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The Architecture of Major Donor Cultivation, Part I
October 16, 2013
1. Why major gifts?
2. How to develop your case
3. Finding, rating and prioritizing prospects
4. The culture of giving and asking
Objectives for This Morning’s Training• Provide understanding of what a major gifts structure
looks like• NOT an exhaustive review• Focus on practical things that a very small team or
individual can achieve• You should leave this morning with several concrete
ideas that can be implemented quickly to start achieving results
1. How to identify and prioritize a prospect2. How to cultivate3. How to solicit4. How to steward
Introductions• Your name and your organization• What big idea or belief inspires your organization?
• Limit to one sentence
The Benefit of Individual Major Gifts• Defining major gifts• Highest ROI• Fastest and most reliable path to increased fundraising• Changing funding priorities from a few foundation donors
can be hard to weather without diversified sources• Helps cultivate and recruit potential leadership and
influencers• Complementary to other forms of fundraising
• Foundations like to see robust individual giving• Direct face to face feedback can improve your case for
giving
Real world example 1Annual Fund for ORGANIZATION X
Total giving CumulativeFY ‘11-12 # $ # $ %
Major Gifts$50k - $99k 1 $50,000 1 $50,000 9%
$25k - $49k 3 $93,400 4 $143,400 26%
$10k - $24k 14 $152,570 18 $295,970 55%
$5k - $9k 23 $132,766 41 $428,736 79%
Community Giving$2.5k - $4.9k 24 $73,113 65 $501,849 93%
$1k - $2.4k 25 $34,463 90 $536,312 99%
$1 to $999 21 $6,203 111 $542,515 100%
TOTAL 111 $542,515
Real world example 25-Year Annual Giving to ORGANIZATION
Total giving Cumulative1E+12 # $ # $ %$2M + 1 $2,500,000 1 $2,500,000 6%
$1M - $1.9M 3 $4,276,696 4 $6,776,696 17%
$500k - $999k 4 $2,504,371 8 $9,281,067 24%
$250k - $499k 10 $3,458,744 18 $12,739,810 33%
$100k - $249k 31 $5,036,014 49 $17,775,824 46%
$50k - $99k 47 $3,190,236 96 $20,966,060 54%
$25k - $49k 71 $2,326,005 167 $23,292,064 60%
$10k - $24k 209 $2,963,555 376 $26,255,619 67%
$5k - $9k 385 $2,518,684 761 $28,774,304 74%
$2.5k - $4.9k 627 $2,070,990 1,388 $30,845,293 79%
$1k - $2.4k 2,021 $2,881,612 3,409 $33,726,905 87%
$1 to $999 36,649 $5,250,907 40,058 $38,977,813 100%
TOTAL 40,058 $38,977,813
Nonprofit Funding Sources
Source: GivingUSA 2013 report
Case
for G
ivin
g
Major Gift Fundraising Success
Individual Major Gift Program
• Commitment to creating relationships between prospective donors and the organization
• Staff and/or volunteers willing and able to cultivate and solicit
• People who are willing to leverage their own generous giving
• Qualified prospects
Upside•High ROI
•Fastest and most reliable
•Protects against foundation funding
changes
•Helps cultivate leaders
•Complementary to other fundraising
•Get new ideas and feedback
• Cultivation and engagement plans• Well-articulated, compelling case• System to track progress and manage
solicitors• Follow-up for acknowledgment,
billing
What you need to have in place or develop:
Downside• Many people don’t like to solicit• People are reticent to ask friends,
family and colleagues • Smaller number of asks compared to
other methods• Smaller reach and therefore less
community building
10
Case
for G
ivin
g
Major Gift Fundraising Success
Components of the Case for Giving
12
What is our core belief?
Why do we exist?
What do we hold dear?
What’s our history & what makes us special?
What are the most pressing problems we are trying to address?
What does future success look like?
What is the plan to get there?
Why is the plan likely to work?
How do we measure success?
How much will it cost?
How will we raise the $?
ACTION:$ or Time
If you answer nothing else…• What is your core belief?• What problems/opportunities are you going to
address?• What is your solution/plan?• What is the cost to execute your plan?• What does success look like?
Case Study
The most important job in the world is taking care of a child. And when a child is very sick, families need to be together.
Belief
Problem/ Opportunity
Thousands of families a year come to UCSF from around the country for care of their critically ill children.
