is the average gift of your current lot of major donors? Why do they give?  Have you ever asked them why they give?  How long have they been donors?  To what programs / projects / initiatives do your major donors tend to give?  What portion of overall annual gifts, come from major donors?  Is there a group that stands out more than another?  If so why is this group standing out?

So you get the idea… find out what you can about your major donors based on the information you currently have. Then, qualify them based on their ties to the organization (called linkage).  Determine what ability they have to give, based on the information available to you.  We are not asking a question here about “willingness” to give.  The question is about their “ability” to give. 

Then, finally determine their interest in your organization, your charity and / or the project or initiative you are raising money for.  When you’ve done that, you should have a LAI (Linkage Ability Interest) rating for each one of your donors.  The LAI rating will allow you to order your list so that you can cultivate, get to know, and ask those with the highest LAI rating, or those most likely to give you the most amount in the least amount of time. Because the purpose of a major gift program is to raise money the individuals and organizations you want to get to know, are those most likely to give, the largest amount of money in support of the mission and vision of your charity in the shortest or least amount of time.  It only makes sense.

So how do you get to know those most likely to give?

3.   Getting to know those most likely to give (Cultivation).

Getting to know major donors is about the most fun anyone could ever have in fundraising.  The reason is it fun, is because it is all about building relationships.  As often as you hear this, it can ring hollow for those new to the enterprise of fundraising.  You may argue it is all about getting the money.  The truth is raising money and building relationships go hand in hand.  If your only interest is getting the money, I think you will fail.  If your interest is in the vision and mission of the organization, and you want to match that with the vision and mission of the donor, then you’re on to something.  Our most successful work involves discovering the specific philanthropic values, goals and objectives of the donor and matching them with the vision and mission of your charity. 

Our job is to determine where the potential donor and the charity intersect, and present the donor with the “opportunity” to give.  We are at the end of the day conduits for our organization who present “opportunities” to potential donors.  I used to think my job was to get a “yes” and would feel guilty or would feel I had failed if I did not get a positive response to my request for money from a donor. 

Then I realized it was not about me.  The ability to get a yes did not depend upon me, though my work could influence a response, nothing I did could get the response I was looking for in every solicitation. The only person with the power to give a yes is the donor.  My job is to determine what is important to the donor, link that importance to the vision, mission and priorities of my charity and present a compelling opportunity to make a difference.  

Sound nice in theory, but how do you go about doing that?

4.   Asking those most likely to give (Solicitation).

It is all about conversation; the purpose of which is to link the donor’s interests with those of your organization; and if there is no link, then I think we have a responsibility to refer the donor to where they might find fulfillment for their philanthropic goals.

The conversation might often involve discussion regarding the donor’s volunteer activities, where they may have given before, what interests them in terms of community involvement, what gifts they might have received in the past, and what goals and objectives they have in their life and perhaps what legacy they wish to leave.

Ultimately, you will want to find answers to as many of the following questions as you can before asking a potential donor for a gift. These questions are sometimes called the five “right” questions or the 5 “W”s. 

1.    Who is the “right” person who can give me a “yes”?

2.    Who is the “right” person who can ask for a gift and get a “yes”?

3.    What is the “right” project or initiative for this donor that would allow them to give a “yes”?

4.    What is the “right” amount of money to ask for, keeping in mind this donor, their ability to give, and the cost of the project / initiative?

5.    When is the “right” time to ask for the money, from this donor, for this specific project, in order to maximize my opportunity to get a “yes”?

Seems easy enough doesn’t it?  And what’s more, conversation with potential donors is often as enjoyable for them as it is for you.  Your intention in working with them will be clear.  If you want to grab the money and run, they’ll sense that.  If you want to truly find out what their interests are, and what they might be willing to invest in, they’ll sense that as well.

So let’s assume you have answers to the questions … or what is more likely, you have answers to most of the questions and you’ve made a decision that not only is this person ready to be asked, but your organization is ready to ask them.  How do we go about doing that?

1.    Set up a meeting – arrange it in a place that is comfortable for the donor.

2.    Determine who is most likely to get a “yes” from this particular donor. This is likely to be a peer, a friend, or a person who is highly regarded and respected by the donor

3.    Prepare a brief proposal on what you want to ask for, what it will do for the charity and the concrete difference it will make

4.    Practice.  It is possible to spend up to 3 or 4 hours getting ready for such a solicitation meeting.  And sometimes it can take more time.  Sit down with the influencer.  Prepare the agenda.  Determine who is going to say what and when.  Talk about the process.  Anticipate the questions and what I often do is write out the answers

5.    Prepare the agenda.

6.    Arrive early or on time

7.    Prepare how to say thank you, regardless of what happens

So it is great to have an agenda.  It is great to have the answers to the five questions.  That tells me “what” to do, but it really doesn’t tell me “how” to ask for money.  Let’s briefly walk though “how” a meeting might unfold.

