The Cycle of Giving for Major Donors

Fundraising for Major Gifts (from individuals, families, foundations) is most efficient when an ongoing relationship is developed with the prospective donor leading to their increased affinity for the organization and its leadership, and resulting in multiple gifts over many years.  This is most efficiently accomplished through a repeating cycle of research, assessment, cultivation, solicitation, stewardship.  This post reviews each step in the process with helpful hints for maximizing opportunities.

The Circular Process for Securing Major Gifts

1. Research – How do you find your Major Donors? Most organizations look regionally starting from those already affiliated with their organization who are themselves giving at a significant level and/or connected in the community to people of means. Look to your board, your leadership team, and key volunteers as the people to introduce you to new Major Donor prospects within their social or business circles. When you get new leads then…

• Go online (Google, Linked-In, Facebook, business and charitable websites) to learn more about these prospects.
  • Who within your circle knows or does business with the prospect?
  • What other organizations do they give to and at what level?
  • Are they involved in anything that suggests an interest in your mission?
  • Can you tell if their life stable and ideally successful?
  • What are they and their family members interested in?
• Find a “Natural Partner” – a person you know who also knows your prospect and can help you get background and arrange a meeting.
  • Board members and volunteers should not feel obligated to ask their friends for money. They should only be expected to speak well of your organization and help you meet and connect with Major Donor prospects. You should do the asking.
• Start building a profile on your donor prospect. The more you know the faster you can form a productive relationship that can proceed toward a gift. Write down what you know – family, job, school, kids, spouse information, as well as what other groups they donate to and how much. The donor profile is written, available to other staff, and regularly updated as new information becomes available (for a sample email your request).

2. Assessment – Evaluate the donor prospect to determine if he/she is likely to be productive for your organization. Verify your research with others, meet the prospect, and get to know them through listening. You are working to determine a possible match between their interests and goals and your organization and programs.

3. Cultivation– This is the process of creating a connection between the prospective donor and your organization (and/or project). Cultivation includes activities, education, and materials to help the donor understand and get committed to your mission.

• Control what standard communications the prospect receives from your organization (newsletter, annual report, invitations). Make sure that they complement your personalized communications and contacts and don’t overwhelm them.
• Remove your Major Donor prospect from the general appeal mailing list so they don’t inadvertently send you $50 when you are working to ask for $5000.
• Start sending your Major Donor prospect individualized materials (reports, personalized communications, invitations).
• At least monthly, make contact by phone conversation, email (with response), letter, meeting (event, tour, meal or coffee).

4. Solicitation– After cultivating (educating; inspiring; gaining interest and affinity) the next step is asking for a gift. Consider these dynamics:

• Most Major Donors want to support a part of your work, not your organization in general.
  • Offer them a chance to fund something specific and interesting from your approved annual budget.
• Consider your perspective Major Donors as investors and be able to answer their questions about the project and program you are presenting.
• Major Donors should be considered as people seeking to accomplish their own mission objectives through your organization. They respond most enthusiastically if they feel ownership and are most likely to respond positively as investors. They expect to hear about a well thought through project, to know the objectives as well as the challenges, to receive regular progress reports, to be invited to inspect the project, and to be briefed on the finances.
• Two good solicitation tactics–
  • Ask them to fund a portion of a project where other donors will share in the investment and risk (10-25% of total suggested).
  • Ask for a specific amount. Major Donors have probably been approached before and are familiar with the process. They value honesty and hate games. Tell them what you need from them. Even if it is more than they feel they can give (at this time) it typically will not anger or push them away.

• Pledges are good– If your cash flow permits it, seek and accept a pledge where the donor can pay over time, rather than a donation immediately. You will generally get a larger gift commitment.
  • Most Major Donors honor their pledges
  • Pledges typically are NOT formal legal documents but promises made in good faith.

5.  Stewardship– This is the follow up — reporting and recognition phase — following the gift commitment. When done well, it is the first step to the next gift.  Your connection with the donor here is focused on making them feel pleased with participating in a particular project or effort, as well as proving your competence and professionalism.  Beware, too many organizations get the gift and forget about their implied responsibility to the donor.

• Once you get a verbal agreement for a gift (or pledge) follow immediately with a letter thanking and confirming the gift commitment. You want the amount and the payment schedule on record.
• Donors want to be recognized!
  • Have a board member who knows the donor or the CEO write an additional letter of appreciation that also reinforces how important the gift is to the mission.
  • Provide all promised recognition in a timely manner.
  • Depending on the size of the gift, consider a small luncheon to recognize the donor among his/her peers and launch the project (include all the major donors to that project).
  • Invite the donor for a “behind the scenes” look at the organization of the project.
  • Include the donor in project planning sessions
  • Recognize the donor when he/she visits or attends an event.
• Timely Reports – Whether written or verbal make sure the donor stays in touch with the project during the time that their gift is being used.

It is easier to keep a Major Donor than find a new one.  And yet, great donors are often alienated from organizations with missions they love.  Why?  They don’t feel heard, appreciated, or dealt with honestly.  We often secure their gift by telling them how important they are, and then we ignore or patronize them.  The chief development officer must monitor Major Donor satisfaction and take responsibility for the follow-through on promises made when the gift was secured.  Negative feelings can grow through chance encounters with staff or volunteers working in any aspect of the organization.  It cannot all be controlled but by maintaining close contact with your very best donors you can fix most problems before they escalate.