Without support, many would have to sleep in their cars, or in hospital corridors.
And when the UCSF BenioffChildren’s Hospital opens at Mission Bay, the need will double.
Solution/Plan
Family House is the home away from home for families of children with cancer and other life-threatening illnesses. It is a place to stay and a community to rely on, right next door to the hospital.
We will double our capacity by building a new Family House in Mission Bay.
Cost3-YR. INITIATIVE EXPENSE DETAIL 3-YR COST
Ongoing Operations $3,0000,000
Build a New Family House
Construction Item A $23,800,000
Item B $5,000,000
Item C $6,200,000
Endowment $5,000,000
Total $43,000,000
Vision
No family being treated at the hospital will be turned away from Family House if they are in need
of our help.
Discussion/WorkshopDISCUSSION• What worked or didn’t work about Family House’s introduction?
WORKSHOP• You all developed your organizations’ value propositions yesterday.
What is the central problem/opportunity in the world you are trying to address?
• Do you have a bullet point version of your plan?
• How well does your budget map to the plan?
• What is your ramp-up period? How many years are you putting together in your budget?
Exercise• Pair up with someone next to you from another
organization.• Tell each other the brief introduction we just
worked on
Case
for G
ivin
g
Major Gift Fundraising Success
Probable Donors• Where to find• How to prioritize
• DISCUSSION: Where would you look?
Where to Find Probable Major Donors• Existing donors, big and small• Existing board, volunteer leadership and their
networks• Friends, family, professional, and nonprofit colleagues
• Publicly published donor lists from organizations with related missions
• Ask existing leadership and supporters for information about and entrée to those people
• Program participants• Your personal network
How to Prioritize Prospects• 6 key indicators:
1. Have they given to you before?2. Can they afford a “major gift?”3. Do they make gifts this large to other organizations?4. Are they likely to care about the problems you are
addressing?5. Do you have access to them?6. Have they volunteered or participated in your
programming?• Establish a likely ask amount
Discussion & ExerciseDISCUSSION• Imagine your ideal donor. What qualities do they
have?• If you gathered together the 50 best donors for your
organization, what do they have in common?
EXERCISE• Write down the names of at least 5 potential major
donors• Rate them 1-5 in each of the areas
Other Sources of Information to Prioritize Probable Donors• “Key informants” currently active in your
organization• Online research
• Free: Google, Blockshopper, public business filings, etc. • Subscription: NOZA, WealthEngine, ResearchPoint
• Face to face conversation
How many prospects do you need?• Depends how much money you are trying to raise• As a rule of thumb, you will need to have 3-4
prospects identified for every major gift you are trying to secure
• If you hope to get 3 gifts at $10,000, you should have 9-12 qualified prospects at that level, etc.
Gifts Needed for Sample Fundraising Effort
Gift payable over x years
Projected Gifts Needed
# $$50,000 1 $50,000
$25,000 2 $50,000
$10,000 3 $30,000
$5,000 6 $30,000
$2,500 8 $20,000
Major Gifts Subtotal 20 $180,000
$1 - $2.4k Many $25,000
TOTAL many $205,000
Prospects Needed
Gift payable over x years
# of Identified Prospects Needed
Projected Gifts Needed
# $ 3 to 1 4 to 1 Identified$50,000 1 $50,000 3 4 3$25,000 2 $50,000 6 8 3$10,000 3 $30,000 9 12 14
$5,000 6 $30,000 18 24 16$2,500 8 $20,000 24 32 40
Major Gifts Subtotal 20 $180,000 60 80 82
$1 - $2.4k Many $25,000
TOTAL many $205,000
Case
for G
ivin
g
Major Gift Fundraising Success
Major Gifts Cultivation• Face time• Small cultivation events• Site visits• Participating in programs• Volunteering in programs• Written communications
• Highly personalized (email or letters/updates)• General (online, social media, email newsletter, annual
reports, etc.)
Face Time: Activity Needed• We are seeking 20 gifts, and we determined we need
between 60 and 80 prospects• Assume on average it will take 2 or 3 visits to cultivate
and close.• 150 to 200 prospect visits
• Assume you have 1 ambassador for half of the visits, and 2 ambassadors for the other half
• 225 to 300 ambassador visits
• May seem daunting, but if E.D. does 3 visits a week, that’s 150 in a year.