The meeting has to take place in a comfortable environment and that will change depending on whether you’re dealing with an individual, corporation or foundation.  It will depend on whether the individual is a widow or widower, a local business woman, or a young entrepreneur. The point is, find a location suitable to them; a location that offers privacy and comfort and one that provides you with enough space and gives you the free uninterrupted time you need to conduct the meeting.

Arrive on time.  If the meeting is over lunch or involves tea or coffee, the mood is set by the service and generally offers a more informal environment and one that is easier for all parties involved. 

Engage is light conversation.  Enjoy the moment and connect with the potential donors by linking the conversation with where you may have finished your last conversation at early meetings.

Remind the potential donor of their interest in the organization and your under­standing of their interest in the project that you think they want to invest in.  Before the meeting you will have decided who will ask, and you will have de­cided how much to ask for.  So perhaps you’ll pose the question a bit like this. 

“Martha, you’ve told us in the past that your time at the University of Calgary was a particularly rewarding one, and that your education here has made a significant difference in your life and in fact you’ve suggested it has been the very foundation of your success as an engineer. You will know from our previous conversations that we have embarked on a major campaign for scholarships and bursaries in an effort to give others, less fortunate, and opportunity to have what you’ve been given.  Our goal is to raise $500,000 dollars for new scholarships and bursaries.  I am here today to ask you to consider giving a gift to the University of Calgary, Schulich School of Engineering, a gift of $10,000 for an endowed scholarship, a scholarship that would be held in perpetuity in your name, to support a needy and deserving student.  Will you consider giving us a gift of $10,000 for that purpose?

Once the ask is on the table, the most challenging thing to do, is to be quiet. It is critical to allow the ask to stay out there.  It is critical not to qualify or diminish what you’ve asked for.  It is critical at this point to shut up. Count to 30.  Count to 60 if you have to.  Let the potential donor respond to your question.

What if they say, “Sure let’s do it.”   Then your first thought is perhaps you didn’t ask for enough.  Your second thought is that perhaps it is the right amount.  Above all you want to take the first opportunity you can to say thank you.   

What happens if they say, “No thank you?  Your first reaction might be, my gosh, I’ve failed.  No, you haven’t failed.  It is not about “you”.   It is about Martha, the donor.  What is important is to determine what “no” means.  It may mean, “No, not right now.”  Or, it may mean “No, not for that amount.”  Or, it may mean, “No, not for that project.”

Let’s go back to the five “W”s for a moment.  Remember we wanted to find the answer to five questions before we set up a meeting to ask for a gift.  Seldom does a donor say “no” to all five questions.  Jerold Panas, a gifted and talented fundraiser, author and philanthropist in his own right, coaches fundraisers on the perfect response to a “no”.

Here is my recollection of his coaching:

1.    Ask if it is the amount that they do not like?  If it is not the amount then you’ve got the right amount.

2.    Ask if it is the project or initiative they don’t like?  If they like the project, then you’ve got the right amount and the right project.  Congratulations!

3.    Ask if it is the timing?  If the timing is wrong, then you just have to find out what the right timing is. 

4.    And if it is not the timing, then ask about the charity.  If it is the wrong charity, well then you may have the wrong match.

The question that is the most difficult to find an answer to, and one that is most problematic is the one you can’t ask.  You may in fact, have the wrong solicitor.  You may have the wrong person asking the question.  

If you’re able to find out the reason for a no, then you are in a wonderful position.  Because once you know the reason why someone has decided not to give, then you know what you have to do, to move a no, to a yes.  In many cases, it is a matter of overcoming objections.  If you simply have objections to overcome then you can take action, and the action is usually very clear and very much related to the objections made by the donor.

Let’s assume now, you’ve overcome all the objections and you’ve received a gift.  What do you do next?

5.   Taking care of donors and their gifts  (Stewardship).

Stewardship is such a great word.  When it comes down to it we use the word to refer to the activities associated with two things: taking care of a donor and taking care their gift to our charity.  The activities involved in taking care of each are interrelated.