When and How to Solicit a Major Gift• Major gift fundraising is the art of asking for the
right amount for the right purpose at the right time by the right person
• You are ready to solicit a major gift when:1. You have confirmed that a donor supports the
mission of the organization2. You understand the interests, needs and concerns of
the donor3. You are sure they understand your plan, what it costs
and the type of gifts that you need
Gift ChartGift payable over x
years Projected Gifts Needed Cumulative
# $ # $ %$50,000 1 $50,000 1 $50,000 24%
$25,000 2 $50,000 3 $100,000 49%
$10,000 3 $30,000 6 $130,000 63%
$5,000 6 $30,000 12 $160,000 78%
$2,500 8 $20,000 20 $180,000 88%
Major Gifts Subtotal 20 $180,000 20 $180,000 88%$1 - $2.4k many $25,000 many $205,000 100%
TOTAL many $205,000
Giving Circles• Good for public recognition and stewardship• Role models generosity• Demonstrates you have secured support from
other thoughtful people• Raises sights of giving• Example:
• “Angels” at $25k and up• “Benefactors” at $10k and up• “Pioneers” at $5k and up• “Friends” at $1k and up
UNDERDEVELOPED
National Study of Challenges Facing
Nonprofit FundraisingA joint project of
CompassPoint and the Evelyn and Walter Haas, Jr. Fund
• Culture of Philanthropy• A set of values and practices that support development
• Most people act as ambassadors and engage in relationship building
• Everyone promotes philanthropy and can articulate the case for giving
• Fund development is valued as a mission-aligned program of organization
• Organizational systems are established to support donors
• The ED is committed and personally involved in fundraising
• ~ 50% of Development Directors expect to leave within 2 years
• ~ 33% of ED’s are very satisfied with their Development Directors
UNDERDEVELOPED
• Smaller nonprofits struggle to compete with larger organizations with experienced Dev. Dir.
• It’s about more than one person
• Many nonprofits lack basic fundraising systems and plans
• Executives say Board engagement in fundraising is lacking
• One in four executives report they lack the skills and knowledge to secure gifts and one in five don’t particularly like doing it
• Many nonprofits do not have an organizational culture that supports fundraising success
UNDERDEVELOPED
Creating a Culture of Giving and Asking• Board
• Role model audaciously generous giving• Help introduce, cultivate, and solicit• Fellow board or staff to meet annually in person with each board
member to solicit and create a development activity plan• Show how a discussion about giving can be celebratory, meaningful, and
enjoyable• Staff
• Role model how to deliver the case for giving• Be the Ambassador-In-Chief
• Inspire and support others• Track and celebrate board and staff activities
• # of visits• Hosting events• Making thank you calls, etc.
Stewardship• Most donors stop giving because they feel
underappreciated and they don’t feel their gift has had an impact
• Best way to build a major gift program is to retain and upgrade existing donors
• Stewardship should be specific, tiered (donor circles) and do-able
Sincere Stewardship*• Stewardship begins with delivering the promised benefits and
reporting on them. • Stewardship is designed to confirm the donor's wisdom in making the
original gift and to draw him or her closer to the organization.• Should not be left to chance, but should be part of a structured plan. • What differentiates true stewardship from mechanical gift
acknowledgement, however, lies in doing the unexpected — in communicating with donors not because it is part of a plan, but because donors are your organization's best friends.
• An attitude that should permeate your entire program.
* Definitions taken from Corporation for Public Broadcasting, Major Gift Initiative
42
Sample Excerpt from a Stewardship Plan
• Donors $2,500+• Receive thank you call from ED or President within 24 hour of
making pledge/gift• Personal thank you note sent within 48 hours of receipt of gift• Invitation for in-person update with President and ED at least
one time• Two written “behind-the-scenes” updates (mid-year and end of
fiscal year)• Personal note from a client in the summer• Holiday card has personal note from a staff or board member
connected to the donor• All other communications sent to rest of donor base (annual
report, newsletter, etc…)﴿
43
Recap• Develop clear, compelling answers to the basic case
for giving questions• Identify and prioritize major gift prospects, and
establish a likely ask amount• Engage board/volunteers in fundraising and start by
soliciting them the right way• Get comfortable being Ambassador-In-Chief by
getting out and building personal relationships with potential major donors
• Develop a stewardship plan to retain and upgrade existing donors