Taking Care of Donors.  It all starts with saying thank you.  And it begins as soon as you receive the gift or the gift commitment.  Some writers suggest we should thank our donors at least 7 times for a gift.  And there is some value and wisdom in the suggestion.  But it is not only the number of times we thank a donor, but how we thank them that is important.  So how do we thank a donor?  The first rule of thumb is to thank a donor in the manner in which “they” want to be thanked.  Thank yous are only as good as the sincerity behind them, and only as effective as perceived in the eyes of the donor.  In other words, saying thank you and not being sincere, doesn’t work.  Saying thank you in a manner that might be meaningful for you as the recipient of the gift, might make you feel good, might be meaningful for you, but will not be effective unless it is meaningful in the eyes of the donor.

How do you find out what is meaningful for the donor?  We ask them.  It doesn’t always work, and sometimes we need to probe and check with friends and family, but if we really want to find out how to thank a donor in a manner that is meaningful to them, we just need to ask.

Taking Care of the Gift.  In a study done by Tony Myers and Guy Mallabone in 2000 they found that the number one reason why donor’s stop giving to a charity of nonprofit organization is because the charity does not do what it said it was going to do.  The quickest way for a charity to loose a donor is for the charity not to follow through on a gift commitment.  If a charity has agreed to use the money from a gift to feed the poor, then they are bound to feed the poor.  If they’ve agreed to use the money from a gift for scholarships for students from rural Alberta, then they need to use the money for scholarships for students from rural Alberta.  So the first rule in taking care of a gift is to do what you said you were going to do with the money. 

The second rule is to tell the donor what you’ve done, when you did it and the results you received.  This seems like such common sense.  But it is so seldom done, that anyone doing it stands out.  What could be more important to a donor, than to receive the satisfaction of knowing their gift made a difference and did so in the manner in which they intended.  This is called being accountable to the donor.

If rule number one is: “do what you said you would do”, and rule number two is “tell the donor what you’ve done and the results you got”, then rule number three is the toughest one.  Sometimes we are not successful in achieving the results we intended to achieve.  Sometimes, even with the best of intentions, things don’t go the way they should.  Rule number three, many might say, goes without saying.  Be honest.  It is easier said than done, particularly when things go wrong.  To do anything else other than to be honest means you’ll loose credibility.  You’ll loose credibility not only for your charity but for the entire sector.  To do anything less, means that you’ve failed to be accountable.  It means you’ve violated the entire premise upon which the system of gift giving is based.  It means you’ve violated the trust placed in charities and gift giving by the public.  And that does nothing less than whittle away at the very foundation of philanthropy and development.

Conclusions:  Paul Pribbenow is a leading thinker, commentator, writer, speaker and teacher of philanthropy and development.  He is the first person from whom I heard the word “abundance.”   He talks about the power of the concept of “abundance”.  If we believe that we live in a world of abundance, we will find our way to it.  If we believe we live in a world of scarcity we will find out way to it.

The attitude of abundance is at the heart of all we do in major gift fundraising.  It is the profound and certain belief that the world is filled with abundance and those who seek abundance, will find it.

Resources:

Burnett, Ken.  Relationship Fundraising a Donor-Based Approach to the Business of Raising Money, Second Edition.  San Francisco, CA; Jossey-Bass, Inc., 2002.

Dove, Ken E., Allan M Spears, Thomas W. Herbert.  Conducting a Successful Major Gifts & Planned Giving Program.  Sand Francisco, CA: Jossey-Bass, Inc., 2002.

Greenfield, James M.  Fundraising: Evaluating and Managing the Fund Development Process. New York, NY: John Wiley & Sons, Inc., 1999

Grace, Kay Sprinkel, and Alan L. Wendroff. High Impact Philanthropy: How Donors, Boards, and Nonprofit Organizations Can Transform Communities. New York, NY: John Wiley & Sons, Inc., 2001.

McKinnon, Harvey, How today’s rich Give: What You Need to Know to Raise a Lot More Money from Wealthy Donors.  San Francisco, CA:  Jossey-Bass, In., 2003

Rosso, Henry A. & Associates, Eugene R. Tempel (Ed.).  Achieving Excellence in Fundraising, 2^nd Ed.  San Francisco, CA:  Jossey-Bass Inc., 2003.

Warwick, Mal and Stephen Hitchcock.  Ten Steps to Fundraising Success: Choosing the Right Strategy for Your Organization.  San Francisco, CA: Jossey-Bass Inc., 2001